Analysis: Why China Set Its 2023 GDP Growth Target at ‘Around 5%’

China set a GDP growth target of “around 5%” for 2023 earlier this month, which many consider moderate following a low base in 2022 and stronger-than-expected economic activity so far this year. But the country’s new leadership has echoed the cautious tone.

In his first press briefing as premier, Li Qiang told reporters on Monday that achieving the growth target of “around 5%” won’t be easy, as China’s GDP surpassed 120 trillion yuan ($17.8 trillion) last year, which is a high base. Li said that the economy will face new challenges this year.