China’s government has set a GDP growth target of around 5 percent for 2024, mirroring last year’s goal. This target reflects a firm commitment to fostering growth, maintaining employment, and ensuring economic stability as the nation continues to transform its development model.
Emphasis on Stable Employment
The government aims to create 12 million urban jobs and keep the urban unemployment rate around 5.5 percent, aligning with the previous year’s objectives. In 2023, China successfully generated 12.44 million urban jobs with an average unemployment rate of 5.2 percent, suggesting that the new targets are both necessary and pragmatic.
Starting in late January, China launched the “Spring Breeze” campaign, offering about 30 million job opportunities across various industries by early April. This initiative seeks to establish a stable employment landscape and a favorable business environment at the outset of the year. A strong job market and steady income growth are fundamental to enhancing consumer confidence in the long term, which will sustain momentum in commercial real estate sectors such as retail, hospitality, and tourism-related properties.
Advancing New Quality Productive Forces
The government’s report highlights ongoing efforts to promote innovation and technological development to upgrade the manufacturing sector and the broader economic structure. By tapping into new quality productive forces, the aim is to boost total factor productivity and enhance competitiveness. Key strategic emerging industries identified include biotechnology, new materials, new energy, electric vehicles, and artificial intelligence. Notably, exports of “the new three”—electric vehicles, lithium-ion batteries, and solar cells—surged nearly 30 percent year-on-year in 2023 and are expected to continue supporting China’s industrial advancement and economic resilience.
These advanced technology sectors and hard-tech industries are showing promising prospects in the commercial real estate market, bolstered by favorable policy measures. The growth of these industries is anticipated to primarily benefit industrial properties and business parks, with leading companies potentially upgrading to prime office buildings over time.
Boosting Consumption Growth
China is placing significant emphasis on supporting and expanding domestic consumption to drive economic growth. In 2023, consumption contributed 82.5 percent to overall GDP growth. The recent Spring Festival holiday saw strong consumption growth, even when compared to the high base effects from the reopening boost in early 2023. As market sentiment improves and demand recovers, many retailers are planning to open new stores and expand their physical presence, while leading retail asset operators have raised their revenue expectations.
Support for Real Estate Development
The government report reaffirms a focus on mitigating risks in the property sector. China intends to refine supportive policies and meet the reasonable funding needs of developers to promote healthy and stable development in the sector. In the first two months of 2024, authorities announced a range of measures to boost housing sales on the demand side and to ease liquidity and ensure project completions on the supply side. This includes a record 25-basis-point cut to the five-year Loan Prime Rate (LPR) and the introduction of a whitelist mechanism for cash-strapped housing projects.
The timely release and effective implementation of these housing measures are expected to provide certainty to compliant developers and quality assets, increasing market confidence. Alongside more sustainable growth in the residential housing market, these efforts will also help the commercial and industrial real estate sectors mitigate risks and encourage key players to pursue high-quality opportunities for investment and development.
Reference(s):
Positive signals restore confidence in China's commercial real estate
cgtn.com
