MNI BRIEF: NPC: China Targets 2023 GDP Growth Of “Around 5%”

China set a GDP growth target of “around 5%” for 2023, with a higher fiscal deficit and increased local government debt aimed at boosting consumption and investment, said Premier Li Keqiang in his Work Report during the opening ceremony of the 14th National People’s Congress on Sunday.

Li said the focus was to “prioritise economic stability and pursue progress while ensuring stability”, adding that “policies should be kept consistent and targeted, and be carried out in more coordinated way”. The foundation for growth needs to be consolidated and “insufficient demand remains a pronounced problem,” he said.

The government's fiscal deficit/GDP ratio will rise to 3% compared with 2.8% in 2022, with the quota for local government special bond lifted to CNY3.8 trillion from CNY3.65 trillion in 2022 to accelerate the launch of big projects included in the 14th-five-year plan. Premier Li noted preferential tax and fee policies will be improved, saying the government would “extend and further refine policies on tax and fee cuts, tax rebates, and tax deferrals as the situation requires”.

The People’s Bank of China will implement “a prudent monetary policy in a targeted way”, he said. CPI increase will be around 3% and the M2 money supply and aggregate financing will increase generally in line with nominal economic growth. Meanwhile, the yuan would be kept generally stable “at an adaptive and balanced level”, he said.