China is laying out ambitious growth goals for 2024, and even Beijing knows they'll be hard to hit

• Chinese Premier Li Qiang announced a 5% economic growth target for 2024.
• The goal faces headwinds such as a property crisis, deflationary pressure, and a demographic crisis.

China is laying out ambitious growth goals for 2024, and Beijing knows they'll be hard to hit.

China — the world's second-largest economy — is targeting economic growth of about 5% this year, as Premier Li Qiang announced Tuesday. In comparison, China's GDP grew 5.2% in 2023. This was after a brief growth spurt early in the year following the lifting of lockdowns.

It's an ambitious target. The country is battling significant headwinds, including a property crisis, deflationary pressure, and a demographic crisis.

Li acknowledged there were challenges ahead for China while delivering his first work report at the annual meeting of the National People's Congress.

"Achieving this year's expected goals is not easy," said Li, who took office as premier in March 2023. "It requires focused policies, redoubled efforts, and concerted efforts from all parties."

Economists, too, expect the going to be tough for China.

"Achieving the 'around 5%' growth target will be very challenging," Nomura economists wrote in a note on Tuesday.

The economists said the key challenges China was facing were a "still faltering property sector, the crackdown on local-government debt accumulation in 12 high-risk provinces, the likely significant slowdown of investment in the new energy sector, and the lackluster data so far available for January and February."

ING also said the going would be "challenging," with Lynn Song, the Dutch bank's chief economist for Greater China, writing that consumption this year was unlikely to be as strong as it was last year due to weak consumer confidence.

"Trade is unlikely to be a major engine of growth as well, with global trade growth expected to remain below historical averages," particularly amid heightened trade protectionism, Song added.

Economists are watching to see whether Beijing will inject more stimulus into its economy to help it hit its 5% growth target.

Li announced 1 trillion yuan, or $139 billion, of "ultra-long" special central-government bonds to stimulate the economy, but more could be done, the Nomura economists wrote. They suggested boosting central and regional government spending.

As Deutsche Bank's analysts wrote about China's efforts to drive its economy, "the market's big question will be whether they can back up their growth target with enough stimulus."

China and Hong Kong markets don't appear encouraged by Li's announcement.

Hong Kong's Hang Seng Index was down 2.7% at 3:49 p.m. local time on Tuesday. The Hang Seng China Enterprises Index was also 2.7% lower.

China's blue-chip CSI 300 Index edged up 0.7%.