For yet another year, China has issued what amounts to a wish list of economic targets for the economy in 2024.
The most laughable of these targets is a 3% goal for Consumer Price Inflation (CPI) for the year. In January, China saw consumer prices fall by an annual 0.8%, the most significant decline in over 14 years, indicating a stark contrast to the inflation target.
China’s reality reveals a persistent CPI deflation for four months and more than a year of price disinflation, while producer prices across manufacturing have been negative for over a year.
Instead of focusing solely on inflation targets, the Chinese Communist Party-run government should address the property crisis and boost consumer confidence to spur sustainable economic growth.
Another target, GDP growth of “about 5%,” follows a suspiciously calculated 5.2% figure reported for 2023, which did not reflect the economic reality, particularly in the final quarter when demand slowed and prices dropped.
China’s hopes for ending deflation lie in the potential rise in port prices, rather than the projected policies or economic security measures.
These targets were released in the government work report presented to the first session of the National People’s Congress, China’s rubber-stamp parliament.
China has already announced plans to increase the government deficit this year, acknowledging the need for more spending to stimulate the economy. Additionally, a forecasted 5.5% unemployment rate for 2024 implies a slight rise in unemployment, indicating ongoing economic challenges.
However, reporting on certain economic indicators, such as the youth unemployment rate, could result in severe punishment due to strict espionage laws.
The People’s Congress is expected to approve President Xi Jinping’s move to extend these hardline laws to cover ‘work secrets,’ which could have significant implications for foreign businesses operating in China.
The government’s work report emphasizes the importance of high-quality development, risk prevention, and maintaining social stability.
While Beijing has downplayed numerical targets in recent years, focusing instead on “high-quality” growth, it acknowledges the need to be prepared for all risks and challenges.