Premier assembles experts for chat ahead of first-quarter data release

While getting the lay of the land from economists and entrepreneurs, Premier Li Qiang painted a big bullseye on sustainable economic growth while acknowledging what has been a persistent lack of demand and pledging to remove on-the-ground barriers.

In talks concerning the current state of the world’s second-largest economy – about a week before the anticipated release of first-quarter data – China’s No 2 official discussed what still needed to be done against the backdrop of domestic hurdles and mounting external uncertainties.

The country needs to “focus on scientific and technological innovation to promote industrial innovation and the outstanding issue of insufficient effective demand” as it looks to build internal growth momentum, an official readout quoted the premier as saying in the Monday meeting.

The first-quarter economic data, set to be released by the National Bureau of Statistics next Tuesday, is poised to provide fresh insight into the country’s recovery and help gauge how leadership intends to keep China’s gross domestic product (GDP) growth at “around 5 per cent” this year.

Contending that Beijing’s macro policy mix was working, Li said: “The current external environment is increasingly complex, severe and uncertain, and we still need to work hard to fix problems that exist in the economy.”

Solutions should include improving the consistency of policies and better executing them in practice, he said. The message comes as authorities have been scrambling to shore up business confidence and inject life into economic-boosting activities.

Those invited to share their insights, including four key economists and four business leaders, said “positive factors in economic development are increasing, and market confidence has improved”, while conceding stiff headwinds were still an issue.

The premier took the opportunity to reiterate that the economy had “a solid foundation and many advantages”, and that the longterm upward trend of China’s development would not abate.

Some investment banks and international organisations have already raised China’s economic growth forecasts for the year following upbeat figures for January and February. Owing mainly to better policy delivery and positive figures concerning consumption and investment, Citi has lifted its growth forecast from 4.6 per cent to 5 per cent. Nomura has also raised its projection from 4 per cent to 4.2 per cent.

And on Monday, the Asean+3 Macroeconomic Research Office, a Singapore-based organisation, estimated China’s growth would reach 5.3 per cent for 2024, saying its growth momentum should pick up moderately, and that authorities had “ample policy space and capacity to navigate through these challenges”.

Speculating on the coming March and first-quarter data, Wang Tao, an economist at UBS Group, was expecting better quarter-on-quarter momentum but slower year-on-year GDP growth.

“Partly due to a high base [from 2023], we expect a year-onyear decline in property sales, slower retail sales and [industrial production] growth, largely stable [fixed-asset investment] growth, and we expect exports will slide into a small year-on-year contraction,” she said in a research note.

But there are still multiple challenges, as many economists have flagged, including a prolonged property market slump, huge levels of local-government debt, and weak exports.