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Mia Nulimaimaiti

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This story has been made freely available as a public service to our readers. Please consider supporting SCMP’s journalism by subscribing in our spring flash sale.
China’s finance and commerce ministers, as well as the heads of the People’s Bank of China, National Development and Reform Commission and China Securities Regulatory Commission, met the press on Wednesday during the annual “two sessions” in Beijing.
The event followed a day after Premier Li Qiang delivered his first government work report on the opening day of the National People’s Congress.
Li announced on Tuesday China would set an annual gross domestic product growth target of around 5 per cent for 2024, but questions remain on how Beijing will address the problems faced by the world’s second-largest economy, including its property crisis and local government debt woes.


As it happened: China’s ‘two sessions’ 2024 – Beijing defends realistic GDP goal, vows to crack down on financial market irregularities

China’s finance, commerce, banking, development and securities heads face the press in Beijing during the annual “two sessions”. Photo: Xinhua

China’s finance, commerce, banking, development and securities heads face the press in Beijing during the annual “two sessions”. Photo: Mia Nulimaimaiti

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China’s finance, commerce, banking, development and securities heads faced the press in Beijing during the annual ‘two sessions’
Questions remain on how Beijing will address the problems facing its economy, including a property crisis and local government debt woes


China’s finance, commerce, banking, development and securities heads faced the press in Beijing on Wednesday during the annual ‘two sessions’.


Two Sessions 2024 (Lianghui)

China economy

China trade

People’s Bank of China (PBOC)

China's economic recovery

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A day after Premier Li Qiang delivered his first government work report on the opening day of the National People’s Congress, China’s finance and commerce ministers, as well as the heads of the People’s Bank of China, National Development and Reform Commission and China Securities Regulatory Commission, face the press in Beijing.
For the first time in three decades, China’s premier will not host a press conference at the end of the annual parliamentary sessions, so Wednesday’s event offers Beijing a chance to put forward its agenda for the year ahead, after again having set a gross domestic product growth target of around 5 per cent for 2024.



Welcome

Lan Foan - China’s minister of finance, who was appointed in October.

Wang Wentao - China’s minister of commerce, who was appointed in December 2020.

Pan Gongsheng - governor of the People’s Bank of China, who was appointed in July.

Zheng Shanjie - director of the National Development and Reform Commission, who was appointed in March last year.

Wu Qing - chairman of the China Securities Regulatory Commission, who was appointed in February.



Who is attending today’s press conference?

Questions remain on how Beijing will address its property crisis and local-government-debt woes after Premier Li Qiang announced on Tuesday that the government would set an annual gross domestic product (GDP) growth target of around 5 per cent for 2024.
China also faces pressure in attracting foreign investment, as well as retaining reinvestment from multinationals, after foreign direct investment fell in 2023 by 13.7 per cent, year on year, to US$163.3 billion.
Delivering his maiden work report at the annual meeting of the National People’s Congress, Li said the target for 2024 was to create more than 12 million new urban jobs, while keeping the urban unemployment rate at 5.5 per cent and inflation at 3 per cent.


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Li also said Beijing had set its deficit-to-GDP ratio at 3 per cent for 2024, with the government deficit set to rise by 180 billion yuan (US$25 billion) from 2023.
To address funding shortages in major projects, Li said that new “ultra-long” special treasury bonds would be issued.
A total of 1 trillion yuan worth of special treasury bonds would be issued in 2024 for implementing major national strategies and building security capacity, Li added.
Local governments would also be assigned a quota of 3.9 trillion yuan of the so-called special-purpose bonds to support infrastructure growth, compared with 3.8 trillion yuan in 2023.


Li outlined in the work report that the government would also reform the tax and fiscal system, without elaborating further.
He also vowed to come up with measures to support state-owned enterprises, private firms and foreign companies, highlighting their importance in “modernising” China’s economy.
The so-called negative list – sectors and industries that are off-limits to both Chinese and foreign investors – would be reduced, while restrictions on foreign investors in manufacturing would also be lifted.

Market access for telecommunications, medical and other service industries would also be relaxed for foreign companies, Li said.
Li also pledged to punish those that impose “arbitrary” charges and fares on businesses.
He also promised to increase the proportion of loans and expand financing options for private companies, which have struggled to source funds while also suffering from payment delays and cash-flow risks.

