China's annual parliamentary meetings in Beijing came to a close on March 11. They were conducted under great pressure: a weak economy and high expectations from both the domestic public and international observers as to what the government can do to get the economy out of the woods.

The country's leaders did not shy away from mentioning all of the economic problems facing China. But they also attempted to boost the morale of the Chinese public by outlining how the country would march into the next chapter of the Chinese story – mainly by striving to become a global leader in technology.

The government used the meetings to declare that it was targeting GDP growth of 5% in 2024. This is lower than the 5.2% growth rate that was achieved in 2023 but higher than the International Monetary Fund's forecast of 4.6%. The Chinese government did not detail how this target will be achieved, but the target itself is indicative of the leadership's confidence about the future.

Over the past four decades, China's rapid economic growth has been attributed to market incentives, cheap labour, infrastructure investment, exports and foreign direct investment. But at the time of writing, none of these drivers are working effectively.

Market activities are intertwined with greater state intervention. A declining population has weakened the labour supply. And uncertainty surrounding China's economy and intensified geopolitical tensions have together driven foreign investment out of China. By January 2024, inward foreign direct investment in China was less than 10% of the US$344 billion it received in 2021.

Property crisis

Many of the risks facing China's economy stem from its ailing real estate sector. For decades, China's economy was dependent on a booming property market driven by speculative investment returns. However, this growth was largely driven by debt. To maximise their profits, developers even began selling houses before they had been built.

China's economy started to slow and, in 2020, Chinese regulators cracked down on reckless borrowing. Beijing imposed widespread lending curbs on property developers, meaning they could not borrow more money to pay back their existing debts.