China set a modest economic growth target of around 5% for the year, with the nation’s top leaders avoiding any large stimulus to spur a consumer-driven recovery already underway, suggesting less of a growth boost to an ailing world economy.
(Bloomberg) — China set a modest economic growth target of around 5% for the year, with the nation’s top leaders avoiding any large stimulus to spur a consumer-driven recovery already underway, suggesting less of a growth boost to an ailing world economy.
At his final government work report to the National People’s Congress — the annual parliamentary gathering — Premier Li Keqiang also said China will target disorderly expansion in the property sector and ensure “effective risk prevention and mitigation” for the country’s leading developers.
In other major announcements, China said its defense spending would grow by 7.2% this year, the fastest pace since 2019. At the same time, it will seek “peaceful reunification’ with Taiwan. With US tech curbs biting, Beijing reiterated a “whole nation” stance to achieve self-reliance.
The NPC, which kicked off Sunday and will conclude on March 13, promises a shakeup at the top echelons of government that could further consolidate President Xi Jinping’s power.
Market reaction:
- Chinese Stocks Decline as Congress Sets Modest Growth Target
- Property Shares Fall After China Targets ‘Unregulated’ Expansion
- Metals Feel Chill as Beijing Shies Away From Major Stimulus
- Iron Ore Most-Exposed Among Commodities From NPC
- China’s Yuan, 10-Year Yields Fall as Growth Target Disappoints
- China Bonds In For Tough Year Is Messaging From NPC
What to Know:
- Click here to read more on this year’s NPC
- What to watch out for this year (video)
- A QuickTake explainer on the NPC
- Insights on incoming officials, NPC delegates
Key Upcoming Events:
Key NPC/CPPCC events that have been announced so far include:
- March 6 – Delegates review government work report
- March 7 — New Foreign Minister Qin Gang holds briefing; An explanatory report about reform plan for government institutions will be delivered by State Councilor Xiao Jie in the afternoon
- March 10: The country’s president and vice president will be decided. Xi is expected to get a norm-busting third term as China’s president
- March 11-12: Delegates will decide on the country’s next premier and ministers, including central bank governor. Li Qiang is expected to replace Li Keqiang as the new premier when the decision is announced on March 11. Vice premiers and state councilors will be appointed on March 12 along with ministers and the PBOC governor
- March 13 — NPC closing session. New premier’s press conference likely to follow
Latest developments: (Time-stamps are local time in Beijing):
China May Exceed GDP Target, Ex-PBOC Official Says (1:49 p.m. Monday)
Chances are high China’s government will meet or exceed its relatively modest economic growth target for this year, a former central bank official said, with a more stable property market helping to underpin the recovery.
The gross domestic product growth goal of around 5% — released by the government on Sunday — “is a relatively prudent, pragmatic target,” Sheng Songcheng, the former head of the statistics and analysis department at the People’s Bank of China, said in an interview.
It gives the government more “leeway,” he said, adding that a much higher goal would hamper China’s efforts to keep inflation at 3% or below.
UBS Upgrades China’s Growth Forecast (11:11 a.m. Monday)
UBS Group AG raised its forecast for China’s economic growth for this year and next, citing a stronger-than-expected recovery after Covid restrictions were dropped and an expected boost to consumer confidence.
Gross domestic product is now projected to expand 5.4% in 2023, up from an earlier estimate of 4.9%, UBS economists including Wang Tao wrote in a note Monday. The economic re-opening is proceeding better than forecast, with a second wave of Covid infections not materializing and little sign of supply disruption, they said. The housing market is also recovering.
China Says Consumption Is Rebounding (11:02 a.m. Monday)
Chinese consumption in travel, dining and retail sales is rebounding from the Spring Festival holiday in late January, and growth will likely pick up gradually in the first half, Li Chunlin, vice head of the National Development and Reform Commission, the country’s economic planning agency, said at a briefing.
China’s GDP growth target of about 5% is in line with the nation’s current growth momentum, another vice head Zhao Chenxin said.
No Blue Skies in Beijing as Smog Hangs Over Landmark Meeting (11:08 a.m. Monday)
In a sharp departure from the blue skies that typically glisten for Beijing’s landmark events, the start of this year’s parliamentary session has been marked by smog, with the annual meeting suffering its worst air quality in at least a decade.
Levels of small particulates in the air jumped to 182 micrograms per cubic meter on Sunday as the National People’s Congress got underway, according to monitoring by the US Embassy. That’s well into the range considered unhealthy by medical experts and compares with an average level of less than 30 last year. The smog is palpable in the city of more than 20 million people, reducing visibility and causing people to cancel outdoor activities.
Auto Executive Urges Further Support of NEVs (9 a.m. Monday)
China needs a series of supportive measures to boost the country’s new energy vehicle industry, including a reform of the current consumption tax system on gasoline automobiles, the Securities Times reported, citing Zhu Huarong, chairman of Chongqing Changan Automobile and an NPC delegate.
Zhu’s proposals include ensuring healthy and coordinated development of NEVs, promoting data sharing of smart vehicles, reforming the consumption tax of gasoline vehicles, building a fair and reasonable industry standards for smart vehicles, and encouraging the purchase of NEVs by the public sector.
