China’s leaders meet to discuss growth targets for 2024, say sources

BEIJING (Reuters) – China’s leaders started a closed-door meeting on Monday to discuss economic targets and map out stimulus plans for 2024, four sources familiar with the matter said.

The annual Central Economic Work Conference, during which President Xi Jinping and other top officials chart the course for the world’s second-largest economy next year, is likely to end on Tuesday, the sources said.

Investors are closely watching for clues on next year’s policy and reform agenda as China’s economy has struggled to mount a strong post-pandemic recovery amid the deepening housing crisis, local government debt concerns, slowing global growth and geopolitical tensions.

The Politburo, a top decision-making body of the ruling Communist Party, said on Friday that fiscal policy would be moderately strengthened and will be “flexible, moderate, precise, and effective”, to help spur the economic recovery.

A flurry of policy support measures have proven only modestly beneficial, raising pressure on authorities to roll out more stimulus.

China’s government advisers have told Reuters that they would recommend economic growth targets for 2024 ranging from 4.5% to 5.5%, with the majority favouring a target of around 5% – the same as this year.

“We are likely to set a growth target of around 5%,” said a policy insider who spoke on condition of anonymity. “We need to step up policy support for the economy.”

China’s state council, or cabinet, could not immediately be reached for comment outside business hours.

Analysts at Citi expect China to set a fiscal deficit target of 3.8% of gross domestic product, or 3% of GDP on top of 1 trillion yuan ($139.32 billion) in special treasury bonds, and a special local government bond quota of 3.8 trillion yuan.

In October, China unveiled a plan to issue 1 trillion yuan in sovereign bonds by the end of the year, raising the 2023 budget deficit target to 3.8% of gross domestic product (GDP) from the original 3%.

Although key economic targets are expected to be endorsed at the meeting, they will not be announced publicly until China’s annual parliament meeting, usually held in March.

Last week Ratings agency Moody’s (NYSE:) slapped a downgrade warning on China’s credit rating, saying costs to bail out debt-laden local governments and state firms and control its property crisis would weigh on the growth outlook of the economy.

China’s growth is see on track to hit the government’s target of around 5% this year.

($1 = 7.1775 renminbi)

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