China has solid foundation for stable, improving economy in 2024

BEIJING -- There is a solid foundation for a stable and improving Chinese economy throughout the year of 2024, an official with the country's top economic planner said.

"With the further implementation of a series of major reform policies and initiatives, we will continue to strengthen the real economy, promote consumption, expand investment and stabilize foreign trade," said Li Hui, an official with the National Development and Reform Commission (NDRC).

During a roundtable on China's economic performance in the first quarter (Q1), Li cited favorable conditions over the next three quarters, including opportunities for industrial upgrading brought about by the development of new quality productive forces and further deepening of reform and opening up.

Li also said policies and preparations would be put in place to deal with domestic and international risks and challenges.

In Q1, from a macro perspective, the overall economic operation has continued to show a trend of recovery and improvement, Li said, noting that in Q1 economic and social development achieved a stable start.

China's gross domestic product (GDP) grew 5.3 percent year-on-year to 29.63 trillion yuan ($4.17 trillion) in the first three months of 2024, data from the National Bureau of Statistics showed.

The pace accelerated from the 5.2-percent overall GDP growth for 2023 and the 5.2-percent GDP growth recorded in the fourth quarter of last year.

Take on challenges

China has targeted its economic growth at around 5 percent for 2024, a goal that officials and experts believe is well within reach considering the country's sound economic fundamentals and supportive macroeconomic policy mix.

Challenges remain for the world's second-largest economy. Liu Sushe, deputy head of the NDRC, expressed optimism regarding the increasing positive factors within the Chinese economy's current operations. However, Liu also acknowledged the significant challenges posed by the complex, severe and uncertain external environment.

"Although there is a continuous increase in positive factors, the domestic effective demand is insufficient, and social expectations are weak," said Liu, adding that the economy still faces risks and challenges.

In response to the challenges, the NDRC has a clear plan. Yuan Da, deputy secretary-general of the commission, stated that for the second quarter, focus will be on three critical areas, including actions to more effectively attract and utilize foreign investment.

The implementation of equipment updates and trade-in of consumer goods will be accelerated, while self-reliance in high-level technology will be enhanced, Yuan said.

Goldman Sachs and Citigroup both recently released reports indicating that China's economy started the year 2024 on a positive note. They predict that the Chinese government's GDP growth target of around 5 percent can be achieved and have raised their forecasts for China's GDP growth for the entire year of 2024.

Yu Xiangrong, Citigroup China chief economist, analyzed in the research report that a new round of policies aimed at stabilizing growth is being accelerated. In terms of supporting policies, the Chinese government is promoting a large-scale update of equipment and a trade-in program for consumer goods.

Yu stated that in addition to this, the Chinese government has sent a stronger signal of optimizing the business environment and advancing opening-up.

Goldman Sachs revised its forecast for China's GDP growth rate for the year 2024 from 4.8 percent to 5.0 percent, while Citigroup has made a similar upward adjustment from 4.6 percent to 5.0 percent.