China's Economic Growth Target Around 5% This Year... Concerns Over Economic Recovery Persist

China set its economic growth target lower than market expectations this year, signaling that the top leadership remains concerned about the economic recovery, analysts say.

Tiananmen Square.
[Photo by Yonhap News]

On the 5th, Li Keqiang, Premier of the State Council of China, presented the economic growth target for this year as "around 5%" at the opening ceremony of the 14th National People's Congress (NPC) first session held at the Great Hall of the People in Beijing. This is the lowest target since the Chinese government began announcing annual growth targets in 1994, except for 2020 when the announcement was skipped due to the COVID-19 pandemic.

Bloomberg News analyzed that "considering weak consumer confidence, slowing exports, and a still pressured housing market, this shows that China's top leadership remains concerned about the economic recovery." Previously, Bloomberg's survey showed the median market forecast for China's economic growth this year was 5.3%.

Zhang Ziwei, an economist at Pinpoint Asset, told Bloomberg, "This economic growth target is on the conservative side," adding, "Since COVID-19 policies have been adjusted, there is no urgency for the Chinese leadership to launch another large-scale economic stimulus."

Reuters reported that "around 5%" is the lowest among China's economic growth forecasts for this year, noting that recent surveys expected the market to set a target as high as 6%.

Zhou Hao, an economist at Guotai Junan International, told Reuters, "China has lowered its growth target for the second consecutive year, which may disappoint the market, but we believe investors will pay attention to the fundamental growth drivers to gauge the pace of recovery."