Beijing has pledged to make domestic demand a major economic driver as an expansion of the trade war with US exports.
China has set an annual growth target of “about 5%” and has pledged to domestic demand as a major economic factor as an escalating trade war with US hit exports.
Headline growth figures released by Prime Minister Li Qiang at the annual Communist Party Conclave on Wednesday also include rare increases in fiscal funds, allowing China’s fiscal deficit to reach 4% this year as it fights youth uttering, low consumer demand and the debt crisis in the real estate sector.
Under the plan, around 12 million new jobs will be created in Chinese cities as Beijing drives 2% inflation this year.
“The ratio of the fiscal deficit from 3% to 4% doesn’t seem to be that big, but that’s the highest set in 30 years. So the government is committed to spending more money,” said Al Jazeera’s Katrina Yu, reporting from Beijing.
The Chinese government also pledged to make domestic demand a “major engine and anchor” of growth, adding that Beijing should “moves quickly to deal with insufficient domestic demand, particularly insufficient consumption.”
In a rare move, Li said China will lower its fiscal deficit by 1 percentage point.
Taking close to 3,000 members of the National People’s Assembly, Li acknowledged both international and national challenges in her 55-minute talk.
“A more and more complex and serious external environment can have a major impact on China in areas such as trade, science and technology,” the 32-page report states.
“Domestically, China’s foundation for sustained economic recovery and growth is not strong enough. Effective demand is weak, especially consumption.”
Defense budget hiked
China also said in its draft budget that defence spending will increase by 7.2% this year as it rapidly modernizes its troops this year in the face of regional tensions and strategic competition with the US.
Since Xi Jinping became president and commander more than a decade ago, China’s defense budget has swelled from 720 billion yuan in 2013 to 1.78 trillion yuan ($245 billion) this year.
“President Xi Jinping has made it very clear that he wants to modernize the Chinese army by 2035, and much of that money will be spent on military technology, better missiles, better submarines and missile surveillance technology,” said Al Jazeera’s Katrina Yu.
At the same time, the Chinese military is seeking to improve combat readiness through more stringent training and training. Official reports show that many of them include Taiwan’s scenarios and territorial claims in the South China Sea.
Although Beijing considers part of Taiwan’s territory, the Pacific Island has had an independent government since 1949. XI has repeatedly said it doesn’t want to postpone unification indefinitely and will use its strength if necessary.
China is the world’s second largest military Spender after the United States, which proposed the 2025 military budget, at $850 billion.