Chinese Premier Li Keqiang on Sunday revealed China’s 2023 Gross Domestic Product (GDP) growth target at around 5 percent when delivering a government work report at the first session of the 14th National People's Congress in Beijing.

Pragmatic

"China's growth target for this year is very pragmatic and will help consolidate the country's economic fundamentals," said Raymond Zhu, president of the East and Central China Committee of CPA Australia, a major accounting body.

A pragmatic GDP growth target is conducive to sending positive signals to markets, boosting confidence and focusing the attention of all sides on improving the quality and effectiveness of development.

“The GDP growth target reflects consideration of last year’s low base effect and requirements for economic development in the 14th Five-Year Plan and the Long-Range Objectives through the Year 2035,” said Pang Ming, chief economist and director of research at Jones Lang LaSalle Greater China.

China is a developing country and development is the first priority, according to the National Development and Reform Commission (NDRC), China’s top economic regulator. The country needs to maintain its appropriate economic growth based on quality and effective development. Meanwhile, economic growth is necessary for expanding employment, improving people’s livelihoods and preventing and defusing risks, the commission said.

Achievable

The forecast growth target of about 5 percent is a medium-high rate given China’s large economic aggregate, which is also relatively high compared with other major economies in the world.

Considering China’s optimized COVID-19 response measures, support policies and relatively low economic base figure of last year, a 5 percent GDP growth target was highly achievable, and an even higher level might be reached, according to Wen Bin, a chief economist of China Minsheng Bank.

Bai Jingming, a researcher at the Chinese Academy of Fiscal Sciences, said: "The GDP target is in line with the principle of 'seeking progress while ensuring stable development'. It is achievable and has left room for risks."

“There is still room for China to implement expansionary macroeconomic policies,” said Yu Yongding, a member of the Academic Divisions of the Chinese Academy of Social Sciences. “If the pandemic is under control and no ‘black swan’ event occurs, Chinese economy is expected to see a strong rebound this year.”

On top of that, China's local areas have also expressed their confidence in the economic prospects for this year. Among 31 provinces, autonomous regions, and municipalities, 27 have higher GDP growth targets, and 23 set targets of 5.5 percent or more. NDRC said that the confidence in local areas and their measures would lay the foundation for achieving the national economic growth target.

According to Pang, every percentage point increase in GDP could create about 2-2.2 million new jobs. If China could realize a 5 percent GDP increase in 2023, the booming economy would provide a strong driving force for urban employment and meet the diverse needs of society, he said.