China confidence shows as 6pc growth target tipped

China is likely to set its 2023 economic growth target at up to 6 percent, in a bid to boost investor and consumer confidence and build on a promising post-pandemic recovery, sources said.

The Chinese government is also set to unveil more stimulus measures during this month's National People's Congress, some sources said. But this claim contradicted other reports that suggested the government is in no rush to provide any new stimulus steps thanks to a better-than-expected economic recovery.

To spur growth, the government is expected to widen its annual budget deficit to around 3 percent of gross domestic product this year and issue about 4 trillion yuan (HK$4.55 trillion) in special bonds to support investment spending, sources said.

The new economic leadership team - expected to be led by former Shanghai Communist Party chief Li Qiang as China's new premier - is keen to show their ability to deliver better economic growth, create more jobs and ease funding strains on local governments.

Meanwhile, Bloomberg reported that China will be restrained in rolling out new stimulus measures this year as the country's economy is recovering faster than top officials had expected with the country's Covid outbreak upon reopening having passed rapidly.

The coronavirus outbreak was expected to last at least until March but hit its peak at the end of January, allowing parts of the economy to recover quickly.

In another sign of China's growing comfort with the pace of its recovery, the country's state media have been told to convey at the NPC that leaders are satisfied with how the rebound is playing out and the need for stimulus is moderate for now, sources said.

The government is looking to "hold up" the economy rather than provide extra support, the sources added.

Key data released this week backed up the view that the economy is recovering strongly, with the manufacturing activity expanding at its fastest pace in more than a decade in February.

In money markets, the onshore yuan weakened to 6.9086 per US dollar yesterday as the greenback strengthens after a sharp rise on Wednesday.