China presents its economic objectives for this year

China set an economic growth target for this year of around 5%, according to the government work report, at the start of the annual session of the National People’s Congress (APN), which will launch the largest government reshuffle in a decade.

In a document, outgoing Premier Li Keqiang said it is essential to prioritize economic stability, setting a target of creating 12 million urban jobs this year, up from last year’s target of 11 million.

China’s Gross Domestic Product (GDP) grew only 3% last year, one of its worst results in decades, weighed down by three years of sanitary restrictions due to Covid-19, the crisis in the real estate sector, a repression of private companies and weakening demand for exports.

Li has set a budget deficit target of 3% of GDP from 2.8% last year.

Global inflation remains high, global economic and trade growth is running out of steam, and external attempts to suppress and contain China are intensifying,” Li said during his opening speech in parliament, which runs until March 13.

“In the interior, it is necessary to consolidate the foundations of stable growth, insufficient demand is an acute problem and the expectations of private investors and companies are unstable,” he lamented.

This year’s GDP target is at the lower end of expectations. Political sources recently declared that a range of up to 6% could be set, in addition the goal is lower than last year, which was 5.5 percent.

Alfredo Montufar-Helu, director of the Beijing-based China Center at The Conference Board, said setting a higher growth target requires massive stimulus and “exacerbated the structural imbalances that China is trying to address to meet its development goals.” long-term”.

The lower target is more within reach, he said, and “recognizes that the Chinese economy will face significant hurdles this year.”

To boost growth, the government plans to continue its line of infrastructure spending by financing large projects with 3.8 trillion yuan ($550 billion) in special local government bonds, up from 3.65 trillion last year.

Li and a group of more reformist political officials will step down during the congress, making way for loyalists of President Xi Jinping, who further tightened his grip on power when he secured an unprecedented third term at the Communist Party Congress in October of last year.

During the assembly, former Shanghai party chief Li Qiang, and an ally of Xi, is expected to be confirmed as prime minister, tasked with revitalizing the world’s second-biggest economy.

Parliament will also discuss Xi’s plans for an intensive reshuffle.