Additional Efforts Needed To Revive Ailing Chinese Economy: Report

1. Additional Efforts Needed To Revive Ailing Chinese Economy: Report

Chinese leaders have reportedly admitted that additional efforts are needed to revive a sluggish economy hit by weak domestic demand, record-high employment of youths, and an ailing housing market.

Unemployment issue

Top-level officials made this announcement while concluding a week-long key conclave in Beijing. They discussed several challenges, including hidden risks the country is facing, and admitted that achieving a modest 5% growth projection will not be easy.

The main focus of the week-long meeting was how to revive the Chinese economy, which is facing a real estate crisis and soaring youth unemployment.

Addressing the annual National People’s Congress (NPC) on March 5, Prime Minister Li Qiang said the country aims to achieve a 5% growth in 2024 by reforming its development framework, preventing industrial overcapacity, reducing property sector risks, and limiting unproductive local government expenditure.

Furthermore, China aims to achieve an urban unemployment rate of about 5.5% for 2023, which was projected earlier, and create 12 million new urban jobs this year. On Saturday, ministers decided to do more to boost employment and stabilize the country's troubled property market.

"Workers face some challenges and problems in employment, and more effort needs to be made to stabilise employment," Wang Xiaoping, minister of human resources and social security, told a press conference, according to an AFP report. Similarly, Housing Minister Ni Hong added that fixing the property market, which accounted for around a quarter of China's economy, remained "very difficult."

Economic measures

Beijing has taken several measures in recent months in a bid to raise demand and issued billions of dollars in sovereign bonds to boost infrastructure spending.

Besides, China reduced a key benchmark lending rate used to price mortgages last month in an apparent bid to ramp up support for its crisis-hit property sectord

Robust growth in exports

Meanwhile, China registered better-than-expected export growth for the first two months of 2024, signaling a possible recovery in global trade as policymakers work to support the struggling economy.

Chinese exports rose 7.1% year-on-year during the January-February period of the year, while its imports were up 3.5%, exceeding Reuters' projection of a 1.5% growth in the country's inbound shipments for the two months. As a result, China posted a trade surplus of $125 billion for the first two months of 2024.

An economic revival requires boosting household wealth and income, something China's leaders clearly aren't yet ready to do," AFP quoted analysts at Trivium, a research firm specialising in China, as saying in a note.