China is on a bold mission to cut ties with the US dollar and expects this move to majorly boost its economy by 2024. The plan? To stabilize foreign trade, ramp up investments, fuel the real economy, and kick consumption up a notch.
They’re rolling out some serious reforms and initiatives to make it happen, according to Li Hui from the National Development and Reform Commission (NDRC). The rest of 2024 looks ripe for these changes to take root and flourish.
Unpacking China’s Big Economic Game Plan
China’s not just looking to give the US dollar a smaller seat at the table — it wants to change the power dynamics in global trade by boosting its own currency, the Yuan. The country is also diving deep into gold, aiming to become the top dog in gold reserves by backing the upcoming BRICS currency with it. This is a strategic move to cement its stance in a future where the dollar’s dominance dims.
Come the end of 2024, China aims to see its economy swell by about 5%. This ambition to decouple from the dollar is a tough climb but doable. Currently sitting as one of the world’s top three economies, China has its eyes set on the top spot, challenging the dollar directly. The folks at Goldman Sachs are nodding in agreement, predicting a 5% growth in China’s GDP for 2024.
On the tech and trade front, China is all about leveling up its gear and swapping old consumer goods for new. The government is pushing for an upgrade in how consumer products are exchanged and hoping to boost self-reliance in technology.
Strategic Partnerships and Economic Forecasts
Teaming up with Russia, China is pushing the Yuan and Ruble over the dollar for trading between the two. This move is part of a broader strategy to promote multiple major currencies, diminishing the dollar’s role on the global stage.
Back in Beijing, the sentiment is optimistic. The Chinese economy is seen as stable and on an upward trajectory throughout 2024, with a series of major reforms on the horizon aimed at strengthening the real economy and spurring consumption.
During a recent economic roundtable, Li Hui pointed out that the next three quarters could see substantial industrial upgrades and more openness in their economic policies.
In the first quarter of 2024, China’s GDP jumped by 5.3% to a whopping 29.63 trillion yuan (about $4.17 trillion). That’s a step up from the 5.2% growth seen in both the last quarter of 2023 and the overall growth rate for that year.
Despite the positive outlook, not everything is smooth sailing. The global environment poses severe and uncertain challenges, yet the NDRC’s Liu Sushe sees a silver lining with increasing positive dynamics within China’s economic operations. Still, domestic demand isn’t quite where it needs to be, and overall economic confidence could use a boost.
For the second quarter, the NDRC’s Yuan Da revealed plans to attract and utilize foreign investment more effectively, accelerate equipment updates, and push for greater technological independence.
Goldman Sachs and Citigroup have both recently updated their forecasts for China’s 2024 GDP growth to a solid 5%, reflecting a strong start to the year and confidence in the government’s policy direction.
Citigroup’s Yu Xiangrong highlighted the acceleration of policies to stabilize growth, including major updates to equipment and consumer goods trade-ins, which are part of a broader strategy to improve the business environment and encourage economic openness.
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