For the second consecutive year, the growth target for China remained at lowest since 1992. The country’s defence budget is expected to grow by 8.1% this year to 1.11 trillion yuan or $175 billion, up from 7% in 2017.
China on Monday set its economic growth forecast for 2018 at “around 6.5%” in a bid to maintain financial stability amid worries over rising debt and unveiled its largest rise in defence spending in three years.
For the second consecutive year, the closely-watched growth target for the world’s second largest economy remained at lowest since 1992 when China grew at 6%.
China’s economic growth rate – which continues to be among the highest in the world – has slowed down in recent years by falling demand for its goods across the world and overcapacity in its manufacturing and steel sectors.
But the focus of China’s growth is on quality and not on quantity anymore, experts said.
“While growth handily surpassed 2017’s target with a 6.9% expansion that was the first acceleration since 2010, economists forecast a moderation to 6.5% this year amid the ongoing deleveraging drive and trade tensions with the Trump administration,” a Bloomberg report said on the growth forecast.
China’s defence budget—the world’s second-largest defence outlay behind the US though by a large margin —meanwhile is expected to grow by 8.1% this year to 1.11 trillion yuan or $175 billion, up from 7% in 2017.
China’s defence budget now stands at more than three times that of India’s.
The official media said the increase though higher than the last two years, continues to be in single digits since 2013, following an increase of 7.6% in 2016 and 7% in 2017.
The announcement of China’s expenditure on defence is closely followed as an indicator of its strategic intent as Beijing expands its influence worldwide. The defence outlay is particularly important for several of its neighbours – including India – with whom China has territorial disputes.
It is also widely believed that China’s actual spending on defence exceeds the allocation that is made public.
In 2017, China increased its defence budget by 7%, the lowest increase in seven years and second year in a row in which the hike was below the double digit mark. In real terms, the defence budget of the world’s largest armed forces, the People’s Liberation Army (PLA) last year was around $ 146 billion-mark, a quarter of the US defence outlay.
The important targets for China was released ahead of Premier Li Keqiang delivered the government work report on Monday on the first day of the annual session of the National People’s Congress (NPC), the legislature.
The session, which is expected to run for about two weeks, will finalise the way for President Xi Jinping to govern China beyond his stipulated two terms by removing the two-term presidential term limit in the country’s Constitution.
The proposal to remove the two-term limit triggered criticism both within China and abroad amid fear that Xi – China’s most powerful leader in decades – is deliberately building a cult of personality and power around him on the lines of Mao Zedong.
Sharp focus, however, remains on China’s economic markers with Xi’s government attempting to cut down poverty and pollution .
The work report said that more than 68 million people have been lifted out of poverty in the last five years with Li saying that the government will attempt to lift more people out of rural poverty in the coming years.
Reflecting a boom in outward tourism, the report revealed that “…tourist departures have grown from 83 million to over 130 million”.
The fight against pollution is showing results as well, the work report revealed.
“Both energy and water consumption per unit of GDP have fallen more than 20%, the release of major pollutants has been consistently declining, and the number of days of heavy air pollution in key cities has fallen 50%,” the report said.