China has revised its economic growth target down to 5.5% for 2022 but expects to increase military spending by 7.1%. In his eighth (and last because at the end of his mandate) speech to the more than 3 thousand delegates of Parliament in plenary session, Premier Li Keqiang said that the growth target downsized from the previous + 6% (and beyond) is due to the contraction in demand, the disruption of supply chains and the weakening of expectations. Furthermore, he added, the global economic recovery lacks momentum.
The grain harvest emergency
There is also the Ukrainian crisis that makes things even more difficult. On the sidelines of the opening of the Session, Agriculture Minister Tang Renjian said that China’s winter wheat harvest could be the “worst in history”, raising concerns about supplies to the world‘s largest wheat consumer. With Russia and Ukraine at 29% now at war, prices have already risen by 14%.
The minister added that rare heavy rains last year delayed planting by about a third of the normal grain area. “A survey of the winter wheat crop carried out before the onset of winter found that the amount of first and second grade crops had decreased by more than 20 percentage points,” Tang said.
“We went to the base not long ago to do a survey and many agricultural experts and technicians told us that crop conditions this year could be the worst in history,” he said. “This year’s wheat production really faces enormous difficulties. “
The increase in military spending
Meanwhile, the Chinese premier announced a 7.1% increase in defense spending in 2022 to $ 229 billion. Beijing has the highest budget in the world after the United States, allowing it to maintain the largest standing army, with 3 million personnel and an arsenal of advanced weapons, including two aircraft carriers with more on the way, stealth fighters, an advanced missile force and nuclear-powered submarines.