'Two sessions to shore up economic recovery' - RTHK
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'Two sessions to shore up economic recovery'

2024-03-03 HKT 10:27
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  • Analysts say they expect this year's two sessions to focus on measures to boost economic recovery. File photo: RTHK
    Analysts say they expect this year's two sessions to focus on measures to boost economic recovery. File photo: RTHK
China experts do not expect major policy shifts or economic stimulus in the upcoming "two sessions" meetings, but they stressed the need for efforts to speed up recovery and address issues such as youth unemployment.

Delegates from across the country will be in Beijing to attend the annual National People's Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC) sessions.

On Tuesday, at the NPC opening, Premier Li Qiang will deliver his first-ever work report and set the country's GDP growth target for 2024.

Economists told RTHK that they are cautiously optimistic about the prospects.

"Realistically, this year's GDP growth target should be set around 4.5 percent. I've heard a lot of talks about setting it at 5 percent again. That would be way too ambitious," said Wang Dan, chief economist at Hang Seng Bank China.

"If we can achieve that target, that means monetary policy and fiscal policy have to be expanded significantly. Because of the current economic condition, I just don't think there's much room for such kind of macroeconomic policy expansion."

Population decline is another cause for concern, Wang added, with official data showing the decrease accelerated in 2023.

She said the issue would have a long-term impact on the economy.

"This year, there might be a small peak because it's the Year of the Dragon, supposed to be a good year for growth of the population.

"But in the future years, the low fertility will be a new norm for China, and that means the long-term demand for property is simply going to be relatively weak compared with the last few decades," she said.

Analysts are also eyeing possible measures to help ease youth unemployment at the annual meetings. Last June, China's youth jobless rate hit a record high of 21.3 percent, before the release of figures was suspended for five months.

“Because of the new generations, the different values, they [young people] would like to choose jobs that they feel more comfortable with," said Liu Baocheng, founder of the Centre for International Business Ethics at the University of International Business and Economics in Beijing.

"Most of these younger generations are the legacy of the one-child policy. Some of the parents are also there to give more leniency to the young people to really wait and watch for some of the ideal positions,” he said.

Liu added many fresh university graduates prefer pursuing advanced degrees or joining the public sector, and that’s a “warning sign” that more incentives are needed to draw them into the economy.

Brian Wong, assistant professor of philosophy and fellow with the Centre on Contemporary China and the World at the University of Hong Kong, highlighted two major directions for the world's second-largest economy.

First, he said, Beijing needs to roll out large-scale fiscal stimulus to boost both the stock market and consumer confidence.

"The second direction is re-empowerment of entrepreneurship and encouraging more private investors and consumers to come out in favour of participating in the economy. And that in turn requires express signals from the very top, saying that the priority this year is not just about growth, but also in re-establishing the potency and the role of market-based institutions in China's growth trajectory," he added.

On Hong Kong, Wong did not see major changes in Beijing's approach towards the city's affairs, but he said there could be more measures to boost the economy and facilitate further integration.

"First and foremost, I believe, would be expediting and ensuring a more seamless integration for not just local Hong Kong nationals, but also foreign expats and residents in Hong Kong into the Greater Bay Area," he said.

"With longer renewal periods of visas to business travellers, to foreign visitors, and even just expats who live and reside in Hong Kong without qualifying for an existing business visa, that to me is a pretty low-hanging fruit."

'Two sessions to shore up economic recovery'