China has established an ambitious GDP target amidst regional tensions and an aging population.

China has set its GDP growth target at 5%, aligning with analysts’ expectations amid a backdrop of regional tensions and demographic challenges. Premier Li Qiang addressed the “challenges” confronting China’s leaders during his delivery of the annual government work report at the National People’s Congress (NPC), citing global economic conditions, regional tensions, and domestic issues like subdued consumer demand and a tough labor market.

While a draft version of the government work report mentioned “intensifying geopolitical conflicts” as a negative pressure on China’s economy, Li omitted this during his speech. The 5% GDP target mirrors that of 2023, reflecting a cautious approach as China emerges from strict zero-Covid measures that impacted its economy.

Structural issues, such as an aging population and a declining workforce, pose long-term challenges. Official data indicates a decline in the working-age population’s contribution to the economy, emphasizing the need for sustainable growth strategies.

While China officially reported a 5.2% GDP growth in 2023, independent economists suggest a lower figure, with some estimating it as low as 1.5%. Achieving the 5% target for this year may prove ambitious given structural constraints and evolving policy priorities in Beijing. The International Monetary Fund forecasts China’s economy to grow by 4.6% in 2024.