According to the government’s wishes, China’s economy is expected to grow by around five percent this year. This growth target emerged from Prime Minister Li Qiang’s annual report, which was published on Tuesday (local time) at the start of this year’s session of the Chinese People’s Congress in Beijing. Growth of around five percent had already been targeted in the previous year, which was ultimately slightly exceeded: According to official information from the Beijing Statistics Office, the second largest economy ultimately grew by 5.2 percent.
However, critics fundamentally question the accuracy of Chinese economic data. Nevertheless, the level of the growth target is considered an important yardstick and indicator of the government’s economic policy course. Before the announcement, observers had described a possible growth target of around five percent as quite ambitious. Growth of this magnitude was easier to achieve last year because the economy benefited from catch-up effects after the corona pandemic.
China plans to spend 7.2 percent more on its military in 2024 than in the previous year
Recently, the Chinese economy suffered primarily from weak global demand, the ailing real estate market and weak domestic consumption. The Chinese stock market is under great pressure. Because of the economic crisis in the world’s second largest economy, domestic and foreign companies in particular are likely to be hoping for important signals from the People’s Congress this year.
At the start of the People’s Congress, in addition to the economic target, it was also announced that China plans to spend 7.2 percent more on its military this year than last year. The increase in the defense budget to 1.67 trillion yuan (around 214 billion euros) was revealed in the budget draft. Beijing had already increased its military budget by the same amount last year.
The decision to increase the budget is also likely to be related to the tense relationship with Taiwan, which China considers a breakaway province, and disputed territorial claims in the South China Sea. Experts have not yet expected a war to break out in the strait between China and Taiwan. However, Beijing wants reunification with the island republic – if necessary with military means.
The People’s Republic maintains the largest army in the world in terms of an estimated two million active soldiers. China’s defense budget has grown faster than total spending in recent years. The increase was also mostly above the economic growth rate. However, according to experts, the official military budget only reflects a portion of the true expenditure, as many expenses for the People’s Liberation Army are also covered by other budgets.