BEIJING: Positive factors are emerging in China, including better-than-expected economic indicators and increasingly clear signals of more policy efforts to boost growth, portending that the nation’s economic recovery is most likely to cap the first year of post-pandemic rebound on a solid note and kick off 2024 on an even stronger note, economists said on Sunday.
At the highly anticipated upcoming Central Economic Work Conference, which sets the tone for economic policymaking for the coming year, top policymakers will likely signal more forceful and effective measures to tackle risks and boost growth in 2024, which would boost confidence in the world’s second-largest economy amid lingering global downside risks, the economists noted.
An official date has not been announced for the conference, but it is usually convened in mid-December. Traditionally, official media would release a readout of the closed-door conference following its conclusion. While the readout often does not include any specific targets, which are usually released during the national two sessions to be held in March, global markets are watching closely for any clues on China’s economic agenda for 2024.
“After the meeting on Friday, I think the general direction of economic development for next year is quite clear. Next year’s policy will focus on seeking progress to help ensure stability, instead of focusing on maintaining stability. It puts an emphasis on progress through proactive efforts, rather than a passive response to ensure stability,” Tian Yun, a Beijing-based economist, told media on Monday.
Tian was referring to a meeting of the Political Bureau of the Communist Party of China Central Committee held on Friday, which analyzed and studied the economic work of 2024, among other things.
The meeting, usually a prelude for the Central Economic Work Conference, stressed that it is important to boost economic vitality, prevent and mitigate risks, improve social expectations, consolidate and promote the momentum of economic recovery, and effectively improve the quality of the Chinese economy and promote its growth within a reasonable range, according to the Xinhua News Agency.
It also said that proactive fiscal policies should be appropriately strengthened and improved in both quality and efficiency, while prudent monetary policies should be flexible, appropriate, precise and effective.
“I think this shows that next year’s economic work will be more active and proactive than this year’s,” Tian said. He noted that there are solid foundations for China’s economy to maintain growth rates of up to 5 percent in 2024. “China will remain the locomotive of global economic growth. That locomotive has not stalled.”
Several recent indicators also suggest that China’s economic rebound is picking up pace and will likely further consolidate in 2024. Latest official data showed that China’s exports expanded by 0.5 percent year-on-year in November, the first expansion since April and beating forecasts.
Domestic tourism is further accelerating, with bookings for trips during the upcoming New Year’s Day holidays increasing fourfold year-on-year and hotel bookings increasing fivefold, according to China Media Group, citing data from online travel booking platforms.
Amid such positive signs, many international organizations and observers expect China’s growth rate to reach its official target in 2023 and maintain relatively higher speed in 2024.
“In all likelihood, the growth target of ‘around 5 percent’ in 2023 is expected to be achieved quite comfortably, assuming GDP growth in the fourth quarter hits 4.5 percent, which is not exactly a high bar,” Xu Sitao, chief economist and partner at Deloitte China, told the media.
“In 2024, we forecast 4.5 percent, a number on the conservative side mainly because weakness in the property sector could well persist for more than a few months,” Xu said.
While pointing out concerns about the real estate market, Xu also noted that unlike most emerging market economies, China’s balance of payments is in a strong position and consumers’ leverage remains low.
“As global interest rates have peaked, China’s central bank has more room to cut interest rates in 2024. More importantly, fiscal policy will be more expansionary in 2024,” the Deloitte economist said.
The IMF said in November that the Chinese economy is on track to meet the Chinese government’s 2023 growth target, reflecting a strong post-COVID recovery. The multilateral lender raised China’s growth projection for 2023 from 5 percent in October to 5.4 percent, and from 4.2 percent to 4.6 percent for 2024.
Economists said that as China’s economic recovery further consolidates in 2024, backed by policy measures, expectations for stronger growth in China will further rise.
Global confidence in China’s growth prospects in 2024 will continue to rise, when China’s plans for next year’s economic development become clear following the Central Economic Work Conference and implemented following the two sessions in March, Tian said.
