Beijing’s top economic planner has sent out an upbeat message about China’s growth prospects in an assessment of a key economic plan amid growing calls to lift expectations for expansion.
The world’s second-largest economy has advanced as expected in most aspects outlined in its 14th five-year plan covering economic and social development for 2021-25, according to a midterm assessment from the National Development and Reform Commission (NDRC).
Despite several challenges, including technological chokepoints, 16 of the 20 major goals included in the plan are within expectation or better than anticipated, NDRC head Zheng Shanjie said in his report to the country’s top legislature on Tuesday.
What to expect from China’s economy in 2024
What to expect from China’s economy in 2024
Calling the past couple of years “extremely unusual”, Zheng said China has “basically met expectations” in terms of gross domestic product (GDP) growth and residents’ income despite Western-led containment efforts and shocks from the coronavirus pandemic.
Investor and consumer confidence has remained low amid a bumpy economic recovery after reopening, mainly due to an ailing property sector and subdued external demand.
The NDRC’s assessment pointed out that “significant and deep changes” at home and abroad are hindering China’s efforts to completely meet its 14th five-year plan goals.
China is, the NDRC said, still being “choked” by Western countries on key technologies, lacking a long-term mechanism to spur consumer spending and facing rising risks in key areas, including food, energy and finance.
In many cases, it’s the narrative that’s exerting an influence
Weak confidence also occurs as Western media plays up China’s national security law and plays down China’s dedication to economic growth, said Zheng Yongnian, a prominent political scientist at the Chinese University of Hong Kong, Shenzhen.
“In many cases, it’s the narrative that’s exerting an influence,” he said.
While Western media doubts whether China is still investible, and “demonises” its national security law, China has greater potential for growth compared to Western countries in terms of GDP per capita, he added.
“Beijing should respond with emphasis on three most important things – reform, opening-up and innovation,” he said.
“Don’t interpret the coming and going of foreign firms into whether they have confidence in China,” she said at the China Wealth Management 50 Forum, noting a combination of reasons, including increased competition from domestic companies and higher labour costs.
“It’s an adjustment to adapt to a new development phase – let’s bear this in mind first.”
