China's 5% GDP goal is 'attainable' but it won't be easy, says Hong Kong's financial secretary

China’s GDP target of 5% for 2024 is possible, but it won’t be easy to achieve, Hong Kong’s financial secretary told CNBC Tuesday after Beijing set a growth target of “around 5%” for this year.

At its annual parliamentary meeting which kicked off Tuesday, China also 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%.

“China is a huge economy, given its size, 5% is a huge amount. I think this is attainable, although it’s not easy,” Hong Kong’s Financial Secretary Paul Chan told CNBC’s Emily Chan, highlighting bright spots in China’s export sector and domestic consumption.

“ASEAN in particular is growing very fast, and the population is young. So this represents also a huge market for China’s export,” Chan said, adding that “we expect the export situation of the mainland will improve particularly into developing Asia.”

China’s trade with its major partners fell in 2023, with annual exports dipping for the first time in seven years as demand for Chinese goods fell amid slowing global growth.

The 10-member Association of Southeast Asian Nations grouping was China’s largest trading partner on a regional basis in 2023, although it reportedly logged a 4.9% decline.

By country, the U.S. remained China’s largest trading partner last year.

“In addition, China is trying very hard to stimulate domestic consumption, this will be the major engine of growth as well,” Chan said.

At the start of the year, Goldman Sachs said it expects Chinese consumer activity to bounce back in 2024, led by leisure-related activities from online travel agents to Macao casinos.

Last year, China’s economy grew 5.2% year-on-year, in line with the official target of around 5%. Still, the overall recovery from the pandemic was much slower than many expected.

Despite external uncertainties and geopolitical landscape, Chan said he expects the Hong Kong economy to “grow further” this year, on the back of a recovery in global demand as markets widely project a cut in interest rates. Domestic consumption is also a key driver for the city’s growth in the short term, said the financial secretary.

“Our consumption will continue to grow with the improvement in the connectivity and transport facilities with the mainland and the international,” he said.

Hong Kong’s GDP is projected to grow 2.5% to 3.5% this year.