Economy set to pick up pace in 2024

Zou Yunhan, deputy director of the macroeconomic research office at the State Information Center's Department of Economic Forecasting, said she expects the nation's economy to expand by around 5 percent in 2024.

"The momentum of China's economic recovery is poised to undergo further consolidation this year, propelled by robust policy support, the advancement of industrial transformation and upgrading, and the continuous deepening of reforms."

Meanwhile, due to the "scarring effect" of the COVID-19 pandemic over the past few years, it could still take time for people's spending power to recover, Zou said.

Retail sales, a key measurement of consumer spending, increased by 7.4 percent in December, down from the 10.1 percent growth a month earlier.

Yu Yongding, an academician at the Chinese Academy of Social Sciences, said the contributions of consumption and net exports to GDP growth will likely be lower compared with 2023, and capital formation will thus play a bigger role in maintaining a high growth rate this year.

"If the growth rate of consumption in 2024 is lower than that in 2023, achieving a 5 percent GDP growth may require double-digit growth in infrastructure investment," he said.

Yu said that China should set an annual growth target of at least 5 percent, and the focus should be on expanding budgeted fiscal deficit rates and increase in treasury bonds to provide funding for infrastructure investment.

NBS data showed that China's fixed-asset investment rose by 3 percent in 2023. Infrastructure investment and manufacturing investment grew by 5.9 percent and 6.5 percent, respectively, while real estate investment fell by 9.6 percent in 2023.

Tom Orlik, chief economist at Bloomberg Economics, said that China's policymakers have been doing the right thing by attempting to manage the problem of oversupply without triggering a complete collapse in the real estate sector. He said there will be enough stimulus, financing and support for homebuyers this year.

He said that China has the scope to keep monetary and fiscal policies supportive to help bolster the economy's recovery, adding that a forceful fiscal policy will play a bigger role in boosting domestic demand.

Zheng Houcheng, chief macroeconomist at Yingda Securities, said a further reduction in the reserve requirement ratio as well as policy rate cuts will likely happen in the first half of 2024.