China's economy will maintain healthy, sustainable growth in 2024 and beyond: PBC chief
Consumption to contribute 60% to China’s GDP
Published: Nov 28, 2023 08:45 PM
Tourists visit a scenic spot in Sanya, south China's Hainan Province, Oct. 1, 2023. As a popular tourist destination, Sanya is seeing a tourism boom during the National Day holiday. (Xinhua/Guo Cheng)

Tourists visit a scenic spot in Sanya, south China's Hainan Province, Oct. 1, 2023. As a popular tourist destination, Sanya is seeing a tourism boom during the National Day holiday. (Xinhua/Guo Cheng)

China's economy has continued to recover with a pronounced overall upturn, and the nation is expected to achieve its full-year GDP growth target of about 5 percent in 2023, said Pan Gongsheng, governor of the People's Bank of China (PBC), the central bank, according to a statement on the PBC's website on Tuesday.

China has the advantages of a strong innovative capacity, a broad market, a well-developed infrastructure, a complete industry chain and abundant and high-quality human resources, which, along with policies introduced this year, support the view that the economy will maintain healthy and sustainable growth in 2024 and beyond, Pan noted.

Pan made the remarks during a high-level conference co-hosted by the Hong Kong Monetary Authority and the Bank for International Settlements in Hong Kong, which took place on Monday and Tuesday. 

Pan said that the IMF had raised its forecast for China's GDP growth this year to 5.4 percent, a rate that remains a leader among the world's major economies. He cited several economic indicators, including the rebound in consumption, the rise of investment in high-tech industries and an improvement in the purchasing mangers' index.

Pan noted that China's GDP has exceeded 120 trillion yuan ($18 trillion). The huge base means it's difficult for the economy to maintain high growth rates of 8-10 percent per year as it did in the past.

In addition, China is undergoing a transformation of its economic growth model. The traditional model, which relied excessively on infrastructure and real estate investment, may achieve higher growth in the short term, but it also solidifies structural contradictions and undermines the sustainability of growth. 

High-quality and sustainable development is more important, and China should pay more attention to economic restructuring and cultivating new growth points, said Pan.

This year the PBC has utilized a variety of policy tools, including lowering the reserve requirement ratio and the policy rate, which drove down market interest rates such as the loan prime rates. The central bank will maintain a prudent monetary policy to support the development of the real economy, the governor noted.

"China's economy will continue to grow steadily in the fourth quarter, and the nation will have no problem in achieving economic growth of about 5 percent this year, which will even exceed the government's expectations. The contribution of consumption to GDP will remain above 60 percent in 2023, boosted by support policies throughout the year as well as the year-end consumption season," Hu Qimu, a deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Tuesday.

Several provinces such as Southwest China's Sichuan, South China's Guangdong and East China's Jiangxi provinces have been actively issuing consumption vouchers, or plan to do so, which basically focus on cultural and tourism spending, as well as automobile and home appliance consumption.

For instance, Jiangxi will start issuing 19.53 million yuan in vehicle vouchers on Friday, and Guangdong will issue 100 million yuan in cultural and tourism consumption vouchers to residents and tourists.

Hu said that such vouchers can directly stimulate consumer spending, and they are targeted at strategic emerging industries like new-energy vehicles, which can create a virtuous cycle by pulling the growth of industries through demand.

"The economy is in a state of endogenous repair this year, with some consumers using their incomes to reduce their debts. The process is expected to end next year, so consumption will improve in 2024," Hu noted.

The government has rolled out targeted policies to stabilize market players and support confidence. The latest move was the adoption of a set of 25 measures to boost financial support for private firms, including efforts to diversify financial channels for private businesses.

Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Tuesday that the economy will continue to grow steadily next year on the basis of this year, as the fundamentals of the Chinese economy remain stable with the continuous restoration of market confidence.

With policies including the support for the private economy and promoting digital transformation showing results, China's economic performance in 2024 is worth looking forward to, Wang noted.