China aims for 5pc GDP growth amid scepticism - promises vigorous effort to achieve target

China is standing firm on its ambitious plan to achieve a 5 per cent GDP growth this year, with officials expressing confidence in attaining the target through determined efforts.

Despite scepticism from some economists, top Chinese officials, including Zheng Shanjie of the National Development and Reform Commission, emphasised the feasibility of this goal during a press briefing at the National People's Congress.

The leadership's commitment comes while challenges and uncertainties threaten China's economic recovery.

Defending the 5 per cent target

According to the South China Morning Post, Zheng Shanjie, Chairman of the National Development and Reform Commission, defended China's 5 per cent GDP growth target, asserting it as a "positive goal reachable with a jump."

The announcement was made during the National People's Congress, where leaders addressed concerns and outlined plans to navigate economic headwinds.

The target aligns with China's growth potential and is deemed achievable through a concerted effort.

Economic landscape and challenges

Despite a strong start in the first quarter, authorities acknowledge that achieving 5 per cent economic growth won't be without challenges.

Zheng Shanjie pointed out hurdles such as deflationary risks, a property market downturn, and external pressures.

While the goal is set at 5 per cent, many economists, including the International Monetary Fund, predict a slightly lower GDP growth, citing uncertainties in China's economic outlook.

Monetary policy and financial tools

The South China Morning Post report cited Central Bank governor Pan Gongsheng who noted that Beijing has a deep monetary policy toolkit and assured that further measures are in progress to address deflationary risks.

The focus is on stabilising price levels, promoting a mild rebound in prices, and ensuring the health of the banking sector's balance sheet.

While market concerns persist, the central bank is optimistic about supporting the ambitious GDP growth target through strategic monetary policies.

Diversification and economic drivers

China is banking on various strategies to achieve its growth target.

Officials highlight the importance of a large-scale trade-in program for home appliances, replacement programs for used cars and outdated equipment, and the issuance of ultra-long-term special treasury bonds.

The emphasis is also on boosting the "new three" exports—electric vehicles, lithium-ion batteries, and solar panels—to become the main economic drivers.

Long-term strategy and global market presence

Minister of Commerce Wang Wentao said that promoting the replacement of old consumer goods with new ones is a powerful measure for economic growth and a long-term strategy for high-quality development.

China's policy tools, including interest rate cuts, reserve requirement ratio cuts, and tax reductions, are expected to continue to support economic growth.

(With inputs from Bloomberg)