China on Sunday, March 4, set an economic growth target of “around 5 percent” for 2023, one of the lowest in decades, as its annual National People’s Congress opened in Beijing. The target was announced in a work report delivered by outgoing Premier Li Keqiang as the rubber-stamp parliament opened at the capital’s Great Hall of the People.
The figure was slightly lower than the average of forecasts of economists surveyed by AFP, who predicted a goal of around 5.3 percent. Li said China would aim to add “around 12 million new urban jobs” this year and bring the urban unemployment rate to around 5.5 percent. He said Beijing would also target a rise in the consumer price index of around three percent.
“China’s economy is staging a steady recovery and demonstrating vast potential and momentum for further growth,” said Li in an hour-long speech punctuated by ripples of applause from thousands of delegates. But he warned that “uncertainties in the external environment are on the rise”, noting high global inflation. Li also said “external attempts to suppress and contain China are escalating”.
China posted just three percent growth last year, missing its stated target of around 5.5 percent by a wide margin as the economy strained under the impact of strict Covid-19 containment policies and a property crisis. Li said Beijing “should give priority to the recovery and expansion of consumption” and “place a higher priority on promoting the employment of young people, particularly college graduates”.
But he was bullish on the slowdown, saying that “under the strong leadership of the Party Central Committee, we carried out Covid-19 response and pursued economic and social development in an effective and well-coordinated way”. “Overcoming great difficulties and challenges, we succeeded in maintaining overall stable economic performance,” he said. “Such achievements are a testament to the tremendous resilience of China’s economy.”
Zhiwei Zhang from Pinpoint Asset Management said: “The growth target came in at the low end of the market expectation. “But it should be taken as a floor of growth the government is willing to tolerate. Indeed given the very low base of economic activities last year, it is unlikely to see growth drop below 5 percent.”
‘Escalating’ threats from abroad
Meanwhile, China announced an increase in its military spending of 7.2% while warning of “escalating” threats from abroad. Slightly up from last year’s 7.1% rate of increase, it will mark the eighth consecutive year of single-digit percentage point increases in what is now the world’s second-largest military budget.
As the country unveiled the 1.55 trillion yuan ($225 billion) budget, outgoing Premier Li Keqiang told delegates to the National People’s Congress (NPC) that “external attempts to suppress and contain China are escalating”. “The armed forces should intensify military training and preparedness across the board,” he said. The military, he added, must “devote greater energy to training under combat conditions, and… strengthen military work in all directions and domains”.
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China’s defense spending still pales in comparison with the United States, which has allotted over $800 billion for its military this year, but analysts have said much more money is spent than the officially announced sums.