China’s Economic Growth Target Faces Increasing Challenges

China’s 5% economic growth target for 2024 faces growing pressure. Weak consumer spending and uncertain export outlooks contribute significantly. Additionally, the fragile property market threatens the achievement of this goal. Despite recent stimulus efforts, challenges persist. Experts are questioning whether China can overcome these hurdles to reach the target.

Weak Consumer Spending and Deflationary Risks

In recent months, deflationary pressures have escalated in China. New home prices have dropped sharply, the steepest since 2014. Consumer confidence is at its lowest point in over a year and a half. The Chinese government’s reliance on manufacturing and exports for recovery has proven insufficient. This raises concerns over a potential deflationary cycle in the economy.

The Impact of Trump’s Election and Tariff Threats

The election of Donald Trump as U.S. president has added another layer of uncertainty. His threats of heavy tariffs on Chinese goods could further strain China’s economic growth. This external pressure, coupled with internal challenges, has left analysts fearing prolonged stagnation, similar to Japan’s past economic struggles.

Global Banks Doubt China’s Ability to Meet Targets

Before the latest stimulus measures, most global banks predicted that China would fall short of its 2024 growth target. Less than 20% of economists surveyed by Bloomberg expected the country’s GDP to expand by 5%. Analysts have questioned the effectiveness of China’s fiscal and monetary policies in stimulating domestic demand.

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Beijing’s Response to Export Concerns

Although export growth has gained momentum, resistance from other countries has risen. Concerns about the effects of cheap Chinese goods flooding global markets have intensified. Senior Chinese officials, including Vice Finance Minister Liao Min, have defended the country’s industrial strength, emphasizing that its products offer good value and help manage global inflation.

China’s Politburo Pledges Aggressive Economic Stimulus

After a period of reluctance, China’s top Communist Party officials pledged in September to pursue the country’s annual economic targets and stabilize the property market. This commitment marked China’s most aggressive stimulus push since the pandemic.

Partial Economic Relief, but No Significant Boost to Consumption

By mid-November, the stimulus measures had provided some relief to China’s economy. However, they had yet to significantly boost consumption or show clear signs of recovery, leaving the country’s economic outlook uncertain.

China’s growth target faces significant challenges, raising doubts about achieving its goal, according to wsj news.