Xi Says China to Boost High-End Manufacturing (8:11 a.m. Monday)
China will take “forceful” measures to support the development of high-end manufacturing industry, Xinhua reported, citing President Xi Jinping’s comment at a meeting with delegates from Jiangsu province.
Xi also talked about “high-quality development” in the country, CCTV reported Sunday night. That involves enhancing self-reliance in technology, fostering small and medium-sized enterprises, and building globally influential centers for innovation. The Chinese leader also addressed the need to ensure a stable supply of grain and other key produce, and to expand channels for farmers to make money.
Crackdown on Carbon Data Fraud (12:39 p.m. Sunday)
Authorities in China will crack down on carbon data fraud as they try to strengthen the nation’s ailing emissions trading system ahead of a planned expansion.
Officials will improve statistics and accounting of carbon emissions, the National Development and Reform Commission said on Sunday. The market, which currently includes more than 2,000 major power plants and covers more emissions than any other trading system, has been beset by low prices, thin liquidity and accusations of data fabrication.
‘Whole Nation’ Stance on Tech (12:11 p.m. Sunday)
China pledged to pool together all of the nation’s resources to achieve self-reliance in technology, underscoring the government’s determination to secure key breakthroughs in areas such as semiconductors as tensions with the US escalate.
In his last government work report, outgoing Premier Li Keqiang reiterated the call for a “whole nation strategy” to edge out Washington on basic scientific research and advanced technologies ranging from advanced intelligence to space. His remarks come days after the Biden administration blacklisted more Chinese companies in the chip and genome industries.
GDP Goal Seen by Analysts as a Sign of Caution (12:09 p.m. Sunday)
China’s economic growth target for 2023 is a conservative goal that suggests the government is wary of challenges that may weigh on the economy and wants to account for risks to a recovery that is steadily building momentum.
That’s according to economists who weighed in after Sunday’s announcement that Beijing will target gross domestic product expansion of around 5% for the year. The goal is somewhat more muted than expectations among economists that China would set a growth target that was higher than 5%. It’s also below the median estimate for an expansion of 5.3%, according to economists surveyed by Bloomberg.
More Mega Renewable Projects (10:46 a.m. Sunday)
China will push ahead with the expansion of massive desert-based solar and wind projects and upgrade power grids as part of its priorities for 2023, the National Development and Reform Commission said in a report.
The nation will begin construction on a second batch of wind and solar bases and facilitate construction approvals for a third set of projects, it said.
China Seeks ‘Peaceful Reunification’ With Taiwan (10:37 a.m. Sunday)
China largely kept its language regarding Taiwan the same in an annual report to the nation’s legislature, suggesting that President Xi Jinping is maintaining its policy toward the self-ruled island even as global tensions increase.
“We should promote the peaceful development of cross-Strait relations and advance the process of China’s peaceful reunification,” Premier Li Keqiang said.
China Defense Spending to Rise 7.2% (10:11 a.m. Sunday)
China said its defense spending would grow by 7.2% this year — the fastest pace since 2019 amid increasing tensions with the US on a range of issues, including Taiwan.
Military expenditure is expected to rise to 1.55 trillion yuan ($225 billion) in 2023, according the Ministry of Finance’s annual report. Spending on the People’s Liberation Army has increased by at least 6.6% each year for the past three decades, keeping pace or often exceeding economic growth, although the figure is far surpassed by the US’s military expenditures.
China Vows to Rein in ‘Unregulated’ Expansion in Property Market (9:45 a.m. Sunday)
China said it will target disorderly expansion in the property sector, as policy makers seek to strike a balance between boosting economic growth and defusing financial risks.
Efforts should be made to prevent “unregulated” expansion in the property market to promote its stable development, Premier Li Keqiang said. The government also pledged to ensure “effective risk prevention and mitigation” in leading high-quality developers and help shore up their balance sheets, Li said.
China Vows to Control Fossil Fuels (9:33 a.m. Sunday)
China, the world’s top clean energy market, will aim to “move faster to develop a new energy system,” and plans to prioritize efforts to control fossil fuel consumption, according to a government work report.
Development targets for this year include “continued reductions in energy consumption per unit of GDP and in the discharge of major pollutants,” the document said.
China Aims to Increase Grain Output (9:22 a.m. Sunday)
China plans to increase grain production to more than 650 million tons this year, according to a government work report. The country also aims to keep grain acreage at stable level and promote production of oilseed crops, the report said.
China Sets Modest Growth Target (9:10 a.m. Sunday)
China set a modest economic growth target for the year, a sign the nation’s top leaders are still concerned about the country’s recovery, given weak consumer confidence, declining exports and a housing market still under pressure.
Beijing will target gross domestic product expansion of around 5% for 2023, Premier Li Keqiang said in his final government work report to the National People’s Congress. The budget deficit goal was set at 3% of GDP for 2023.
Limited Access for Foreign Media (8:30 a.m. Sunday)
Although this is the first NPC/CPPCC since the end of Covid Zero, some foreign journalists complained about a lack of access to the event. Organizers maintained some elements of the restrictions that were put in place during the pandemic, including obligatory PCR testing and quarantines.
On Sunday, reporters lucky enough to get the very limited spots for the opening ceremony had to stay at a hotel the night before to gain access to the Great Hall of the People — although quarantine rules were enforced less rigorously than was before.
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