Recap of Premier Li Qiang’s first government work report

1. As it happened: China’s ‘two sessions’ 2024 – Premier Li Qiang sets GDP target of around 5% for the year
2. ‘Two sessions’ 2024: risks ahead but China’s economy to stay on long-term, tech-led course
3. China’s ‘two sessions’ 2024: did Premier Li Qiang’s speech move the needle for foreign, private business?


4. Chinese Premier Li Qiang raises threat of ‘external interference’ in Taiwan during first ‘two sessions’ work report
5. ‘Two sessions’ 2024: Premier Li Qiang vows China’s ‘new type’ of diplomacy will pursue equality and order
6. Smiles, a few words … China’s new premier makes his debut next to Xi Jinping

7. China’s ‘two sessions’ 2024: defence budget signals military readiness, not imminent war, experts say
8. China makes science and tech a budget priority with 10% jump in spending during ‘two sessions’
9. ‘Two sessions’ 2024: Xi Jinping says while China pursues ‘new productive forces’ it must avoid economic bubbles
10. China’s ‘two sessions’ 2024: long-awaited reform for 300 million migrants could open wellspring of demand


10 things you may have missed from of our ‘two sessions’ coverage so far

China’s finance, commerce, banking, development and securities heads face the press in Beijing from 3pm during the annual “two sessions”.




Stage is set

China’s finance and commerce ministers, as well as the heads of the People’s Bank of China, National Development and Reform Commission and China Securities Regulatory Commission, have taken the stage in Beijing.



Speakers take the stage

National Development and Reform Commission chairman Zheng Shanjie is asked about China’s around 5 per cent gross domestic product target for 2024, which was announced on Tuesday.


First question

The 5 per cent target is ambitious but reachable for China: “It can be reached with a jump,” Zheng Shanjie says.



‘Jump’ to reach GDP goal

Zheng Shanjie, head of the National Development and Reform Commission, says he noticed international institutions have been assessing China’s economy and that they are always adjusting their assessments.
He says China’s GDP growth target of 5 per cent this year is a result of the central government’s own assessment of both the current and long-term situations.
“It is scientifically supported and coherent with the country’s 14th five-year plan. It matches our economy’s potential and is achievable through our hard work,” Zheng says.


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GDP assessments ‘always adjusting’

Zheng Shanjie, head of the National Development and Reform Commission, said China - with its 126 trillion yuan (US$17.5 trillion) economy, mature business environment and big market - can offer vast opportunities for foreign investors.


Foreign investors have ‘vast opportunities’

Zheng Shanjie hails China’s “new three” exports – namely electric vehicles, lithium-ion batteries and solar panels – as demonstrations of China’s strength in its manufacturing exports.
“The overall growth has been 30 per cent from the year before,” Zheng says.
“This exemplifies that China is accelerating its transition from old to new economic engines, and that our manufacturing quality keeps improving,” he says.
“Such high-quality development of our manufacturing sector will bring new drivers to the market.”



‘New three’ exports lead way in manufacturing

China’s January- February power generation was up 11.7 per cent from a year earlier, Zheng Shanjie says, pointing to the increase being indicative of China’s economic improvement.



China’s power output on the rise

China’s economic recovery is on increasingly solid footing, Zheng Shanjie says, with smoother circulation in the domestic market and immense business opportunities for overseas investors - both of which are conducive to stronger growth momentum.
“High-quality development is at full speed and China’s economy is more resilient,” he says.
Zheng says the government’s special bonds, consumption support measures and tax reductions will help the country “fight unpredictable external factors”.


‘Solid footing’, stronger growth

The National Development and Reform Commission chairman is a busy man.



Second question for Zheng Shanjie

Zheng Shanjie lists several potential roadblocks for China’s economy, which he says include “an increasingly challenging external environment”, difficulties establishing a unified domestic market, keen competition within some industries and risks involved in business operations.
“But objectively speaking, any country would face challenges in their development,” he says.
“For China, these problems only emerge because we are progressing. They will be solved as we continue to develop.”


Challenges ‘will be solved’ as China develops

NDRC chief Zheng Shanjie says that local-level special bonds, a key source of funding for construction projects, will be used more broadly in the future.
Such bond proceeds have previously been allowed to increase the capital base of local banks.



