China faces a trade-off between confidence and credibility

By Simon Cox

In the spring of 2024 China’s prime minister, Li Qiang, and his colleagues will face an awkward dilemma. They will have to choose between reviving the morale of entrepreneurs or safeguarding the credibility of the ruling Communist Party. Their choice will be revealed in Beijing in March, when Mr Li will read out his first report on the work of the government to China’s legislature. The report will be full of party boilerplate, but it will also contain a consequential number: China’s official economic growth target for 2024.

Such targets are easy to ridicule as a relic of central planning. In today’s China, economic growth is the alchemical result of countless decisions by households, firms and officials. Surely even the party cannot engineer it to within half a percentage point?