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E-mail China.org.cn, March 10, 2024
Market News International:
According to the government work report, China has set a GDP growth target of around 5%. Why has the GDP target been set at this level? And what measures will authorities implement to ensure this target can be met?
Huang Shouhong:
In setting the growth rate for this year at around 5%, we considered evolving dynamics at home and abroad, along with other relevant factors, as well as what is needed and what is possible. It can be said that we have set this target based on current needs and with a long-term view. To be specific, from the perspective of current needs, we require a certain rate of economic growth to expand employment, increase people's incomes, and prevent and defuse risks. There is relatively high employment pressure this year, with more than 12 million new urban jobs to be created. If we do a rough calculation based on the relationship between employment and economic growth, or how economic growth will stimulate employment, the economy needs to maintain a growth rate of around 5% to meet the employment target. Certainly, other needs should also be taken into account.
In the long term, or in the medium to long term, we will basically realize socialist modernization by 2035, which entails reaching a per capita GDP level comparable to moderately developed countries. While no specific quantitative requirement is stated, there is an implicit requirement for the economic growth rate. According to comprehensive estimates, to basically realize socialist modernization by 2035, we will need to maintain an economic growth rate of around 5%. This target is set based on a comprehensive analysis of the supporting conditions and favorable factors for China's economic growth.
Actually, this has been the way that the Party and the government have set development goals over the years, considering both what is needed and what is possible. While higher targets may be desirable in terms of what is needed, setting targets unattainable due to lack of support would not work. As for whether we can achieve the growth target we have set, I believe there are conditions and support to achieve a growth rate of 5% this year.
Recently, there have been forecasts for China's economic growth rate this year. Some major international organizations, including the International Monetary Fund, along with some economists, have made their forecasts and shared their views. As for why we have expressed confidence in our ability to achieve this target, I will elaborate on it here not from an academic or theoretical perspective, but based on a basic logic and common sense.
First, the fundamental driving factors for China's economic growth, including the 5.2% growth achieved last year, have remained unchanged, with some even growing significantly stronger. According to the report, China possesses several advantages for developing its economy, including vast market demand, a complete industrial system to ensure supply, and a huge and highly skilled workforce. For example, in recent years, new driving forces have been rapidly developing and growing stronger year by year. The new energy vehicle sector, for example, has expanded from scratch to what it is now in just over a decade. Last year alone, the production and sales volume exceeded 9 million, accounting for more than 60% of the global share.
Second, positive factors for economic development have been on the rise since the beginning of this year, while some of the unfavorable factors hindering economic development last year are weakening. In January and February of last year, we were still working hard for a smooth transition in epidemic response following a major, decisive victory in the fight against COVID-19. This year, the lingering effects of the epidemic are waning. For example, progress was made last year in preventing and defusing risks in real estate, local government debt, and small and medium financial institutions, thanks to the concerted efforts of all stakeholders. Real estate investment and sales improved overall. Certainly, some conditions are still changing. Local debt risks have been alleviated on the whole, and the reform of small and medium financial institutions to defuse risks is accelerating. In terms of preventing these major risks and potential dangers, we still face challenging tasks, as well as new situations and problems. But in any case, we are in a better situation this year than last year, not worse. The same applies to some other factors as well. By no means am I ignoring the difficulties and challenges in saying so. In fact, China still faces challenging and complex evolving dynamics at home and abroad in its economic development, and the report describes at length the difficulties and challenges we face. However, despite difficulties every year, we have consistently improved our quality of life. Zooming out, we can see that in recent years, China has been developing, progressing, and growing stronger in addressing difficulties and challenges.
Third, some major policy measures taken since last year gradually started to take effect this year. It takes some time for policies to take effect after they are implemented, so the effects of policies adopted in the second half of last year are expected to be revealed this year.
Moreover, we have gathered extensive experience while dealing with the difficulties over the past couple of years, especially those problems last year that have not been seen for several years. Fiscally and financially speaking, China's government debt ratio is below 60%, and its financial systems operated in a robust and stable manner. The country has ample space in macroeconomic policies. The government work report pointed out a lot of major policies to achieve this goal. There are also various tools in reserve that will enable us to deal with any unexpected shocks to the Chinese economy, or unexpected changes in the international environment.
According to the report, generally speaking, there will be both strategic opportunities and challenges, with favorable conditions outweighing unfavorable ones. China's economy expanded by 5.2% last year, so it is entirely possible that the economy will achieve the growth target of around 5% this year. Of course, hard work is necessary to make things happen. In order to achieve this year's target of 5% growth, we must meet challenges head-on and overcome difficulties, and all sides need to make continued efforts. In this regard, the report pointed out that as long as we fully implement the decisions and plans of the Party Central Committee, make good use of all favorable opportunities and conditions, and fully leverage the motivation, dedication and creativity of everyone , we will undoubtedly overcome any difficulties and challenges, promote sound and steady economic growth, and achieve this year's projected growth target.
Thank you.
