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Job creation, GDP target among key economic indicators to look out for at China’s two sessions

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BEIJING: At China’s most important annual political meetings – the two sessions – which begin on Monday (Mar 4), all attention will be on the country’s key economic indicators.

Analysts have speculated that the central government will set a gross domestic product (GDP) growth target of around 5 per cent. This is after at least five of China’s top urban economies had set their targets at above 5 per cent during the local versions of the meetings.

However, chief economist at Hang Seng Bank China, Ms Wang Dan, said it is a tall order, given the relatively high base of 5.2 per cent growth in 2023. She said a target of around 4.5 per cent would be more viable.

“If we set a higher than 4.5 per cent target, that means the economy needs a much bigger boost, especially in the housing market. But the fundamentals in China are relatively weak at this point,” she told CNA.

“Blowing up the housing bubble is not in the government’s or individuals’ best interest. So a lower target is more realistic.”

The annual GDP growth forecast is closely watched as the effect of a more demanding target will cascade down to other aspects of policy-making.

“If it is around or higher than 5 per cent, that means China will continue to implement pro-growth fiscal policies, and also a rather pro-growth monetary policy. Anything that’s below 5 per cent means that China will focus more on innovation or transition to a more sustainable green economy,” said Mr Li Wei, senior China economist at Standard Chartered Bank.

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