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Two Sessions 2024
EconomyChina Economy

China’s ‘two sessions’ 2024: have new pressures already fractured last year’s economic model?

  • China saw better-than-expected growth in 2023 thanks to emerging industries, but oversupply and likely trade restrictions may foreclose those options
  • Analysts recommend new approach in run-up to top legislative sessions, suggest clear road map for private sector, overseas investors

Reading Time:7 minutes
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With a myriad of challenges threatening sustainable economic recovery for China, questions remain over how they will be addressed and how deep a retooling will be required. Illustration: Lau Ka-kuen
Frank Chenin ShanghaiandHe Huifengin Guangdong
China’s political elite will gather in March for the country’s annual legislative sessions, where plans will be set for the country’s economy, diplomacy, trade and military. In the second part of the series, Frank Chen and He Huifeng examine how Beijing will guide its economy through uncharted waters.
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Though it is typically a time for warmer weather, this spring could bring a chill to China’s previously sizzling industries – particularly new energy – as hopes for a banner year of economic growth may not come to fruition if overcapacity concerns and strained trade relations prove enough of a hindrance.

“Prices began to tumble last year, as demand is not holding up when more products flood the market. Many that were thinking of expansion now have to do the opposite to survive,” said Mark Ma, a senior executive at a medium-sized photovoltaics (PV) component integration company in Guangdong province.

“The average unit price of PV panels has [taken a dive], from 1.8 yuan a year ago to 0.8 yuan (US$0.25 to US$0.11),” Ma said, adding the sector’s already thin margins would likely see a further squeeze this year.

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The ‘two sessions’ – China’s most important political meetings of the year

The ‘two sessions’ – China’s most important political meetings of the year
Despite China gaining a prominent position in the global solar panel and electric vehicle (EV) markets, sentiment has weakened and worries of overinvestment are on the rise. As a result, those industries may not be able to play an outsize role in supporting economic growth – at least, not as much as they did last year.
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This makes sustaining relatively high growth of gross domestic product (GDP) in 2024 a more difficult prospect after last year’s expectation-beating 5.2 per cent rise. It also raises questions over how far Beijing will reach into its toolbox to address other persistent drags on the economy – most prominently, a slump in the property market and deflationary risks – while creating more jobs and spearheading tech innovation.
SCMP Series
China’s ‘Two Sessions’ 2024: what to expect
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