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 —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
THUGGISH BEHAVIOR: Encouraging people to report independence supporters is another intimidation tactic that threatens cross-strait peace, the state department said China setting up an online system for reporting “Taiwanese independence” advocates is an “irresponsible and reprehensible” act, a US government spokesperson said on Friday. “China’s call for private individuals to report on alleged ‘persecution or suppression’ by supposed ‘Taiwan independence henchmen and accomplices’ is irresponsible and reprehensible,” an unnamed US Department of State spokesperson told the Central News Agency in an e-mail. The move is part of Beijing’s “intimidation campaign” against Taiwan and its supporters, and is “threatening free speech around the world, destabilizing the Indo-Pacific region, and deliberately eroding the cross-strait status quo,” the spokesperson said. The Chinese Communist Party’s “threats