Not too long ago, China’s economy was steaming ahead like a locomotive train at 10 per cent per year.

It was phenomenal.

The train had to slow down at some point.

Over the last few years, the COVID pandemic, supply chain problems, higher interest rates, escalating inflation have disrupted the world economy and China has not been immune.

Last year, China’s economy grew by 5.2 per cent, the lowest in years but ahead of the set target. This year, it is expected to grow at a similar rate by around 5.0 per cent.

The geopolitical tensions, reduced exports, a stalling stock market, and the property crisis have weighed upon China.

Given the circumstances, 5.0 per cent annual growth is indeed impressive but if you look at it from the perspective of the days of yore, then some might view it as a cause of concern.

China has been adept at managing its economy and overcoming challenges.

It has made great strides with EV developments and is now the number one EV manufacturer in the world.

Huawei was prevented from becoming the number one smart phone maker in the world when bans and chip blockades were placed in its way. Such was the company’s ingenuity, that it went ahead and developed its own chips. It overcame, pressed ahead and found a way. Its Harmony Operating System is admirable and needs to be popularised. More people need to know about it.

For 2024, China has announced a lower fiscal deficit target, which many will say runs antithetical to growth. The aim now is to ensure stability while keeping a keen eye on international events.

Of concern for China is a looming Donald Trump presidency. Trump has vowed to place onerous tariffs on Chinese goods and make it more difficult for its imports. Expect Europe to follow its lead here. China must look to markets in Africa, Asia and Latin America with products that are reliable and affordable.

Young people in China need to marry and have children. To sustain and better its economic development, it will necessitate a burgeoning population to service. China must avoid being an economy with an ageing population and must avoid the fate of Japan here.

President Xi Jinping and Premier Li Qiang’s government must make greater efforts to attract foreign investors to bolster China’s US$18 trillion economy. Creating 12 million new urban jobs and reducing the unemployment rate to 5.5 per cent is a good start.

Some western analysts say China’s growth target of 5.0 per cent is specious. But China has confounded many before. China will not choke itself with reckless credit expansion. It is capable of bringing inflation down to 3.0 per cent and doesn’t have to continuously go to the playbook of greater stimulus.

It may be the case that China wants to keep its economy steady and watch what is happening in the world. There is a war in Europe, another brewing in the Middle East and the possibility of a new president in the United States, who is itching to get into a trade war with China.

Speaking at the NPC annual session at the Great Hall of the People, Chinese Premier Li Qiang said that a budget deficit target of 3.0 per cent of GDP had been set with the government’s deficit expected to increase by US$26 billion on last year’s budget figure.

Reviewing 2023’s performance, Li Qiang said: “Overall economic recovery and growth were boosted. China’s GDP surpassed 126 trillion yuan (US$18 trillion), an increase of 5.2 per cent, ranking China among the fastest-growing major economies in the world.

“Looking back at 2023, we can see that as we faced an array of interwoven difficulties and challenges, China’s economy grew in a wave-like fashion amid twists and turns. Indeed our achievements did not come easily. Geopolitical conflicts became more acute, protectionism and unilateralism were on the rise, and the external environment exerted a more adverse impact on China’s development. “