China's leaders set 5% growth goal, raise military budget in 2024

Jing Xuan Teng - Agence France-Presse
China's leaders set 5% growth goal, raise military budget in 2024
This handout photo taken and released by the European Council Press Service on December 7, 2023 shows China's President Xi Jinping (R) speaking next to China's Foreign Minister Wang Yi during the 24th EU–China Summit in Beijing.
Dario Pignatelli / European Council Press Service / AFP

BEIJING, China — China will on Tuesday set a goal of 5% gross domestic product (GDP) growth and raise the military budget by over 7% in 2024, an official copy of a government work report seen by AFP showed.

The 5% target would be in line with China's GDP growth last year, one of the country's lowest in decades and a far cry from the double-digit growth that long drove its breakneck development in the nineties and 2000s.

China's military budget will also increase by 7.2% and be set at 1.665 trillion yuan ($231.4 billion) this year, according to a copy of a government work report seen by AFP.

A year after the anointing of President Xi Jinping for a historic third term, the goals and budget will be officially announced later in the day at the opening of a meeting of the National People's Congress (NPC).

The parliament is set to focus on a litany of economic and security challenges during the week-long conclave.

Last year, with the awarding of his latest five-year term, Xi cemented his place as China's most powerful leader since Mao Zedong.

But 12 months later, all focus will be on the dire state of China's economy, which last year posted some of its lowest growth in decades.

The country continues to grapple with a prolonged property sector crisis, record youth unemployment, and a global slowdown that is hammering demand for Chinese goods.

Armed police and security personnel are ubiquitous on Beijing's streets this week as thousands of delegates descend on the capital for the "Two Sessions", a carefully choreographed week-long gathering of the NPC and Chinese People's Political Consultative Conference (CPPCC).

This week's meetings are not expected to see the unveiling of big-ticket bailouts that experts say are needed to get the economy back on track.

Many of its major decisions will have been made weeks before, in closed-door meetings of the Communist Party, far from the international media's cameras.

Nevertheless, the topics that are up for discussion and the tone of the speeches allow for key insights into what's keeping China's rulers up at night.

"The NPC is not obsolete or irrelevant," analyst Nis Grunberg told AFP.

"It is an important platform for the leadership to communicate its key priorities."

Economy in focus

The first of the "Two Sessions" has already begun: the CPPCC kicked off on Monday afternoon.

The almost 3,000-member NPC, in turn, will begin meetings at 9:00 am (0100 GMT) and hold daily sessions until next Monday.

The first order of business will be Premier Li Qiang's work report, at which he will officially unveil the GDP goal.

Beijing has for years been reluctant to confront those pressures head-on with a major bailout, fearful of putting too much strain on fragile state coffers.

Analysts don't see any reason to think that will change soon.

Beijing "will likely err on the side of caution without conceding how large the pressures on the economy are", Diana Choyleva, chief economist at Enodo Economics, told AFP.

And analysts agree that stuck between deep reforms to restart economic growth and efforts to strengthen the state's power, China's policymakers have little room for manoeuvre.

Beijing revised a law dramatically expanding its definition of espionage last year and conducted raids on a string of big-name consulting, research and due diligence firms.

The legislature's top body approved a broad and vaguely worded revision to China's state secrets law in the run-up to the NPC that was "a clear signal of security's importance for this year's governance agenda", Choyleva of Enodo Economics said.

"The government may well double down on the current direction of elevating national security measures on all fronts," Ho-fung Hung, a professor of political economy at Johns Hopkins University, told AFP.

"It will not help the economy, but could help the party-state weather the storm of economic crisis."

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