China Sets its Economic and Technological Vision for 2024 with Limited Details on Reforms – Sky Bulletin
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BEIJING (AP) — The strategic economic plan unveiled by China for 2024 emphasizes technological innovation and modest budgetary expansion while providing few specifics on how the nation will achieve long-awaited reforms critical to foreign enterprises and investors.
During the National People’s Congress on Tuesday, Premier Li Qiang’s work report included a robust 7.2% increase in defense spending and general fiscal growth. With aspirations to fortify China’s technology sectors, including semiconductor development, the government aims for approximately 5% economic growth—a challenging target according to some analysts.
This strategy aligns with President Xi Jinping’s push for greater technological autonomy and strength amidst ongoing tensions with the United States over cybersecurity and national security.
The work report presented by Li serves not only as a recap of past achievements but also as a disclosure of policy directions that can impact domestic and foreign corporations.
Although the address aimed to highlight policy goals, it lacked sufficient reassurances for foreign businesses contemplating their future in China, remarked James Zimmerman, an attorney and former chair of the American Chamber of Commerce in Beijing.
Without clear action plans or directions for reform, the country appears to be taking a “business-as-usual” approach, leaving much to speculation. The omission of the premier’s traditional post-congress press conference signals a departure from past transparency norms, according to Zimmerman.
Tianchen Xu from the Economist Intelligence Unit observed that the report largely reiterated government positions from the preceding half-year.
To truly catalyze progress, tangible policies around investments in sectors like telecoms and healthcare are needed. Private enterprises also require stronger legal mechanisms to enforce debt collection.
Xu highlights that without concrete action, these commitments remain unfulfilled. In the wake of these announcements, Hong Kong markets responded negatively, with tech stock prices, including notable companies like Alibaba, Baidu, and JD.com, experiencing significant drops.
Lynn Song from ING Economics shared that the reaffirmation of the 5% growth objective was expected, as any reduction might undermine market confidence further. Nonetheless, maintaining this growth level in 2024 poses a significant challenge.
Additional points from the economic report encompassed initiatives to boost domestic consumption through incentives for trading in old appliances and vehicles for newer models, including electric ones. Furthermore, research and development expenditures are planned to rise by 10%. Alongside these, increased military financing to 1.67 trillion yuan ($232 billion) aligns with the prior year’s growth.
The report also declared intentions to issue ultra long-term special bonds supporting key industries and security capabilities, as well as to allocate funds for industrial and manufacturing advancements.
The government pledges to make headway in semiconductors and advanced IT, emphasizing market-based solutions. These commitments dovetail with broader objectives to foster scientific and technological independence and prowess within the nation.
The presented report, which is anticipated to receive approval when the congress concludes, advocates for energy consumption reduction of 2.5% this year and advances toward “carbon neutrality,” highlighting strategic mining initiatives and the promotion of new energy systems.
China’s economic plan for 2024 clearly emphasizes a drive towards technological innovation and strengthening self-reliance amid international competitiveness. Nevertheless, the lack of specific reform strategies may continue to cast uncertainty for foreign businesses and investors. Meanwhile, increased military spending and initiatives to stimulate domestic consumption show the nation’s focus on both external posture and internal resilience. As the global economic landscape continues to evolve, stakeholders will be watching closely to see how China navigates these ambitions and the impact on its economic performance.
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