Top economic official 'confident' China will hit 2024 growth target

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China's top economic planner said Tuesday that authorities were "fully confident" the country would hit its economic growth targets for the year, after last month announcing a series of stimulus measures that sent stock markets soaring.

Beijing has struggled to reignite business activity as officials target around five percent expansion, which analysts say is optimistic given the numerous headwinds, from a prolonged housing crisis to sluggish consumption and local government debt.

All eyes are on a news conference led by Zheng Shanjie, head of China's National Development and Reform Commission (NDRC), on Tuesday, with investors hoping Beijing would unveil more economy-boosting policies.

"We are fully confident in achieving the goals of economic and societal development for the year," the top economic planner said.

"We are also fully confident in maintaining stable, healthy and sustainable development," he added.

Mainland Chinese stocks soared more than 10 percent at the open Tuesday as traders resumed a blistering rally after a week-long break hoping for more measures from Beijing. That extended a surge of more than 20 percent ahead of the Golden Week holiday.

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Investors have been racing back into stocks on the mainland and Hong Kong since authorities began announcing a raft of stimulus measures to reverse a long period of tepid economic growth.

Many of the measures unveiled so far have been aimed at the flagging housing market, long a key driver of growth but now mired in a prolonged debt crisis exemplified by the fates of developers like Evergrande.

To that end, Beijing's central bank has slashed interest for one-year loans to financial institutions, cut the amount of cash lenders must keep on hand, and pushed to lower rates on existing mortgages.

Several cities -- including the financial crucibles of Shanghai, Guangzhou and Shenzhen -- have also further eased restrictions on buying homes.

"Overall, when we look at the current development, and the development forecast, the fundamentals of our country's economic development have not changed," Zheng said Tuesday.

"With the continued release of various policies, particularly incremental packages, market expectations have recently significantly improved," he added.

Analysts hope officials will unveil further fiscal support measures such as trillions of yuan in bond issuances and policies to boost consumption.

But they caution that deep reforms to the economic system to relieve the debt crisis in the property sector and boost domestic demand are needed if Beijing is serious about resolving the fundamental obstacles to growth.

"The Chinese economy isn't in a crisis and (Beijing) doesn't need to announce a large fiscal spending package for the remainder of 2024 to help China hit its GDP target," China Beige Book's Shehzad Qazi said.

"The real question is whether Beijing will announce a multi-phase spending programme for 2025 and beyond that includes addressing the structural problems holding back the economy's transition to being consumption driven," he added.

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Source: AFP