The National People’s Congress (NPC) inaugural session is attended by Chinese President Xi Jinping and other top officials in Beijing’s Great Hall of the People.
On Sunday, March 5, China announced one of its weakest economic growth objectives in recent memory as the National People’s Congress (NPC) convened its annual parliamentary session and began laying the groundwork for the biggest shake-up of the political system in recent memory.
In an opening report, the Chinese government stated that it will strive for economic growth of “about 5%” for the upcoming year, one of its weakest in decades.
The economy was pressured by the effects of severe COVID-19 containment efforts and the real estate crisis, and China’s annual growth rate of just 3% fell far short of its declared goal of roughly 5.5 percent.
Premier Li Keqiang, who is leaving office, emphasised in his work report the importance of economic stability and rising consumption, and he set a goal to increase the number of urban jobs created this year from the previous aim of at least 11 million to about 12 million.
Li increased the target for the budget deficit from the previous year’s target of 2.8% of GDP to 3%.
Li opened the parliament, which will be in session through March 13, saying, “We should give primacy to the recovery and expansion of consumption.” He spoke for slightly under an hour.
“It’s critical to boost household incomes for both urban and rural residents.”. Spending on major purchases should be stabilised, and a recovery in consumer service consumption should be encouraged “he stated.
As late as last month, policy sources had told Reuters that a range as high as 6% may be set, thus this year’s growth forecast of roughly 5% was below expectations. That falls short of the 5.5 percent goal set for previous year as well.
Despite the official growth target being reduced for the second year in a row, which may surprise the market, we believe investors should focus on the underlying economic momentum to judge the recovery rate,” said Zhou Hao, economist at Guotai Junan International.
COMBAT PREPAREDNESS, “PEACEFUL REUNIFICATION”
The budget included an increase in defence spending of 7.2% this year, which is slightly higher than the anticipated increase of 7.1% from the previous year and again exceeds expectations for GDP growth. Li said China’s armed forces should focus more on combat training and strengthen battle preparedness.
In a study released on the eve of the parliamentary session, the Ministry of Finance estimated that Beijing will spend 1.55 trillion yuan (US$225 billion) on defence this year.
Although the United States has budgeted more than US$800 billion for its military this year, China’s defence spending still falls far short of that country.
On Taiwan, Li adopted a conciliatory stance, stating that China should achieve the “peaceful reunification” of China while still taking steadfast action to prevent Taiwan independence.
Beijing is facing a variety of difficulties, such as deteriorating ties with the United States and a bleak demographic picture, with falling birth rates and a population decline last year firstly since the famine year of 1961.
According to a work report made public on Sunday by the country’s official planner, China intends to reduce the expenditures associated with births, childcare, and education as well as actively combat an ageing population and declining fertility.
Also Read- China sets the lowest economic growth rate of 5% in decades.
