China’s 2023 Growth Target Within Reach – Central Bank Governor, According to Reuters

BEIJING (Reuters) – China’s central bank governor announced on Wednesday that the country is likely to meet its annual gross domestic product (GDP) growth target for the year. However, he emphasized the need for a transformation in the growth model to focus on high-quality and sustainable development.

In a speech, People’s Bank of China Governor Pan Gongsheng noted that recent growth momentum has improved due to a steady recovery in production and consumption, alongside stable employment and consumer prices. Beijing has set an economic growth target of approximately 5% for this year.

"Our country’s economy requires a reasonable growth rate, but more importantly, we must achieve high-quality and sustainable development," Pan stated, underscoring the importance of changing the economic growth approach over simply seeking high growth rates.

The central bank intends to maintain reasonable credit growth and keep liquidity sufficiently abundant, aiming to "activate financial resources that have been inefficiently occupied and improve the efficiency of fund utilization," although specifics were not provided.

Chinese authorities have committed to directing more financial resources towards technological innovation, advanced manufacturing, and green development initiatives.

Pan also indicated that monetary policy discussions will increasingly focus on cross-cyclical and counter-cyclical adjustments. China is working to spur growth following a brief post-COVID-19 recovery, which has since been hampered by a prolonged slump in the property market and risks associated with local government debt.

Recent economic data revealed that imports unexpectedly increased in October, while exports fell at a faster rate. To address real estate weaknesses, Pan asserted his intent to ensure that financial institutions maintain stable financing channels through property credit and bonds.

Additionally, he noted that liquidity support would be provided to regions with high debt levels when necessary, while also pledging to strictly manage investment in new projects in areas burdened with significant debt.

Pan reiterated the central bank’s commitment to keeping the yuan stable, preventing the development of one-sided and reinforcing market expectations regarding the currency, and mitigating the risk of significant fluctuations.

So far this year, the yuan has depreciated by more than 5%, making it one of the weakest-performing currencies in Asia.