© Reuters. Chinese President Xi Jinping, Premier Li Keqiang, National People’s Congress (NPC) Standing Committee Chairman Li Zhanshu and Chinese People’s Political Consultative Conference (CPPCC) Chairman Wang Yang arrive for the inaugural session of the CPPCC in the
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By Thomas Peter and Kevin Yao
BEIJING (Reuters) – China set a modest target for economic growth this year of around 5% on Sunday as it opened the annual session of its National People’s Congress (NPC), which is about to implement the biggest government shakeup ever. in a decade.
The economy had one of its weakest performances in decades last year, when gross domestic product (GDP) grew just 3%, pressured by three years of COVID controls, a crisis in the vast real estate sector and a crackdown on the private company.
In his work report, outgoing Premier Li Keqiang stressed the need for economic stability and expansion of consumption, set a goal of creating about 12 million urban jobs this year, up from last year’s target of at least 11 million, and warned that the risks continue in the future. real estate
Li set a budget deficit target of 3.0% of GDP, surpassing last year’s target of around 2.8%.
“Global inflation remains high, global economic and trade growth is losing steam, and external attempts to suppress and contain China are increasing,” Li said during his opening speech to the parliament, which will last until March 13. .
“At home, the foundation for stable growth needs to be consolidated, insufficient demand remains a pronounced problem and private investor and business expectations are shaky,” he said.
This year’s growth target is at the lower end of expectations, as policy sources had recently told Reuters that a range of up to 6% could be set. It is also below last year’s target of around 5.5%.
Alfredo Montufar-Helu, director of the China Center at the Beijing-based Conference Board, said setting a higher growth target would have required massive stimulus and “exacerbated the structural imbalances that China is trying to address to achieve its growth targets.” long-term development.” .”
The lower target is more achievable, he said, and “recognizes that the Chinese economy will face significant economic headwinds this year.”
China’s state planner said his goal is to increase the income of low-income people and attract more people to the middle-income group. The planner unveiled measures to stimulate consumption, but stopped short of direct spending, such as cash handouts.
To fuel growth, the government plans to stick with its infrastructure spending playbook, increasing funding for large projects with 3.8 trillion yuan ($550 billion) in special local government bonds, versus 3.65 trillion yuan last year.
Li, 67, and a list of more reform-oriented policy officials will retire during the congress, making way for those loyal to President Xi Jinping, who further tightened his grip on power when he secured a precedent-breaking third leadership. . term at the October Communist Party Congress.
During the NPC, former Shanghai party chief Li Qiang, 63, a longtime Xi ally, is expected to be confirmed as prime minister, tasked with revitalizing the world’s second-biggest economy.
The official parliament will also discuss Xi’s plans for an “intensive” and “broad” reorganization of state and Communist Party entities, state media reported Tuesday, with analysts expecting further Communist Party penetration of state bodies.
INCREASE IN THE MILITARY BUDGET
Li said China’s military should devote more energy to training under combat conditions and increasing combat readiness, and the budget included a 7.2 percent increase in defense spending this year, slightly higher than last year’s budgeted 7.1% increase and again exceeding expected GDP growth. .
On Taiwan, Li struck a moderate tone, saying 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 multiple challenges, including increasingly strained relations with the United States, which is trying to block its access to cutting-edge technology, and a worsening demographic outlook, with plummeting birth rates and a declining population. last year for the first time since the famine year of 1961.
China plans to cut the costs of childbirth, childcare and education and will actively respond to an aging population and declining fertility, the nation’s state planner said in a work report published on Sunday.
The NPC opened on a smoggy day amid tight security in the Chinese capital, with 2,948 delegates gathering in the cavernous Great Hall of the People on the west side of Tiananmen Square.
During the session, China’s legislature will vote on a plan to reform institutions under the State Council, or cabinet, and decide on a new cabinet formation for the next five years, according to the meeting’s agenda.
It is the first NPC meeting since China abruptly abandoned its zero-COVID policy in December, following rare protests across the country. 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 the NPC Observer, a blog.
($1 = 6.9048 renminbi)