China Sets Modest 2023 Economic Growth Target of “Around 5%” at NPC Meeting
On Sunday, the National People's Congress (NPC) kicked off with Chinese Premier Li Keqiang delivering an address to set the stage for the country's 2023 economic growth target. Li announced a cautious forecast of “around 5%” in the face of a pandemic-hit economy that posted one of its weakest expansions in decades.
The 7.2% increase in planned defense spending marks the first time in the past decade that the budget growth rate has increased for three consecutive years, as Beijing continues to modernize and build-up its military, while asserting pressure on Taiwan. The government's annual military budget is 1.55 trillion yuan ($224 billion), which is more than double what it was ten years ago.
Li also spoke of the need to boost private sector confidence in the wake of the reshuffling of the government. “This is more important than the fiscal and monetary policies, in my view,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management Ltd.
Overall, the economic recovery is expected to be modest, with the median forecast for growth at 5.3%, according to economists surveyed by Bloomberg. Analysts generally expected China to set a GDP target of above 5%.
The Two Sessions, which includes the NPC meeting and a gathering of China's highest political advisory body, is an important annual political event. It is at this event that the government's main achievements of the past year and plans for the next are outlined, setting the stage for the 2023 growth target. With the nation's top leaders avoiding any large stimulus to boost the recovery, the modest growth target of around 5% will be a challenge to meet.
0. “Pushing for a post-COVID rebound, China targets GDP growth of “around 5%” this year” NPR, 5 Mar. 2023, https://www.npr.org/2023/03/05/1161180754/pushing-for-a-post-covid-rebound-china-targets-gdp-growth-of-around-5-this-year
1. “China to increase defense spending 7.2%, sets economic growth target of ‘around 5%' for 2023” WENY-TV, 5 Mar. 2023, https://www.weny.com/story/48494229/china-to-increase-defense-spending-72-sets-economic-growth-target-of-around-5-for-2023
2. “Why China's GDP Growth Target in 2023 Needs Less Stimulus” Bloomberg, 5 Mar. 2023, https://www.bloomberg.com/news/articles/2023-03-05/china-sets-modest-growth-target-as-economic-risks-persist
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