According to a government work report released on the first day of theNational People’s Congress (NPC), China has set a modest goal for economic growth this year of approximately 5%.
China’s legislature launched a session on Sunday that would tighten President Xi Jinping’s grip over industry and society, while the administration revealed plans for a consumer-led resurgence of the faltering economy.
This year’s growth goal was set by Premier Li Keqiang at “about 5%” after anti-virus regulations were lifted, which had kept millions Chinese people at home and sparked protests. Weakest expansion since at least the 1970s, the world’s second biggest economy grew by just 3% last year.
In a speech on government plans given at the Great Hall of the People in downtown Beijing, Li declared, “We should give priority to the recovery and development of consumption.” This was in front of the ceremonial National People’s Congress.
While the annual conference of the NPC’s 2,977 members receives the most media attention, the NPC’s role is confined to supporting choices made by the governing Communist Party and displaying official projects.
Weak global demand for exports, ongoing U.S. tariff rises in a conflict over technology and security, and restrictions on access to Western processor chips owing to security worries are just a few of the obstacles Xi’s new leadership team will confront.
The People’s Liberation Army, the military component of the governing party, had its budget grow for the 29th consecutive year, up 7.2% to 1.55 trillion yuan ($224 billion). China spends more on its military than any other country in the world, second only to the United States. According to the Stockholm International Peace Research Center, the two nations are responsible for 50% of all military spending worldwide.
The report by Li advocated for a rise in consumer spending through improving family incomes, but he offered no specifics in his unusually short 53-minute address. It was much shorter than annual reports from prior years.
During the December meeting of the governing party’s economic planning committee, Xi highlighted the need of calming the fears of consumers and business owners so that they would spend and invest.
Since assuming office in 2012, Xi has pushed for the governing party to have an even greater influence on the country. For the party to fulfil its “basic goal” and restore the great Chinese country, he says it must once again take the reins of China’s economy, society, and culture.
Xi has tightened control over Hong Kong and the rest of China by silencing critics, increasing censorship, and controlling the flow of information.
With anti-monopoly and data security crackdowns, Xi’s government has tightened control over e-commerce and other Internet businesses, wiping billions of dollars off their stock market worth.
The government in Beijing is pressuring them to fund social programmes and fund research and development for computer chips and other technologies. There have been fears that this may slow economic growth. A study by Li on Sunday highlighted the significance of state industry. It said that the government will “improve the core competitiveness” of state-owned enterprises that are dominant in areas ranging from banking and energy to telecommunications and steel, while also promising assistance to entrepreneurs who create employment and riches.
Spending by consumers is on the mend, but this year’s economic growth might be as low as 4.4%, according to the International Monetary Fund and some private sector predictions.
In February, a gauge of manufacturing activity hit a nine-year high. The number of people using the subway system and the quantity of express packages delivered both increased.
An official from the country’s central bank said on Friday that the housing market is on the mend and that loans for new construction and house purchases are on the rise.
As opposed to a recovery spurred by government stimulus or a surge in real estate investment, one based on consumer spending is likely to be more slow. Nonetheless, Chinese policymakers are working to foster self-sustaining development based on consumption rather than exports or investment in an effort to prevent a resurgence in the country’s debt levels.
If attained, the official growth forecast represents an increase over the previous year but a significant slowing from the 8.1% seen in 2021.
China’s car and consumer goods sales, as well as demand for imported oil, food, and other items, all suffered as a result of last year’s worldwide economic downturn. Auto sales dropped by double digits in January, and overall retail sales were down as well, despite the lifting of anti-virus restrictions. Tighter governmental regulations have stifled enterprise and intimidated international firms.
It was reported last year by foreign business organisations that investment plans were being shifted away from China as a result of travel restrictions preventing executives from visiting the country.
