Meat & Livestock News

Beijing Opts for Sustainable Economic Growth Over Quick Fixes


  • China aims for a 5% economic growth with a focus on a technology-driven economy, moving away from rapid growth strategies.
  • Consumer confidence remains low, impacting New Zealand exporters, especially in the sheepmeat sector.
  • The Chinese government’s approach includes minor social security increases for pensioners, with no significant stimulus plans announced.

In a strategic shift from its previous growth-at-all-costs approach, the Chinese government is setting its sights on fostering a more sustainable economy. This decision comes with an acceptance of slower growth rates, as outlined by Alistair Crozier, the executive director of the New Zealand China Council. 

During the annual National People’s Congress held earlier this month, China projected an economic growth target of around 5% for the year, with a clear focus on developing a more technology-oriented economy.

This pivot towards sustainability has significant implications for New Zealand, whose key export market is China. The current low consumer confidence in China has notably reduced returns for New Zealand exporters, particularly affecting the sheepmeat industry. The Congress revealed a conservative approach to consumer stimulation, only announcing a slight increase in social security payments to pensioners. 

According to Crozier, this move indicates a departure from dramatic economic boosts, favouring gradual growth through technological advancement and digitisation. This strategy is partly necessitated by restrictions imposed by Western nations on China’s access to high-tech products.

The Chinese housing market’s struggles and the issue of soaring local government debt, both of which have dampened consumer sentiment, are expected to self-correct without significant government intervention. This marks a change from China’s previous tactics of aiding sectors in distress.

The timeline for the return of consumer confidence and spending remains uncertain, with Crozier noting that Chinese consumers are not financially strained but are rather saving and waiting for the economic climate to stabilise.

The Chinese government’s steadfast approach to economic management is aimed at building a stronger, more resilient economy. This strategy requires patience and confidence from both the government and its citizens. Despite the subdued market, there is optimism, as evidenced by Zespri’s recent kiwifruit shipment to China, indicating potential growth in consumer demand, especially in smaller cities.

These tier three and four cities are increasingly seeking high-value imported products, driven by expanding e-commerce and global product awareness.

Crozier emphasises the importance of a diversified market strategy for exporters, suggesting a “China-and” rather than a “China-or” approach. This is crucial for sectors heavily reliant on the Chinese market, encouraging them to explore new markets while acknowledging the complexities of establishing new supply channels.

The current economic rebalancing in China underscores the need for adaptability and resilience among exporters, as they navigate the evolving landscape of international trade.