China growth rate at 6.5%, lower than India and defence budget 4 times higher
For the second consecutive year, China’s growth target remained at the lowest since 1992 while the defence budget is expected to grow this year by 8.1% to 1.11 trillion yuan or $175 billion, up from 7% in 2017.Updated: Mar 06, 2018 23:18 IST
China on Monday set its economic growth forecast for 2018 at “around 6.5%” in a bid to maintain financial stability amid worries over rising debt and hiked its defence spending to $175 billion, almost four times India’s outlay.
For the second consecutive year, the closely watched growth target for the world’s second largest economy remained at the lowest since 1992, when China grew at 6%.
China’s defence budget — the world’s second-largest defence outlay behind the US, though by a large margin — is set to grow this year by 8.1% to 1.11 trillion yuan or $175 billion, up from 7% in 2017. The is the country’s largest increase in defence spending in three years.
China’s economic growth rate – which continues to be among the highest in the world – has slowed down in recent years because of falling demand for its goods across the world and overcapacity in its manufacturing and steel sectors.
But the focus of China’s growth is on quality and not on quantity any more, experts said.
“While growth handily surpassed 2017’s target with a 6.9% expansion that was the first acceleration since 2010, economists forecast a moderation to 6.5% this year amid the ongoing deleveraging drive and trade tensions with the Trump administration,” a Bloomberg report said on the growth forecast.
China’s official media said this year’s defence spending would be higher than the increase of 7.6% in 2016 and 7% in 2017. It is only the third time since 2013 that the hike has been in single digits. However, the outlay was almost four times India’s allocation of a little more than $43 billion for 2018-19.
The announcement of China’s expenditure on defence is closely followed as an indicator of its strategic intent as Beijing expands its influence worldwide. The defence outlay is particularly important for several of its neighbours – including India – with whom China has territorial disputes.
It is also widely believed that China’s actual spending on defence exceeds the allocation that is made public.
China will “advance all aspects of military training and war preparedness, and firmly and resolvedly safeguard national sovereignty, security, and development interests”, Premier Li Keqiang told the opening session of the National People’s Congress (NPC) or the legislature.
“Faced with profound changes in the national security environment”, the absolute leadership of the military by the Communist Party must be observed, and unity between the government, the military and the people must always be“strong as stone”, he added.
Last year’s 7% increase in China’s defence budget was the lowest in seven years. In real terms, the budget of the People’s Liberation Army (PLA), the world’s largest armed forces, last year was around the $ 146 billion-mark, a quarter of the US defence outlay.
The important targets for China were released ahead of Premier Li delivering the government work report on Monday, the first day of the annual session of the NPC.
The session, which is expected to run for about two weeks, will finalise the way for President Xi Jinping to govern China beyond his stipulated two terms by removing the presidential term limit in the Constitution.
The proposal to remove the two-term limit triggered criticism both within China and abroad amid fears that Xi – China’s most powerful leader in decades – is deliberately building a cult of personality and power around him on the lines of Mao Zedong.
Sharp focus, however, remains on China’s economic markers with Xi’s government attempting to cut down poverty and pollution .
The work report said that more than 68 million people have been lifted out of poverty in the past five years, with Li noting that the government will attempt to lift more people out of rural poverty in the coming years.
Reflecting a boom in outward tourism, the report revealed that “tourist departures have grown from 83 million to over 130 million”.
The fight against pollution is showing results as well, the work report revealed.
“Both energy and water consumption per unit of GDP have fallen more than 20%, the release of major pollutants has been consistently declining, and the number of days of heavy air pollution in key cities has fallen 50%,” the report said.