Beijing, March 6 (BNA): China has lowered its annual economic growth target to the lowest level in decades as Beijing struggles to reverse it.
Premier Li Keqiang, the country’s second leader, said in a report to the ceremonial legislature’s annual meeting that the ruling Communist Party will aim for “about 5.5%” growth this year, down from an 8.1% expansion last year. The Associated Press (AP) reported that it had indicated that commodity prices had gone up, but did not say why.
“Achieving this goal will require hard efforts,” Li said during a 55-minute speech at the opening of the National People’s Congress in the Great Hall of the People in central Beijing.
Rising energy costs due to the war have added pressure from anti-coronavirus controls and debt suppression in China’s vast real estate industry which caused economic growth to drop to 4% year-on-year in the last quarter of 2021. Growth forecast for this year by the International Monetary Fund And private analysts as low as 4.3%.
Manufacturing has been disrupted by a “zero tolerance” strategy for COVID-19 that has at times shut down access to some major cities, as well as weak demand for Chinese exports and shortages of power and processor chips. The prime minister gave no indication that Beijing might relax its anti-virus strategy, which has helped keep infection numbers low but at an increasing cost.
Li indirectly acknowledged the impact of the war on oil, wheat and other commodity prices, saying that they “remain high and prone to volatility,” but he did not indicate why.
“All of this makes our external environment increasingly volatile, dangerous and uncertain,” Lee said.
His report focused on the economy, social welfare, and other domestic issues.
The ruling party is trying to steer the world’s second-largest economy toward slower, self-sustaining growth that relies on consumer spending rather than trade and investment, but has been wary of a sudden slowdown in the past year.
The slippage was caused by stricter controls on borrowing by property developers which caused a drop in building and housing sales.
The ruling party leaders responded by announcing a “political pivot” in December toward supporting growth and moving away from long-term initiatives aimed at reducing debt and carbon emissions.
“We must make economic stability our top priority,” he told me. It “should stand out,” he said.
The premier promised to “ensure food and energy security” with adequate supplies of grain and electric power. He said Beijing will intensify exploration for oil, gas and minerals and improve its basic raw materials inventory system.
Lee also promised to combat trafficking in women and children and protect their “legal rights.” The legislature is expected to debate the status of abused women and possible additional protections after the widely publicized case of a woman found chained in a shed in eastern China.
No growth target has been announced in 2020 after much of the economy was shut down to fight the virus. Last year’s target was “more than 6%”. This year is the first time since the 1990s that the official target is below 6%.
The ruling party promised tax cuts to entrepreneurs who generate jobs and wealth. Banks have been asked to lend more. The government injects money into the economy by increasing spending on building public works.
The ruling party promises to build more solar, wind and other renewable energy sources. But it also eased pressure on utilities to limit the growth of climate-changing carbon emissions by burning less coal.
Li said energy efficiency would be “evaluated with appropriate flexibility”.
Turning to COVID-19, Li said China needed to “constantly improve epidemic containment” but offered no indication that Beijing might relax its “zero tolerance” strategy. He called for accelerating vaccine development and “strengthening epidemic control” in cities where travelers and goods arrive from abroad.
All delegates attending the opening session of the legislature wore face masks. The meeting, which usually lasts two weeks, has been scaled back to one week again this year due to the pandemic.
On Saturday, the government also announced a 7.1% increase in its military budget, up from 6.8% last year. China has the second highest military budget in the world after the United States and is investing in long-range, nuclear-capable missiles and other weapons to expand its power beyond its shores.
Lee reiterated the ruling party’s insistence that Hong Kong “should be governed by patriots”, a key component of a campaign to crush pro-democracy activism in the former British colony.
The prime minister did not indicate any change in attitude towards Taiwan, the democratic island that Beijing claims as part of its territory and has threatened to invade. The two sides have ruled separately since they split in 1949 after a civil war, but they have billions of dollars in trade and investment ties.
Li said Beijing would “advance the peaceful development of relations across the Taiwan Strait and the reunification of China.” “We firmly oppose any separatist activities seeking ‘Taiwan independence’ and firmly oppose foreign interference.”
MI