People’s Congress in China: Beijing lowers growth target to record low

The National People’s Congress has started in China. Even if the Ukraine war is not mentioned there, it could indirectly play a role – with a view to China’s economic plan and the planned connection of Taiwan.

China’s economy is expected to grow by 5.5 percent this year. The state and party leadership announced this goal at the beginning of the National People’s Congress in Beijing. It is the lowest growth target for around 30 years.

China sees itself exposed to increasing external pressure, said Premier Li Keqiang in his speech to almost 2,800 delegates in the Great Hall of the People. It will take hard efforts to achieve this goal, said the head of government.

China’s economy grew by 8.1 percent last year. The war in Ukraine, sanctions against Russia and rising commodity prices are dampening growth expectations worldwide. However, the Chinese prime minister did not say a word about the Russian war of aggression.

China wants better protection against sanctions

The events in Ukraine as a result of the Russian invasion are likely to play a role in the People’s Congress, at least indirectly. Jacob Gunter from the Berlin-based China think tank MERICS does not expect any fundamental changes to the planned course of the People’s Congress. Nevertheless, certain decisions are likely to be adjusted, for example with regard to economic stimulus packages.

Damage to the economy is expected worldwide due to the war against Ukraine. In the long term, China would like to protect itself better against sanctions and other external influences, would like to strengthen the domestic economy and thus become less dependent on exports – but also on imports – for example high technology.

“In the areas in which Russia now sees itself exposed to sanctions, China will be better prepared. For example, CIPS, the Chinese alternative to the international payment system SWIFT, will be further expanded,” said Gunter. “But that will also affect important technologies. One of the first sanctions against Russia was an import ban on microchips that can be used for the defense industry. That is a major concern for China.”

Connecting Taiwan is the most important goal

In his speech, Li Keqiang reiterated the call for unification with the democratically ruled island of Taiwan. The communist government regards the democratically governed island as a separate part of the country and regularly threatens a military invasion.

The head of state and party leader Xi Jinping has listed Taiwan’s union as one of his most important goals. “Late last year, the party presented a new Taiwan strategy. This is important and directly linked to Xi Jinping’s future role,” says Chinese political scientist Wu Qiang. In the fall, Xi wants to be confirmed for another term at a party conference.

Military, prosperity, women’s rights

At the congress, the state and party leaders also announced that spending on the military would be increased significantly – by 7.1 percent to the equivalent of 210 billion euros this year. Worldwide, only the US spends more money on its military.

In addition, it will also be about prosperity for all, a core topic of state and party leader Xi Jinping. Other topics: strengthening women’s rights, limiting the power of large corporations and ways out of China’s strict zero-Covid strategy.

In addition to the presentation of the political guidelines, numerous laws will also be passed in the coming days. The non-democratically elected members traditionally agree to whatever the state and party leaders put before them. Much of what is discussed and decided only becomes public during or after the multi-day meeting. Many meetings take place behind closed doors. The National People’s Congress meets once a year, this year for just under a week.