Global Times: China confident in achieving around 5% GDP growth for 2024, will strengthen counter-cyclical fiscal policies, says vice Minister of Finance

BEIJING, Oct. 28, 2024 /PRNewswire/ -- China is confident to achieve around 5-percent GDP growth target for 2024, and the country will step up counter-cyclical adjustments in fiscal policy in addition to monetary policy stimulus, China's Vice Minister of Finance Liao Min said on Friday during a meeting of the World Bank, according to a readout released on the website of China's Ministry of Finance on Sunday.

The latest remarks of China's Vice Minister of Finance highlight China's commitment to stabilizing the economy. With the roll-out of incremental pro-growth policies, it is anticipated that China's economy will continue to improve in the fourth quarter, analysts said.

The Chinese government recently introduced a package of incremental policies that have garnered significant international attention, Liao said.

Liao said that in addition to monetary policy, China will also strengthen counter-cyclical adjustment of fiscal policy. China will implement a series of strong measures in areas including addressing local government debt, stabilizing the real estate market, raising incomes for key social groups, ensuring people's livelihoods, as well as promoting equipment upgrades and the trade-in of consumer goods.

"These measures aim to leverage government spending to stimulate overall social investment and consumption, thereby increasing effective market demand," Liao said. He stressed that China is confident in achieving the annual economic growth target of around 5 percent, further injecting impetus to drive global economic growth.

The remarks were made at the World Bank's 110th meeting of the Development Committee held in Washington DC on Friday.

During the meeting, Liao noted the positive progress in World Bank's reform led by President of the World Bank Ajay Banga. Liao also said that China supports the reform recommendations included in the report of A Future-Ready World Bank Group, and that China looks forward to their swift implementation.

According to Liao, China hopes that the World Bank will use the 2025 shareholder review as an opportunity to ensure its governance structure will better reflect the new change of the global economic landscape. China also supports the 21st replenishment of International Development Association and is willing to contribute within its own capacity, Liao said.

Fostering optimism

Experts said the latest remarks from Liao on the Chinese economy demonstrated the Chinese government's determination to stabilize economic growth.

It is expected that in the fourth quarter, the government will continue to implement pro-growth policy measures to support economic growth, and advance high-quality development in the long term, Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Sunday.

In recent days, multiple Chinese government departments have introduced a series of incremental measures aimed at further stimulating economic recovery.

China will introduce a package of targeted incremental fiscal policy measures in the near future to boost the economy, Minister of Finance Lan Fo'an told a press conference on October 12.

The package includes increasing the debt ceiling on a relatively large scale in a lump sum to replace existing hidden debts of local governments and help defuse their debt risks, the Xinhua News Agency reported.

In terms of monetary policy, the People's Bank of China (PBC) may further reduce the reserve requirement ratio (RRR) by 0.25-0.5 percentage points by the end of the year, depending on liquidity situation, Pan Gongsheng, PBC governor, said in a speech delivered to the Annual Conference of Financial Street Forum 2024 in Beijing on October 18.

On September 27, the PBC announced a cut in the RRR by 0.5 percentage points for financial institutions.

These policies will play a crucial role in facilitating financing for the real economy, stabilizing the real estate market, and consolidating economic growth momentum, Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times.

"We expect that in the fourth quarter, the Chinese economy will continue to warm up, and market confidence will gradually be restored," Yang said.

In the first three quarters this year, China's GDP grew by 4.8 percent, data released by the National Bureau of Statistics showed, indicating that the world's second-largest economy continues to expand despite facing a range of internal and external challenges.

"With the implementation and effectiveness of the incremental policies, we expect further recovery in economic growth and prices in the fourth quarter," Wu Chaoming, a deputy head of the Chasing Research Institute, told the Global Times.

Amid China's intensive policy measures, foreign institutions have recently revised their GDP growth forecasts for China upward for 2024.

For example, Goldman Sachs lifted its forecasts on China's economic growth for 2024 on the grounds of the country's recent pro-growth measures, Xinhua reported.

China's GDP would expand by 4.9 percent in 2024, up from an earlier forecast of 4.7 percent, according to a report by the investment bank.

SOURCE Global Times