China sets modest growth target of around 5% as parliament opens

By Thomas Peter and Kevin Yao

BEIJING, March 5 (Reuters) – China has set a modest economic growth target for this year of around 5 percent, according to a government work report at the start of the annual session of the National People’s Congress. (APN) Sunday. ), which will launch the biggest government reshuffle in a decade.

In a document, outgoing Premier Li Keqiang said it was essential to prioritize economic stability, setting the goal of creating some 12 million urban jobs this year, against the target of at least 11 million from last year.

China’s gross domestic product (GDP) grew just 3% last year, one of its worst results in decades, weighed down by three years of COVID-19 restrictions, the crisis of its large real estate sector, repression of private companies and weakening demand for Chinese exports.

Li set a budget deficit target of 3.0 percent of GDP, down from 2.8 percent last year.

“La inflation mundial sigue siendo alta, el crecimiento económico y comercial mundial está perdiendo fuelle, y los intentionos externos de reprimir y contener a China están intensificando”, dijo Li Durante su discurso de apertura en el Parlamento, que se prolongará hasta el 13 Of March.

“Inland, the foundations for stable growth need to be consolidated, insufficient demand remains an acute problem and the expectations of private investors and companies are unstable,” he said.

This year’s target of around 5% is on the lower end of expectations. Political sources had recently told Reuters that a range of up to 6% could be set, and the target is lower than last year, around 5.5%.

Alfredo Montufar-Helu, director of the Beijing-based Conference Board’s China Center, said setting a higher growth target would have required massive stimulus and “exacerbated the structural imbalances that China is trying to address to meet its growth targets. “. .”

The lower target is more within reach, he said, and “recognizes that the Chinese economy will face significant headwinds this year.”

China’s state planner said his goal was to raise the incomes of low-income people and bring more people into the middle-income group, for which he announced consumption stimuli, although he refrained from offering direct expenses, such as cash distributions.

To revive growth, the government plans to continue its infrastructure spending line, boosting funding for major projects with 3.8 trillion yuan ($550 billion) in local government special bonds, up from 3.65 trillion yuan last year. .

Li, 67, and a group of more reformist politicians will step down during the congress, making way for those loyal to President Xi Jinping, who has further tightened his grip on power by securing an unprecedented third term in Congress. . To party.

At the assembly, former Shanghai party leader Li Qiang, 63, an ally of Xi, is expected to be confirmed as prime minister, tasked with revitalizing the world’s second-largest economy.

Parliament will also discuss Xi’s plans for an “intensive” and “far-reaching” reorganization of state and Communist Party entities, media reported Tuesday. Analysts expect greater Communist Party penetration into state organizations.

INCREASE IN MILITARY SPENDING

Li said the Chinese military should devote more energy to training under combat conditions and increase combat readiness.

The budget includes a 7.2% increase in defense spending this year, slightly higher than last year’s budget increase of 7.1%, and again higher than projected GDP growth.

On Taiwan, Li took a moderate tone, saying China should promote the harmonious development of cross-strait relations and push forward China’s “peaceful reunification” process, but also take resolute measures to oppose to the independence of Taiwan.

Beijing faces multiple challenges, including increasingly strained relations with the United States, which tries to block its access to advanced technologies, and a deteriorating demographic outlook, with birth rates and a population in fell last year for the first time since the 1961 famine.

China plans to reduce childbirth, childcare and education costs, and will actively respond to population aging and declining fertility, the state planner said in the report. activity published on Sunday.

The NPC opened on a day of smog and tight security in the Chinese capital, with 2,948 delegates gathering in the 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 the institutions of the State Council, or cabinet, and decide on its new composition for the next five years, according to the agenda of the meeting.

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(Additional reporting from the Beijing Newsroom; edited in Spanish by Javier López de Lérida)