Based on provincial governments' objectives, China's GDP growth target for 2024 is expected to be around 5%, slightly higher than the 4-4.8% forecasts by international market agencies.
In 2024, consumption will continue to be the primary contributor for economic growth, and the pace of investment growth is projected to accelerate. However, challenges such as a sluggish real estate sector, financial pressure faced by local governments, and a downturn in the global economy still persist.
In 2023, China's GDP growth reached 5.2% amid bolstered consumption, weakened investment and depressed exports.
A total of 19 Chinese provinces had set their GDP growth targets at 5% or above for 2024, reflecting their ambition to boost economic growth. This also suggests that the national GDP growth target for 2024 is likely to be around 5%. International market agencies generally hold an optimistic outlook for China's economy in 2024, especially following the issuance of a trillion yuan in government bonds in October 2023 and the Central Economic Work Conference in December 2023, although their expectations are below 5%.
According to China's Central Economic Work Conference held in December 2023, more policies aimed at stabilizing expectations, growth and employment will be introduced in 2024. As these policy measures take effect, the economic growth rate is expected to show an upward trend, initially at a slow pace then picking up.
Source: China NBS, Charted by GL Consulting
Source: data published by agencies
The growing engine of GDP contributors diverged. In 2023, China achieved its GDP target set at the beginning of the year, with an annual GDP growth rate of 5.2%. Consumption, investment and exports contributed 82.5%, 28.9% and -11.4%, respectively, to China's economic growth in 2023. Particularly in the fourth quarter, consumption pushed up the GDP growth by 4.2 percentage points (contribution rate of 80%), whereas exports pulled it down by 0.2 percentage points (contribution rate of -3.1%).
Investment weakened in 2023. Fixed-asset investment increased by 3% YoY in 2023, lower than the GDP growth rate. The real estate sector has yet to demonstrate notable recovery from its downturn. Investment in real estate development dropped by 9.6% in January-December 2023, and the rate of decline kept deepening during the year.
Under the background of waning overseas demand, China's domestic demand – including consumption and investment – will be the most important contributor to its economic development in the coming year. Domestic demand contributed 111.4% to China's GDP growth in 2023, while net exports dragged down the GDP by 0.6 percentage points.
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Edited by Navy Liu: liuchuanjun@mysteel.com