More special bonds for construction

Zheng Shanjie says a more convenient investment environment for private businesses will be created by giving “more space, lower cost” to efficient investment.
“We have been identifying projects for private enterprises to invest in, and finding new sources of money for private enterprises,” Zheng says.
China will further encourage private investment, which accounts for more than half of total investment, via support for participation in major national projects.


‘More space, lower cost’ for investment efficiency

Finance minister Lan Foan says China will offer further tax cuts for tech innovation and the manufacturing sector this year.


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New tax breaks for tech, manufacturing

Consumption, which contributed to 82.5 per cent of China’s economic growth last year, will continue to be a major driver of activity this year, Minister of Commerce Wang Wentao says.
He says boosting consumption will hinge on two major elements: incentivising the replacement of used cars and home appliances and elevating services consumption.



Consumption still a major growth driver

Central bank governor Pan Gongsheng says China has ample room for monetary policy and its toolbox remains deep.
China can afford to make further cuts to its reserve requirement ratio (RRR), as the country’s RRR average of 7 per cent is still high compared with other countries, he says.
Pan adds the central bank will also focus on stabilising price levels and pushing for a mild rebound in prices. China has faced mounting deflationary pressure since late last year due to weak demand.


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Central bank: more cuts coming to reserve requirement ratio

Pan Gongsheng says China’s monetary policies will continue to balance short- and long-term expectations, mitigate risk, take the internal and external environments into account, create a predictable environment and keep prices at a stable rate.
The yuan exchange rate can maintain basic stability this year, he says, given the widely anticipated monetary policy turnaround in developed markets, the waning momentum of the US dollar index and China’s improved economic fundamentals.



PBOC governor stresses stability in prices, exchange rate

National Development and Reform Commission chairman Zheng Shanjie says the large-scale home appliances trade-in programme will be a multi-trillion-yuan market, benefiting both consumption and manufacturing.
The government’s planned initiative to take in old home appliances and cars could create an enormous consumption market, he says, as research has shown that there are currently at least 336 million vehicles and 3 billion washing machines, refrigerators and air conditioners in the country.



Upcoming trade-in programme touted

Pan Gongsheng says the central bank will create two more relending tools to support tech innovation and technological renovation.
It will restrict lending to industries that are at overcapacity.



China to create two more relending tools

Finance minister Lan Foan says the government’s work report has indicated very clearly that “keeping belts tightened” in government operations will continue to be a long-term approach, but he adds that this does not mean the government won’t spend.
“We will splurge and cut costs when necessary,” Lan says. “We will be more focused on the use of resources.”
Lan pointed to how governmental administrative costs were cut by 20 per cent last year, when compared with 2019, while spending on public goods increased by 25.5 per cent.
Lan also said the government is willing to increase the budget in sectors such as science and tech development, which he said had increased by 30 per cent from 2018-23.


Spending splurge in some areas, necessary cuts in others

Zheng Shanjie mentions that China’s exports were up by 10 per cent for both January and February, but he did not provide details on whether the data was based on US dollars or yuan.
China will release combined trade data for January and February on Thursday.


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China trade up by 10% in January, February

Wu Qing, chairman and party chief for the China Securities Regulatory Commission, the country’s top securities regulator, says he is “just a rookie” as he has held the job for less than a month.
Asked for his views on recent changes in the capital markets, he calls for “open and just” regulation and vows to protect small investors.
Making the capital market more “transparent and fair” is the most important principle for a supervising body, he says, and pledges to protect the legal rights of small and medium-sized enterprises.



‘Rookie’ regulatory head says small investors, enterprises are paramount

To stabilise financial markets and restore investor confidence, the China Securities Regulatory Commission will supervise markets with strict conditions and a strong legal foundation, according to its chairman, Wu Qing.
He says cracking down on cases that involve fraud, market manipulation and backdoor trading will also take precedence in the commission’s efforts.


China vows to crack down on insider trading, market fraud

New China Securities Regulatory Commission (CSRC) chairman Wu Qing says the quality of listed enterprises should be raised so investments will be made more efficient.
“We will continue to talk to local governments and market players for enterprises to have a better operating environment,” he says.
Wu promises further protections for investors in order to restore their confidence, especially those engaged for the long term. He emphasises the need for quality in IPOs, and to allow enterprises to play a more “dominant role” in the market.



