By Thomas Peter and Ryan Woo
BEIJING (RockedBuzz via Reuters) – China set a modest target for economic growth this year of around 5% on Sunday, kicking off the annual session of the National People’s Congress (NPC), which is poised to implement as much big change of government in a decade.
China’s gross domestic product (GDP) grew just 3% last year, one of the worst results in decades, squeezed by three years of COVID-19 restrictions, the crisis of its vast real estate sector, the crackdown on private enterprises and weakening demand for Chinese exports.
In his working report, outgoing Premier Li Keqiang stressed the need for economic stability and expanding consumption, setting a target of creating around 12 million urban jobs this year, up from last year’s target. year of at least 11 million, and warned that risks remain in the real estate sector.
Li set a budget deficit target of 3.0% of GDP, broadening the target from about 2.8% last year.
“We should prioritize the recovery and expansion of consumption,” said Li, speaking for just under an hour at a speech opening parliament, which runs until March 13.
“The incomes of urban and rural residents should be boosted through multiple channels. We should stabilize spending on bulk items and promote the recovery of consumer services consumption,” he said.
This year’s growth target of around 5% was below expectations, as policy sources recently told RockedBuzz via Reuters that a range as high as 6% could be set. It’s also lower than last year’s target of about 5.5%.
“While the official growth target was lowered for the second year in a row, which could be a disappointment for the market, we believe investors (should) pay attention to the underlying growth momentum to gauge the pace of the recovery,” he said. said Zhou Hao, an economist at Guotai Junan International.
Li and a slate of more reform-minded economic policy officials will retire during the congress, giving way to loyalist President Xi Jinping, who further tightened his grip on power as he secured a third term of leadership breaking the rules. previous to the Communist Party of October Congress.
During the PNA, the former Shanghai party chief Li Qiang, a longtime ally of Xi, should be confirmed as premier, in charge of reinvigorating the world’s second largest economy.
The rubber stamp parliament will also discuss Xi’s plans for an “intense” and “wide-ranging” reorganization of state entities and the Communist Party, state media reported Tuesday, with analysts expecting further insight into penetration of the Communist Party in state organs.
INCREASE OF THE MILITARY BUDGET
Li said the Chinese military should devote more energy to combat-condition training and increase combat readiness, and the budget included a 7.2 percent increase in defense spending this year, a slightly larger increase compared to the 7.1% increase forecasted last year and again higher than projected GDP growth.
On Taiwan, Li struck a moderate tone, saying that China should promote the peaceful development of cross-strait relations and advance China’s “peaceful reunification” process, but also take resolute measures to oppose Taiwan’s independence.
Beijing faces a number of challenges, including increasingly strained relations with the United States and a worsening demographic outlook, with declining birth rates and a population decline last year for the first time since the 1961 famine year .
China plans to cut costs of childbirth, childcare and education and will actively respond to population aging and declining fertility, the nation’s state planner said in a working report released Sunday.
The PNA opened on a foggy day under conditions of tight security in the Chinese capital, with 2,948 delegates gathered in the cavernous Great Hall of the People on the west side of Tiananmen Square.
During the session, China’s lawmaker will vote on a plan to reform institutions under the State Council, or cabinet, and decide on a new government formation for the next five years, according to an agenda at the meeting.
It is the first PA meeting since China abruptly abandoned its zero-Covid policy in December, following rare nationwide protests. Excluding the pandemic-shortened meetings of the previous three years, this year’s session will be the shortest in at least 40 years, according to NPC Observer, a blog.
(Additional reporting from the Beijing editorial team; Written by Tony Munroe; Edited by Himani Sarkar, William Mallard and Simon Cameron-Moore)