China Sets Economic Growth Target at 5% for 2024, Boosts Defense Spending and Expects Inflation to Rise
China has set its economic growth target at “around 5%” for 2024, according to the country’s “Two Sessions” meeting. This announcement has led to a surge in China stocks, with the CSI 300 index reaching its highest level since late November. However, Hong Kong’s Hang Seng index experienced losses, down 2.65%.
In addition to the economic growth target, China plans to increase its defense spending by 7.2% in 2024. This move reflects the country’s commitment to strengthening its military capabilities. Furthermore, China expects the inflation rate to rise to “around 3%,” indicating a potential increase in consumer prices.
Meanwhile, South Korea has released revised GDP figures, revealing that its economy grew by 0.6% in the fourth quarter of 2023. This positive growth indicates stability and resilience in South Korea’s economy. On the other hand, Japan’s capital city of Tokyo witnessed a rebound in inflation from a 22-month low in February.
The stock markets in South Korea and Japan experienced mixed results. South Korea’s Kospi slipped by 0.93%, while Japan’s Nikkei 225 fell marginally but remained above the 40,000 mark. However, Japan’s broad-based Topix index gained 0.5%, reaching a new all-time high.
Taiwan’s weighted index also saw an increase of 0.42%, hitting a record high of 19,386.92. This growth was driven by chipmaker TSMC, which gained 0.69% and reached an all-time high of 730 New Taiwan dollars ($23.11) per share.
In Australia, the S&P/ASX 200 closed 0.15% lower at 7,724.20. The commodities market saw gold futures settle at a record high on Monday, reaching $2,126.30 per ounce. This surge in gold prices is attributed to traders speculating that the Federal Reserve will begin cutting interest rates in the second half of the year.
Despite these regional developments, the U.S. stock market experienced a retreat, with all three major indexes falling from their all-time highs. The S&P 500 and Nasdaq Composite slipped, while the Dow Jones Industrial Average lost 0.25%. Interestingly, technology stocks tied to the artificial intelligence boom saw a rally.
In conclusion, China’s announcement of a 5% economic growth target for 2024, along with increased defense spending and expectations of rising inflation, has had a significant impact on the stock markets. While China stocks surged, Hong Kong’s Hang Seng index experienced losses. South Korea and Japan witnessed mixed results, with South Korea’s economy showing stability and Japan’s stock market remaining above the 40,000 mark. Taiwan’s weighted index reached a record high, driven by the performance of chipmaker TSMC. In Australia, the S&P/ASX 200 closed lower, while gold futures reached a record high due to speculation about future interest rate cuts by the Federal Reserve. The U.S. stock market retreated, despite a rally in technology stocks related to artificial intelligence. These developments highlight the dynamic nature of global markets and the interconnectedness of economies worldwide.