China's lower GDP growth target anticipates challenges

Significance

However, the government set a conservative real GDP growth target of 5% for the year (compared to average growth of 5.3% over the previous five years) in recognition of a series of upcoming challenges.

Impacts

• Companies in consumer-facing sectors will benefit from the release of pent-up demand in consumer spending in 2023, especially in services.
• Entertainment and leisure, restaurants, hotels, transportation and healthcare will particularly benefit.
• Companies in the financial sector will need to prepare for upcoming regulatory reforms aimed at tackling risks.
• The property sector’s recovery will be slow and growth will not return to historic levels.