China’s new economic agenda, very similar to the previous one: conclusions| Trending Viral hub

Beijing was full of politics on Tuesday. China’s annual legislative meeting: the National Congress of Peoplewhen Communist Party leaders promote their solutions to national ills, open to the public.

The event is an opportunity for leaders to point out the direction of the economy and outline how and where the government will spend money next year.

However, although they aimed high, they offered little. Officials signaled they were not prepared for any dramatic measures to revive an economy hit by a housing crisis, loss of consumer confidence and financial pressures from debt-ridden local governments. Despite their reluctance to spend, China’s top leaders said the economy would grow about 5 percent this year.

The growth target and other policies were included in a report presented to the legislature’s annual session. It was delivered by China’s No. 2 official, Li Qiang, and is the main event of a week-long meeting dominated by officials and party loyalists.

There was one word that economists universally used to describe China’s 5 percent growth target: ambitious.

In another time that would not have been the case. For decades, China’s economy was synonymous with much higher growth, sometimes even in double digits. But three years of strict pandemic measures took their toll and a deepening real estate crisis that has caused dozens of developers to collapse. In the absence of action from Chinese leaders, some experts are now skeptical that China will achieve 5 percent growth this year.

“It’s an unrealistic set of targets, as you would expect,” said Logan Wright, director of China market research at Rhodium Group, a firm that specializes in China research.

It was still possible that the housing crisis could be eased this year, Wright said, “but policy measures as outlined here won’t have much to do with it.”

Some people believed (or at least hoped) that Tuesday’s reports conveyed that China was willing to take more significant steps to revive the economy, for example by bailing out local governments, rescuing real estate companies that have not collapsed or offering aid to the homes. to stimulate spending.

Instead, the government said it would make a similar amount of money as last year available to local governments in special bonds. He offered no new measures for the real estate market and only spoke of the need to increase consumer confidence.

“They could have done more and the support could have been greater,” said Tao Wang, chief China economist at UBS. “They need more explicit support from the central government,” he said.

It wasn’t just economists who were disappointed. Investors expecting China to deploy its heavy weapons were also disappointed. In Hong Kong, where foreign investors can place bets on China’s biggest companies, the Hang Seng Index fell 2.6 percent.

“Anyone looking for the political bazooka will be disappointed,” said Andrew Polk, co-founder of Trivium China, a research and advisory firm. “But,” he added, “that die was already cast some time ago.”

China’s top leaders outlined plans to expand military spending by 7.2 percent in 2024, reaching about $231 billion. The percentage increase was the same as last year and continued a decades-long expansion of China’s military outlays, now the world’s second largest after the United States.

China’s spending on warships, fighter jets and other weapons is primarily aimed at projecting power in Asia, including by consolidating the country’s control over the disputed South China Sea and threatening Taiwan, the self-governing island democracy that Beijing says It’s your territory.

In his report to the legislature, Li repeated China’s long-standing warning against “separatist activities aimed at ‘Taiwan independence,'” adding that Beijing “will be firm in promoting the cause of China’s reunification.” ”.

Mr. Li’s vague comments reflected how Chinese leaders are waiting for Taiwan’s elected president, Lai Ching-te, to take office in May before considering any major steps, which could include more military operations around the island, he said. Ou Si-fu. researcher at the National Defense and Security Research Institute, a think tank in Taipei under Taiwan’s Ministry of Defense.

But China’s continued high spending on its military showed that Xi Jinping would continue to prepare for potential conflict, if only to show Washington that it was serious about asserting its interests.

“Since the relationship with the United States is not good, of course China cannot show too much weakness,” Ou said.

China invited journalists from around the world and provided visas that have in most cases become difficult to obtain. For many foreign correspondents, this year’s National People’s Congress was the first time the Chinese government allowed them to enter China to report since the pandemic.

However, the party also made an abrupt change in the way it would communicate in Congress. On Monday he said it was scrapping a long tradition: the prime minister’s press conference. It had been one of the few opportunities for journalists to interact with senior officials. The decision to eliminate the press conference, announced on the eve of the legislative conclave, was seen by many as another move away from transparency.

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