China is lowering its economic growth target in a reversal – WAVY.com

BEIJING (AP) – China on Saturday cut its annual economic growth target to its lowest level in decades as Beijing tries to reverse the downturn at a time when Russia’s war with Ukraine is pushing oil prices and worrying the global economy.

The ruling Communist Party will aim for growth of “about 5.5%” this year compared to last year’s growth of 8.1%, said in a report at the annual meeting of its ceremonial legislature, No. 2 leader Premier Li Keqiang. It was noted that commodity prices are rising, but the reason is not named: the attack of a friend of Beijing, Russian President Vladimir Putin.

“Achieving this goal will require hard work,” Lee said during a 55-minute speech at the opening of the National People’s Congress in the House of People’s Assembly in central Beijing.

Rising energy spending due to the war is contributing to pressure from anti-coronavirus control and debt dispersal in China’s vast real estate industry, leading to a drop in economic growth of 4% compared to last year in the last quarter of 2021. This year’s growth forecast for the International Monetary Fund and private sector analysts is only 4.3%.

Production was disrupted by a zero-tolerance strategy for COVID-19, which sometimes suspended access to some major cities, as well as weak demand for Chinese exports and a lack of power and processors. The prime minister gave no indication that Beijing could weaken its anti-virus strategy, which has helped keep the number of infections low but rising in price.

President Xi Jinping’s government has tried to distance itself from Putin’s war by calling for dialogue, but has refused to criticize the attack. Beijing has condemned trade and financial sanctions against Moscow and said Washington was to blame for the conflict.

Lee indirectly acknowledged the impact of the war on oil, wheat and other commodity prices, saying they “remain high and prone to fluctuations”, but did not specify why.

“All of this is making our external environment increasingly unstable, serious and uncertain,” Lee said.

His report focused on the economy, social security and other domestic issues, unlike President Joe Biden’s speech on Tuesday, which highlighted Russia’s attack on Ukraine and international efforts to put pressure on Putin to stop him.

The ruling party is trying to steer the world’s second-largest economy towards slower, self-sustaining growth based on consumer spending rather than trade and investment, but was alarmed by a sharp slowdown last year.

The reduction was caused by tighter controls on loans by developers, which led to a decline in construction and sales of housing.

The ruling party’s leaders responded by announcing “policy turns” in December to support growth and abandon long-term initiatives to reduce debt and carbon emissions.

“We need to make economic stability our top priority,” Lee said. He said it should “take an even more prominent place”.

The prime minister promised to “ensure food and energy security” with sufficient supplies of grain and electricity. He said Beijing is stepping up exploration for oil, gas and minerals and improving its system of raw materials.

Lee also promised to fight trafficking in women and children and protect their “legal rights”. The legislature is expected to discuss the status of women who are being abused and possible additional safeguards following the high-profile case of a woman who was found chained in a barn in eastern China.

No growth target was announced in 2020 after much of the economy was closed to fight the virus. Last year’s target was “more than 6%”. This year, for the first time since the 1990s, the official target is below 6%.

The ruling party has promised tax cuts for entrepreneurs who create jobs and wealth. Banks were told to lend more. The government is introducing money into the economy by increasing the cost of building public works.

The ruling party promises to build more solar, wind and other renewable energy sources. But it has also eased pressure on utilities to curb rising carbon emissions, which are changing the climate by burning less coal.

Energy efficiency will be “assessed with appropriate flexibility,” Lee said.

Addressing COVID-19, Lee said China needed to “continuously improve the containment of the epidemic,” but gave no indication that Beijing could weaken its “zero tolerance” strategy. He called for speeding up vaccine development and “tightening control of the epidemic” in cities where travelers and goods from abroad arrive.

All the delegates who attended the opening session of the legislature were in masks. The meeting, which usually lasts two weeks, this year was again reduced to one week due to a pandemic.

Also on Saturday, the government announced a 7.1% increase in the military budget compared to last year’s 6.8% increase. China has the world’s second largest military budget after the United States and is investing in long-range missiles and other weapons to expand its power beyond its shores.

Lee reaffirmed the ruling party’s insistence that Hong Kong “should be ruled by patriots”, which is a key element of the campaign to reduce democratic activism in the former British colony.

The prime minister has noted no change in attitudes toward Taiwan, an island democracy that Beijing claims its territory and threatens to invade. Both sides have been governed separately since the split in 1949 after the Civil War, but have multibillion-dollar trade and investment ties.

Russia’s invasion of Ukraine has suggested that Beijing may be more likely to use force against Taiwan if it feels a lack of determination from the United States and its allies. The ruling party has offered no signs of changing its generally accepted approach to gaining control of Taiwan by peaceful means, without abandoning the military option.

Beijing will “promote the peaceful development of relations across the Taiwan Strait and the reunification of China,” Lee said. “We strongly oppose any separatist activities that seek Taiwan’s independence, and we strongly oppose foreign interference.”

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AP researcher Henry Howe has contributed.

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