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In his first speech to the Plenary of Parliament, the Prime Minister Li Qiang reads a Work Report which reports a GDP growth target for 2024 of around 5%, practically identical to that of the previous year, which clashes with the increasingly critical indicators of recent months for Beijing’s economy. The military budget will grow by 7.2% in 2024, at the same level as last year at 1,665 billion yuan (about 232 billion dollars). Taiwan in the crosshairs, after the elections won for the third time by the independentists, Beijing increases its focus on reunification objectives.
China, the National People’s Congress opens in Beijing
Inflation target
China is struggling with deflation, so the targets include 3% inflation, 12 million new urban jobs and an unemployment rate “around 5.5%” (but youth unemployment, the most difficult to the Government’s plans, is not indicated).
The deficit is expected at 3%, compared to 3.8% in 2023, increased following new government bonds to support the economy. Special debt securities are planned to be issued in the coming months for a value of 1,000 billion yuan (around 140 billion dollars), which will probably be recorded off-balance sheet.
In 2023 the budget was estimated at +7.2% against +7.1% in 2022, equal to 1,560 billion and 1,450 billion yuan respectively. The two figures were substantially stable if expressed in dollars, around 230 billion, due to the exchange rate effect, while still following a growth trend.
Taiwan factor
China expresses its full determination to thwart Taiwan’s independence and all related disruption operations. This, and it was to be expected, is the most awaited element in terms of foreign policy. Now recurring in the latest Work Reports but made even more urgent by the victory in January, the third in a row, of the independent party DPP.