Chinese Premier Li Qiang (李強) yesterday announced an ambitious economic growth target of about 5 percent for this year, promising steps to transform the nation’s development model and defuse risks fueled by bankrupt property developers and indebted cities.
Li was delivering his maiden work report at the annual meeting of the National People’s Congress, China’s rubber-stamp parliament.
In setting a growth target similar to last year, which would be harder to reach as a post-COVID-19 pandemic recovery is losing steam, Beijing signals it is prioritizing growth over any reforms even as Li pledged bold new policies, analysts said.
Photo: AFP
“It’s more difficult to achieve 5 percent this year than last year because the base number has become higher, indicating that the top leaders are committed to supporting economic growth,” Soochow Securities chief macro analyst Tao Chuan said.
Last year’s uneven growth laid bare China’s deep structural imbalances, from weak household consumption to increasingly lower returns on investment, prompting calls for a new growth model.
China started the year with a stock market rout and deflation at levels unseen since the global financial crisis of 2008-2009. The property crisis and local government debt woes persisted, increasing pressure on China’s leaders to come up with new economic policies.
“We should not lose sight of worst-case scenarios,” Li said in the Great Hall of the People in Tiananmen Square.
“We must push ahead with transforming the growth model, making structural adjustments, improving quality and enhancing performance,” he said.
However, there was no timeline or concrete details for the structural changes China intended to implement, with Li also emphasizing stability as “the basis for everything we do.”
Li acknowledged that reaching the target “will not be easy,” adding a “proactive” fiscal stance and “prudent” monetary policy was needed.
The target considers “the need to boost employment and incomes and prevent and defuse risks,” he said.
The IMF projects China’s growth at 4.6 percent for this year, declining toward 3.5 percent in 2028.
Adding to the challenges, the 3 percent inflation target announced at the National People’s Congress means the country is aiming for nominal growth of about 8 percent again this year.
In reality, China is battling the longest period of deflation since the late 1990s, meaning the economy only expanded 4.6 percent last year, before adjusting for inflation. With prices still falling, a strong expansion would be hard to achieve.
Additional reporting by Bloomberg
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat