China announces economic growth target of ‘more than 6%’, technology plans

BEIJING (AP) – China’s second leader announced a healthy economic growth target on Friday and plans to make the nation self-sufficient in technology amid tensions with Washington and Europe over trade, Hong Kong and human rights.

The ruling Communist Party is targeting growth “above 6%” as the world’s second-largest economy recovers from the coronavirus, Prime Minister Li Keqiang said in a speech to China’s ceremonial legislature. Some 3,000 delegates gathered for its two-week annual meeting, the highest-profile political event of the year, under intense security and antivirus controls.

The party is moving from fighting the virus that emerged in central China in late 2019 to its long-term goal of becoming a global competitor in profitable technologies, including telecommunications, clean energy and electric cars.

The NPC meeting generally focuses on domestic affairs, but is increasingly overshadowed by geopolitics as President Xi Jinping’s government pursues more assertive trade and strategic policies abroad, cracks down on dissent at home, and confronts criticism for his treatment of Hong Kong and ethnic minorities.

Also on Friday, the government announced a 6.8% increase in military spending to 1.4 trillion yuan ($ 217 billion) as China faces tensions with India and other neighbors over conflicting territorial claims and ambitions to match states. The United States and Russia on ballistic missiles, stealth fighter and other weapons technologies.

That figure in a budget report released as Li spoke is less than double-digit increases from previous years, but it outpaces economic growth and is a marked increase in real terms at a time when inflation is close to zero. Foreign analysts say that total military spending is up to 40% more than the reported figure, which is the second highest in the world after the United States.

China became the only major economy to grow last year, achieving a minimal expansion of 2.3% in several decades after shutting down most of its industries to fight the virus. Growth accelerated to 6.5% from the previous year in the final quarter of 2020, while the United States, Europe and Japan struggled with new virus outbreaks.

Li promised to “work faster to improve our strategic scientific and technological capabilities,” seen by communist leaders as a path to prosperity, strategic autonomy and global influence. Those plans are threatened by conflicts with Washington over technology and security that prompted then-President Donald Trump to impose sanctions on companies, including telecommunications equipment giant Huawei, China’s first global tech brand.

The ruling party’s latest five-year development plan says efforts to make China a self-sufficient “technological powerhouse” are the top economic priority this year.

The party sees “scientific and technological self-reliance as strategic support for national development,” Li said.

The prime minister warned that there are unspecified “weak links” in virus control work and said the foundation for the economic recovery “must be further consolidated.”

Li vowed to pursue “green development” following Xi’s commitment last year to ensure China’s peak carbon emissions by 2030 and achieve carbon neutrality by 2060. That will require sharp increases in clean and renewable energy in an economy that It gets 60% of its energy from coal and is the world’s largest source of climate-changing industrial pollution.

“We will accelerate the transition from China’s growth model to one of green development and promote both high-quality economic growth and high-level environmental protection,” Li said. It promised to reduce carbon emissions and energy use per unit of economic production.

The prime minister said Beijing will “improve relevant systems” in Hong Kong “to safeguard national security,” but did not give details of possible changes in the territory, where the ruling party is tightening control after protests in favor of the democracy. The party used last year’s legislative session to impose a national security law in Hong Kong under which dozens of activists have been arrested.

“We will resolutely protect ourselves against and prevent interference by external forces in Hong Kong affairs,” the prime minister said.

A spokesman for the legislature, Zhang Yesui, said on Thursday that he will consider unspecified changes to support the “patriots who rule Hong Kong,” fueling fears of Beijing’s plans to exclude opposition voices from the city’s political process. .

Speculation has centered on the possibility of reallocating votes in the 1,200-member committee that selects the Hong Kong leader to exclude the small number of local elected district councilors.

Li repeated official promises to promote “peaceful growth of relations” with Taiwan, but did not announce any initiative toward the autonomous island that was separated from the mainland in 1949 after a civil war. Beijing claims Taiwan as its territory and has threatened to invade it if it tries to formalize its de facto independence. Li said mainland China “will resolutely deter” any activity “that seeks ‘independence from Taiwan’.”

This year’s legislative meeting is conducted primarily using video links to keep Chinese leaders, delegates and reports separate as an anti-virus measure. Last year’s meeting was postponed from March to May due to the outbreak. The official Xinhua news agency said the decision to stick to the calendar this year shows that economic and political life is “returning to normal.”

The ruling party previously announced that it achieved its goal of doubling economic output from 2010 levels for last year, requiring annual growth of 7%. Xi has spoken of doubling production again by 2035, which would imply annual growth of around 5%, still among the highest for any major economy.

The ruling party’s desire for prosperity brought about by free market competition clashes with its insistence on playing a dominant role in the economy and reducing dependence on other countries.

The prime minister said Beijing will encourage consumer spending on home appliances, cars and other expensive items to help foster self-sustaining economic growth and reduce dependence on exports and investment.

Li said the ruling party will promote the development of China’s electric vehicles by building more charging stations and accelerating the development of battery recycling. China is the world’s largest electric vehicle market, accounting for about half of global sales.

Beijing will promote “national circulation,” Li said, referring to official pressure on industries to use more components and technology supplied by China and rely less on inputs from American, European and Asian suppliers, even as that increases prices. costs.

That emphasis on self-reliance has fueled fears that the world could be divided into industrial spheres separate from the United States, China, and others with incompatible technologies, less competition, and higher costs.

The goal of “decoupling them from foreign technology and supply chains” is “more likely to hurt productivity than help it” and will make reaching the 2035 target more difficult, said Mark Williams of Capital Economics in a report this week. week.


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