China’s Two Sessions remained hot topic in regional as well as international media for numerous reasons. By presenting the socio-economic achievements of the 2023 and setting the healthy targets of 2024, it attracts huge attention from the policy makers, economists, strategists and financial gurus around the globe, chalking out their future plans of investments, innovations, cooperation and connectivity.
The concluded Two Sessions had many shades and criteria of judging overall economic performances, tagging social development, and nurturing political stability gearing toward greater good and corporate governance in the Chinese government system which is commendable. Thus it was dominated and institutionalized through China’s whole process political system the biggest in the world represented all norms of modern human civilization and traits of advanced democracy which is commendable. By announcing economic achievements and accomplished targets of 2023 the Chinese policy makers successfully decoded real essence of its macro-economy mainly comprising of diversification, digitalization, modernization, qualitative industrialization and openness. These X-Factors of economy negate any kind of financial cyclical crisis as happened in the West.
So it is true reflection of financial transparency, greater banking integration, consolidation of fiscal and monetary targets highlighting the strategic importance of “Three New Driving forces” or “Productive Channels” of its economy. Simply, it will mainly focus on forming new productive forces, which aims to use scientific and technological innovation to drive productivity during 2024. Obviously, despite the Western narrative of so-called “China Collapse Theory”, China’s economy remained stable, sustainable and resilient and achieved GDP of over 126 trillion yuan ($17.51 trillion) and growth rate of 5.2 percent.
The Two Sessions showcased its “economic structural transformation”, “green” and low-carbon elements and social development improvements which shows its real economic strength completely different from the Western Economic Model. Additionally, despite the Western narrative of China’s political instability and downfall of its system the “Whole Process” democratic system of China outperformed all the regional as well world countries. As per the Annual Work Report (2023), departments under the State Council accepted 7955 motions from NPC deputies, 4525 from CPPCC members’ proposals during the 2023 which accounting 95.7 percent of total motions and 96.5 percent of total proposals respectively. All motions have been duly addressed on time which highlights highest level of national capacity mechanism and efficacy of its government machinery. China has also accepted 4700 motions, and motions raised by the NPC deputies, and CPPCC members in the first two months of 2024. In China’s deputies to people’s congress use to come from every region, every field, every industry, and every ethnic group, making it a holistic entity, connecting hub of multiculturalism, caring all the stakeholders and communities in China thus Western false and fake propaganda does not have any substance about so called ethnic discrimination and violation of human rights.
The policy makers have also announced economic targets for 2024 projecting GDP 5 percent, CPI 3 percent, new urban jobs 12 million, grains output 650 million tons, energy consumption per unit of GDP 2.5 percent, ratio of deficit to GDP 3 percent which are all achievable. Critical statistical economic analysis upholds that 5 percent of GDP of 2024 is quiet achievable because to achieve the objectives of the 14th Five-Year Plan and to double the GDP by 2035 the compound annual growth rate should be at least 4.7 percent over the next 15 years.
Evidently the GDP growth target of 5 percent for 2024 absolutely permits reasonable and moderate progress through sustained momentum, qualitative industrialization and consumer confidence.
In this way, every 1 percent increase in China's GDP growth has already created 2 to 2.5 million new jobs in recent years, the target of over 12 million new urban jobs and during 2024 would also require a GDP growth rate of around 5 percent thus China’s economy will be stable and sustainable in the future. It shows a pragmatic attitude, which can bolster the sustainability of macroeconomic policies.
Moreover, consolidation of economic recovery momentum and increasing policy effectiveness, China's recovery is geared to expedite and will achieve new economic targets easily.
Furthermore, Chinese policy makers’ decision to develop industries of future, expanding domestic demand, projected specific pursue bonds for local governments 3.9 trillion yuans, investments from central government 700 billion yuan will further strengthen its economic persuasions during 2024.
The issuance of specific purpose bonds is a wise decision which will be used to support the implementation of major national strategies and the building of security capacity in key areas of modernization and preventing any risks in real estate, debts of local government or financial meltdown in Small and Medium financial institutes in China.
Despite Western propaganda and the US decoupling, the EU’s delinking and imposition of numerous sanctions, China succeeded to upgrade its industrial and supply chains resultantly, production of NEVs 9.443 million increased by 30.3 percent, output of service robots reached to 7.833 million 23.3 percent which ultimately fostered emerging and industries and future oriented industries, promoted innovation and digital economy and production and sale of NEVs accounted for 60 percent of the world’s total.
The China’s production of photovoltaic batteries reached to 540 million kw an increase of 54 percent. Exports of lithium batteries, EVs, and photovoltaic products enhanced 30 percent added value of strategic emerging industries grew at an average annual rate of 15.8 percent, accounting for 13 percent of GDP.
In summary, Bloomberg and Reuters have their own self centric estimations and aggregated concerns about the China’s economy during 2024 because of highly propagated property crisis, so-called deepening deflation, stock market crisis and mounting local government debt woes however, the timely structural reforms and financial adjustments of the Chinese policy makers have already rectified and fixed the emerging situation in the country.
It requires paradigm shifts in the structure of its national economy from manufacturing to high value services, and from investment to consumption. Thus China’s new quality productive forces and expansion of its domestic demands, promotion of big data and launch an AI-plus initiative will give further strengthen, scope and utility, and performance to it.
Hopefully, these new factors of its economy would be vital for the country to shift its economic structure from low-cost manufacturing to high value services.
It is suggested that China must establish policies that consolidate growth patterns and facilitate more investment to domestic consumption by improving its consumption environment and integration of its strategy of expanding domestic demand with efforts to deepen supply-side structural reform. Moreover, integrated policies to promote digital, environmentally-friendly, and health-related consumption will be beneficial in the future.
China has made technological inventions in quantum technology, integrated circuits, artificial intelligence, biomedicine and new energy sectors, and its new three products, namely new energy vehicles, lithium batteries and photovoltaic modules, enjoyed a pleasing export growth rate last year which would also be useful achieving the economic targets of 2024.
The policy makers of China should give more focus to investment in new urbanization and rural revitalization, education, food security and energy security.
It is suggested that all market access restrictions on foreign investment in manufacturing should be abolished, and market access restrictions in services sectors, such as telecommunications and healthcare should also be reduced.
Author of this article is Executive Director of The Center for South & International Studies (CSAIS), and a regional expert on: China, CPEC & BRI, Dr. Mehmood Ul Hassan Khan.
