GDP growth target of 'around 5%' reflects pragmatism

Editor's note: Bruce Pang is the chief economist and head of research at JLL Greater China. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

The 2024 Government Work Report unveiled the main targets for economic and social development in 2024, including a gross domestic product (GDP) growth of "around 5 percent".

As the world's second-largest economy and the largest developing country, China must steadfastly uphold the principle that "development is the top priority" over the long term. While setting the growth target for 2024, it is essential to prevent the risks of "overspeeding" and "overheating" hidden behind overly-ambitious goals. More importantly, we must steer clear of the crisis of a "stalling" economy associated with excessively low targets.

The rapid economic growth in 2023 was attributed to the lower base in 2022 and the robust rebound in consumption after the pandemic. However, these factors are expected to normalize in 2024. Therefore, when establishing the growth target for 2024, it is imperative to align with and adhere to the laws of economic development.

To achieve the objectives of the "14th Five-Year Plan" and to double the GDP by 2035 compared to 2020, the compound annual growth rate must be at least 4.7 percent over the next 15 years. Setting a GDP growth target of "around 5 percent" allows for reasonable and moderate progress, sustained momentum, emphasis on quality, stabilization of expectations, and fortification of confidence.

Considering that every 1 percent increase in China's GDP growth has created 2 to 2.5 million new jobs in recent years, the target of over 12 million new urban jobs and an urban surveyed unemployment rate of around 5.5% this year would also require a GDP growth rate of "around 5 percent".

In my opinion, a target of "around 5 percent" reflects a pragmatic attitude, which can bolster the sustainability of macroeconomic policies. It provides a reference and anchor for expected targets while also leaving sufficient space to address potential risks and uncertainties.

Against the high probability of a global economic slowdown, China's economic development continues to exhibit resilience and a sustained positive trend, with ample potential for the comprehensive deepening of reform and opening up, as well as sufficient room for macroeconomic policy to take effect. 

Considering the consolidation of economic recovery momentum and increasing policy effectiveness, China's recovery is anticipated to further expedite, culminating in swifter and better economic performance. It is highly possible that the economic growth target of around 5 percent will be attained.