China sets GDP 2024 target of 'around 5%,' plans to issue 'ultra-long' special bonds for major projects

BEIJING — China set a growth target of "around 5%" for 2024 and announced the issuance of "ultra-long" special bonds for major projects, according to a government work report Tuesday.

Premier Li Qiang, who delivered the report, also pledged that China would remove restrictions for foreign investment in manufacturing.

China set a deficit-to-GDP ratio of 3% for the year, down from a rare upward revision to 3.8% late last year from the original 3%.

The work report also said Beijing will issue 1 trillion yuan ($138.9 billion) in "ultra-long" special treasury bonds this year to fund major projects aligned with national strategies, while 3.9 trillion yuan of special-purpose bonds for local governments will be issued this year, 100 billion yuan more than last year.

"We should appropriately enhance the intensity of our proactive fiscal policy and improve its quality and effectiveness," the work report said.

The on-budget deficit excludes special bonds, policy bank bonds and local government financing vehicle debt, according to Louise Loo, lead economist at Oxford Economics, who last week forecast a 3% to 3.5% deficit.

An IMF report earlier this year said its conversations with Chinese officials indicated they viewed last year's fiscal policy as proactive.

"The ultra-long-term special treasury bonds issued on a trial basis will not be included in the deficit, and can be issued at an appropriate time based on market and economic conditions under the trend of moderately increasing leverage of the central government to ensure flexibility," said Bruce Pang, chief economist for the property consultancy JLL, in a CNBC translation of his comments.

"They may gradually replace the issuance of local special bonds to better support the country's