China’s post-covid economic recovery target

China has set a growth target of around 5 percent for 2023. Beijing will seek to revive investor confidence after the zero-Covid policy took its toll on the economy last year.

On the other hand, in order to adapt to the new era in the country, President Xi Jinping is expected to dismiss much of the economic staff, the prime minister and the central bank governor and appoint people in their place.

ACCELERATE GROWTH

The 5 percent rate, which is in line with analyst estimates, was announced by Premier Li Keqiang at Monday’s inaugural meeting of China’s National People’s Congress.

If Li’s targets are met, he will drive growth of 3% in 2022, after the country’s economy has suffered from prolonged lockdowns.

Beijing was forced to abandon its zero-COVID policy late last year after outbreaks in major cities quickly spiraled out of control and protests broke out across the country.

PROMISE TO FIND WORK FOR 12.5 MILLION PEOPLE

Li announced a 3 percent target for China’s budget deficit-to-GDP ratio this year, while pledging to find jobs for 12 million people and keep the unemployment rate at around 5.5.

Li said: “Many companies affected by covid-19 and other challenges have suffered severe difficulties. “It is difficult to maintain job stability and the budget imbalances of some local governments are significant,” she said.

“It is necessary to consolidate the foundation for stable growth at home,” Li said. “While insufficient demand remains a major problem, private investor and business expectations are volatile,” she said.

ECONOMICS STAFF WILL CHANGE

On the other hand, Chinese President Li Keqiang is expected to be removed from office this year and replaced by Shanghai Mayor Li Qiang.

In addition to Li Qiang, President Xi is expected to name new presidents for many domestic financial institutions, including the People’s Bank of China. In addition, regulatory agencies are expected to participate in the changes.

DETERMINANT FOR THE GLOBAL ECONOMY

Economic activity in China directly affects the world economy. The price of many commodities, especially oil, is determined by the effect of economic activity in China on demand.

Although oil prices rose sharply last year due to the supply impact of the Russia-Ukraine war, they were held back by slowing economic activity in China due to the zero covid policy.

On the other hand, the performance of shares traded on the stock market of companies doing business in China is also directly affected by economic activity in China. For this reason, players in the world economy will closely monitor whether China’s 2023 target will be met or not.