BEIJING – Chinese Premier Li Keqiang on Saturday announced a goal to expand the country’s economy by “about 5.5 percent” this year, signaling the government’s emphasis on stabilizing growth in the face of global insecurity from the pandemic and war in Ukraine.
In his annual political speech at the opening of a week-long session of the Communist Party-controlled Chinese legislature in Beijing, Prime Minister Li set out the goal. The goal seems to be aimed at maintaining political and economic stability, as Xi Jinping, the Chinese leader, hopes to secure another five-year term in office at a party meeting this fall.
“In our work this year, we must make economic stability our top priority and pursue progress while ensuring stability,” Mr Lee said.
The growth goal implies that China values economic growth more than trying to rebalance production. Beijing is trying with limited success to shift the economy from a dependence on debt-driven infrastructure investment to a more sustainable dependence on domestic consumption.
Mr Li acknowledged that China’s economy will face challenges this year, citing a slow recovery in consumption and investment, marked growth in exports and a shortage of resources and raw materials.
Western economists predict that China’s economy could grow by 5 percent only by further increasing already heavy loans and spending.
Mr Lee issued a government budget for this year, which required additional spending, plus the issuance of more bonds to pay for.
The central government, which has relatively low debt, will increase its remittances by 18 percent this year to provincial and local governments, many of which are heavily indebted. In contrast, last year’s increase was only 7.8 percent. Provincial and local governments account for much of China’s social spending and infrastructure.
The budget also includes large expenditures to support rural families and to build more rental housing, as well as further strong growth in military spending.
The stimulus plan comes amid growing signs of a slowdown in China’s economy. Ongoing blockages and travel restrictions to prevent the spread of the coronavirus epidemic have caused a drop in hotel and restaurant costs.
China’s vast construction industry is shutting down as homebuyers become wary and developers begin to pay off debts. Declining revenues from land sales have prompted some local authorities to be more cautious in building additional roads and bridges.
In January, the government said last year’s growth was 8.1 per cent. But in the last three months of last year, the economy grew by only 4 percent.
The Chinese prime minister’s annual work reports usually avoid new foreign policy announcements, and this year’s report was no exception. Mr Lee did not even mention Russia’s invasion of Ukraine. The Chinese government is seeking to maintain its partnership with Russia, while trying to distance Beijing from President Vladimir Putin’s decision to go to war.
“China will continue to pursue an independent foreign policy of peace, will remain on the path of peaceful development, will work for a new type of international relations,” Li said in his report.
But Mr Li also said there would be no delay in China’s efforts to modernize and overhaul its military, saying the government “will move faster to modernize military logistics and management systems. assets and will build a modern weapons and equipment management system. “
Keith Bradsher reports from Beijing and Chris Buckley from Sydney. Li Yu, Liu Yi and Claire Fu contributed to the study.