Beijing (AFP) – China’s leaders are “clearly aware” of challenges facing growth, the head of the country’s top economic planning body said on Friday, vowing to boost sluggish domestic consumption. The comments were made on the sidelines of the annual “Two Sessions” in Beijing, a closely watched political gathering at which the government unveiled on Thursday a growth target for 2026 of 4.5-5 percent, its lowest in decades.
Zheng Shanjie, chairman of the National Development and Reform Commission, told a news conference on Friday that China has a “solid foundation” for achieving that goal. “We are determined, flexible and effective in responding to risks and challenges from various sides,” Zheng said. However, he also said “we are also clearly aware that we still face many difficulties and problems.”
Beijing has battled a persistent downturn in consumer and investor sentiment in recent years, a protracted property sector debt crisis, and trade headwinds with the United States. Leaders in the world’s second-largest economy were reviewing steps this week to address those challenges in the government’s latest Five-Year Plan, an economic, political, and social roadmap that will guide China through to 2030. A 100 billion yuan ($14.5 billion) fund to encourage spending is among measures included in economic planning, authorities said on Thursday.
“Contradictions remain prominent, with insufficient consumer spending and weak growth in private investment,” Finance Minister Lan Fo’an told Friday’s news conference. The new fund will “promote domestic demand through fiscal and financial coordination,” including “four policies specifically supporting private investment and two supporting consumer spending,” Lan said.
China’s economy has slowed in recent years after decades of rapid growth powered by urbanisation, real estate development, and infrastructure investment. One bright spot for Beijing has been exports, which achieved a record boom last year despite a trade war with the United States. But the massive surplus has drawn criticism from key trading partners, who argue that a flood of Chinese goods has squeezed local competition.
Commerce Minister Wang Wentao told reporters on Friday that China’s trade needed balancing. “Exports and imports are like the two wheels of a vehicle. If they are balanced, the vehicle runs smoothly and goes further,” Wang said. With economic expansion targets steadily falling, China’s leaders have increasingly called for “quality” growth. One focus for President Xi Jinping is to achieve technological self-sufficiency in areas deemed critical for national security, including artificial intelligence and computer chips.
Underlining those priorities, Zheng said the “massive scale” and “vitality” of China’s economy give leaders “the boldness and confidence to cope with various risks and market fluctuations.”
© 2024 AFP
