China stocks saw mixed results on Tuesday following the government’s announcement of a 5% economic growth target for this year. Economists have voiced concerns that achieving this goal may be challenging. Premier Li Quang revealed the ambitious target at the government’s annual legislative session, aiming to match the 2023 goal. The economy had experienced a growth of 5.2% last year, with the International Monetary Fund forecasting a 4.6% expansion in 2024.
Various Interpretations of the New Target
The newly unveiled economic target has sparked different interpretations. It could signify the government’s determination to revive the country from its real-estate downturn through increased stimulus measures. Conversely, it might suggest that officials are underestimating the complexities of the task at hand, especially since government spending targets have been reduced compared to the previous year.
Market Response
Despite the announcement, China stocks did not receive a significant boost. While the Shanghai Composite stock index closed 0.3% higher on Tuesday, the Hang Seng in Hong Kong experienced a decline of 2.6%. Companies such as Alibaba and BYD faced reductions in their stock prices, with Alibaba witnessing a 3.3% dip and BYD retracting by 0.8%. JD.com was notably impacted, falling by 7.5%.