Investors to be protected, ‘quality’ IPOs needed

Commerce Minister Wang Wentao warns that China faces “very severe” trade prospects this year amid weak external demand and geopolitical conflicts.
Wang says China’s export growth in March may be lower because of the high comparison base from last year, but it’s trending upward.
Minister also says he is confident in China’s foreign trade prospects because the nation is trying to move up the global value chain with its innovation, and is opening up its market for goods.



‘Very severe’ trade prospects loom for China

Minister of Commerce Wang Wentao says finding new momentum in foreign trade will include policies to recruit new manufacturing partners outside the country to build new supply chains for mid-priced goods.
There will also be improvements in e-commerce regulations, he says, to create a better operating ecosystem to “unleash” the economic potential of these platforms.
Wang says China will continue facilitating cross-border e-commerce and provide further assistance on customs clearance and taxation to build a well-functioning ecosystem.



Policies to lubricate internal, cross-border commerce

National Development and Reform Commission chief Zheng Shanjie says urbanisation is key to China’s economic progress, pointing to research that shows a 1 per cent increase in urbanisation would spur trillions of yuan worth of new investments and 200 billion yuan worth of consumption potential.
Zheng said one of the major tasks this year is to remove restrictions in smaller regions for migrant workers to become residents and enjoy rights in social welfare, housing and medical care, as well as childhood education.
How expanding China’s urban residency may unleash 2 trillion yuan in spending


Urbanisation can be economic boon, but restrictions remain

China Securities Regulatory Commission chairman Wu Qing says the quality of listed companies should be enhanced by improving supervision.
Wu says this will involve conducting more frequent and larger-scale checks on companies that are applying for initial public offerings (IPOs).
He adds that regular checks on listed companies will also be increased, in a bid to curb illegal activities such as fraud and money trapping.
Additionally, thorough inspections will be conducted into dividend distributions among listed companies, with an eye on those that have not given dividends for a substantial amount of time, as well as those that have offered low returns to shareholders.
Wu Qing also says the securities regulator will push listed companies to provide dividends to shareholders, while also cracking down on large shareholders’ illegal or dishonest reductions in holdings.



China to keep market fraud in check, better scrutinise IPOs

Pan Gongsheng says mainland China will firmly support the status of Hong Kong as international financial centre.



Mainland China will support Hong Kong’s status as international financial centre

Central bank governor Pan Gongsheng says China will open up its financial service sector in an orderly manner while welcoming long-term investors in domestic financial markets.
It will also encourage Chinese financial institutions to expand their business overseas, to list in overseas stock exchanges, and to issue bonds abroad.
China’s cashless-society shift is keeping foreign tourists from opening wallets
China’s central bank also vows to address payment barriers faced by senior citizens and foreigners.
It will work with commercial banks to further facilitate payments for overseas visitors, make cash payments more convenient, and streamline mobile payments.



Make payments easier for foreigners, and push banks to go abroad: PBOC

Pan Gongsheng says the central bank will continue to work with US via the bilateral Financial Working Group, but did not elaborate.
Economic and financial working groups were set up in September.


Central bank to continue working with US

Wu Qing, the new China Securities Regulatory Commission chairman, says China should have effective regulation of quant trading - trades which rely heavily on algorithms and mathematical models - to ensure market fairness.
He says the capital market should have a “sense of responsibility” to public investors, and continue to provide value and an expectation of continued growth.



Capital markets need ‘sense of responsibility’

The focus of the 2.5-hour press conference was largely on Wu Qing.
The newly appointed securities watchdog repeatedly fielded questions on how to stabilise the stock market after a rout earlier this year, which had further strained the already fragile investor confidence in the overall economy.
He also reiterated the government’s determination to curb big risks that result in market turbulence.


Stock market queries and weak investor confidence dominate discussion

Minister of Finance Lan Foan says refinancing bills have been used to help high-risk local authorities deal with implicit debt and delayed payments. He says hidden debt risks, both new and existing, will be prevented and resolved.
The monitoring of local implicit government debt will be enhanced, he adds, and the number of local government financing vehicles (LGFVs) - hybrid financing entities that have both public and corporate characteristics - will be reduced.
Lan also says the number of LGFVs has already declined, but he did not provide a current figure.


Finance minister addresses hidden debts

After two and a half hours and 15 questions.

