Asian Development Bank (ADB) chief economist Albert Park said that the Chinese economy can achieve its growth target for the current year (about 5%), but the government should pay special attention to problems such as property risks and economic imbalances.
"We continue to see pretty significant negative investment growth and property prices actually declining pretty steadily," Park said, adding that China will have relatively low productivity growth despite its industrial policy push.
The latest data signaled the stabilization of China's economy, but growth is still being held back by ongoing instability in the real estate market.
Today, Citi economists improved their forecast for China's GDP growth for 2024 by 0.4%, to 5.0%, citing recent improved delivery policy and optimistic data on consumption and investment. Economists also pointed to signs of stabilization in the real estate sector. "If the real estate sector stabilizes at a low level, this will ease pressure on the economy and help restore household confidence," Citi said, but warned that factors such as a prolonged downturn in the real estate market, higher-than-expected capacity cuts with the return of energy intensity targets, tighter restrictions on local government debt, obstacles to exports and new protectionism.