China: here are the economic-political guidelines from Prime Minister Li’s speech
China's top legislative body, the National People's Congress (NPC), opens its session today. Premier Li Qiang presents his first report on the government's work, offering an insight into the central government's economic goals and foreign policy, as well as its approach to social issues, Hong Kong affairs and Taiwan. The speech lasted about an hour.
This year's meeting takes place as concerns about the Chinese economy intensify, after last year's market slides and faltering growth data, and there are many expectations about economic and international political announcements.
Here are the key elements of the speech:
Economy: China is aiming for GDP growth of “around 5%” this year, the same target as last year. Furthermore, he says China hopes to create more than 12 million new jobs in cities, keeping the urban unemployment rate at 5.5% and inflation at 3%. In the fourth quarter of 2023, growth was 5.2% while the country had gone into deflation in the last three months.
Li admits that economic recovery will be difficult after the pandemic and that the external global environment has negatively affected the country's development.
“Compared to last year, a growth target of around 5% is still relatively ambitious, especially given China's tepid post-Covid recovery, real estate challenges, recurring deflation and weakening business confidence and consumers.
“According to Neil Thomas and Jing Qian, of the Center for China Analysis, this target would signal a tactical focus on reviving confidence and spending.
Army and Politics: Says the People's Liberation Army should "strengthen military training and preparedness in all areas." He also announced that the country's military budget will increase by 7.2% and be set at 1.66 trillion yuan ($231.4 billion). In the absence of inflation this is a significant increase.
The President also promises to create a stable, transparent and predictable political environment for businesses and to place emphasis on “communication with the market”. It is also committed to reducing risks and offering greater support to the real estate market.
There is a commitment to issuing special ultra-long-term Treasury bonds, starting with an issuance of 1 trillion yuan this year. This is 128 billion euros not tied to bizarre policies like the various European funds.
Li said China is committed to an independent foreign policy of peace, the path of peaceful development and a win-win opening-up strategy.
Taiwan, Hong Kong and Macao As for Taiwan, the prime minister declared that Beijing will uphold the principle of China's unity and will vigorously fight separatism and foreign interference. There do not appear to be any major changes in this, even if, once the elections have passed, it will be a more stable and foil game. However, there is talk of a peaceful development of relations which, however, will be centered along Party lines, i.e. the prospect of reunification
He said the principle of "patriots administering Hong Kong" must be firmly implemented. He adds that Beijing will continue to support the economic development of Hong Kong and Macao and develop the Greater Bay Area. The government will work for their well-being, but always ensuring that the "Patriots" are at the helm
Conclusions: obviously this is a meeting of the National People's Congress, therefore a legislative body, even multi-party, but whose political components are still closely linked to the PCC. Revolutions were not to be expected, but there are some changes. Both from an economic and international political point of view, there is a greater empiricism and realism.
Obviously the government does not retreat an inch, at least apparently, but the positions seem to be addressed with practicality. However, control over Hong Kong and Macau will remain very tight. Taiwan, once the elections are over, will probably see some détente.
As far as the economy is concerned, we will see a development focused more on the growth of internal consumption and the middle class, or at least this is my impression.
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The article China: here are the economic-political guidelines from Prime Minister Li's speech comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/cina-ecco-le-linee-guida-economico-politiche-dal-discorso-del-primo-ministro-li/ on Tue, 05 Mar 2024 11:33:17 +0000.