China has set its 2023 economic expansion target at about five percent, a more modest target than some expected in the past, as the country’s leaders take into account a wide range of difficulties plaguing the world’s second-largest economy.
The figure was released in Premier Li Keqiang’s latest activity report, released Sunday morning, according to the official Xinhua news agency. The announcement comes at the start of China’s National People’s Congress, the country’s annual parliamentary rally, which will last more than a week.
The GDP target is based on a weak base effect in 2022, when the economy, which had been hit by repeated Covid restrictions, grew by 3%, falling short of its previous expansion target of around 5. 5%.
Before the NPC opening consultation, economists basically expected an acceleration in expansion to more than 5% due in large part to the faster-than-expected exit from “zero Covid” and a rebound in domestic consumption. A Reuters report on Thursday said the government even contemplated raising its 2023 GDP target to 6 percent as officials sought to boost market and customer confidence.
“The target of around five is more reasonable,” says Shen Meng, managing director of Beijing-based boutique investment bank Chanson.
Shen says the government is unlikely, in part because of inflation considerations, to take advantage of large-scale stimulus. China’s economy already showed signs of recovery in March, when the National Bureau of Statistics reported that the production purchasing managers’ index (PMI) rose to 52. 6 in February, its point since April 2021. The higher-than-expected figure triggered a rally in Hong Kong stocks.
To increase market expansion and confidence, Mr. Li said China will help the progress of platform enterprises, deepen the reform of state-owned enterprises, and inspire the personal sector to become bigger and stronger.
His comments echo the return to pragmatism that emerged after President Xi Jinping won an unprecedented third term at the party’s 20th congress last October. Meanwhile, Li is expected to be replaced by Xi loyalist Li Qiang, who was once Party Secretary in Shanghai. and oversaw the fatal month-long blockade of the monetary center in 2022. However, the new Li has also been praised for his pro-business technique in the past, and he has Xi’s confidence that he can give him greater autonomy in managing the economy.
The parliamentary assembly is also expected to see key officials retired, adding reformist central bank governor Yi Gang and Vice Premier Liu He, a Harvard University graduate who in 2013 called on the market to play a “decisive” role in the economy. .
They are expected to be replaced by Xi’s close allies, Zhu Hexin, chairman of state-owned monetary conglomerate Citic Group, and He Lifeng, head of the National Development and Reform Commission, respectively.
Despite promises to boost expansion and boost market confidence, there seems to be a persistent distrust of personal sellers within the Communist Party. Several tech billionaires, such as Tencent’s co-founder and the country’s third-richest person, Pony Ma, are not on the list of delegates attending parliamentary sessions.
Absentee tycoons have held key positions in government advisory bodies in the afterlife and have used parliamentary meetings to advocate for policies such as deeper integration of virtual technologies into the genuine economy and accelerating the progression of synthetic intelligence and autonomous driving.
But last year, Tencent went through China’s sweeping crackdown on the tech sector, suffering from a lack of new gambling licenses as the government focused on solving social problems such as gambling addiction among the country’s youth. The former attendees were replaced by Zhang Suxin, president of Hong Kong. Hua Hong, a semiconductor manufacturer listed on Kong’s list, and Li Shushen, a chip expert and president of the University of the Chinese Academy of Sciences. The lists of delegates are reviewed every five years.