[China Two Sessions] Growth Rate Target Around '5%'... Lowest in 29 Years (Comprehensive)

Lowest Target Since 1994 Announcement
"Create 12 Million Urban Jobs"
Key Factors: Domestic Demand Expansion and Industrial Modernization

The Chinese government has set this year's gross domestic product (GDP) growth target at "around 5.0%" and identified expanding domestic demand and modernizing traditional industries and small and medium-sized enterprises as the top policy priorities for the year.

Li Keqiang, Premier of the State Council of China, announced this during the opening ceremony work report of the National People's Congress (NPC) held on the 5th at the Great Hall of the People in Beijing. The "around 5.0%" target is the lowest growth rate goal since the government began announcing growth targets in 1994, except for 2020 when the announcement was omitted due to the impact of the COVID-19 outbreak.

[Image source=Yonhap News]

Premier Li also stated that the consumer price index (CPI) inflation target for this year is around 3%, and pledged to create 12 million new urban jobs. He projected that the fiscal deficit ratio relative to GDP would be about 3% this year due to strong fiscal policies.

Explaining the policies of the new leadership inaugurated this year, he emphasized expanding domestic demand as the top priority. He said, "Priority must be given to the recovery and expansion of consumption," adding, "We need to increase the incomes of urban and rural residents, stabilize spending on high-priced goods, and promote the recovery of service consumption." He further explained that "3.8 trillion yuan (approximately 716.946 trillion won) will be allocated for the issuance of special local government bonds this year," and that major projects outlined in the 14th Five-Year Plan will accelerate. Additionally, he elaborated, "To promote private investment, more private capital should be encouraged and attracted to major national projects and projects addressing vulnerable sectors."

He also stressed the importance of modernizing the industrial system. Premier Li said, "We must accelerate the digitalization of traditional industries and small and medium-sized enterprises to promote upgrading, smartization, and environmental friendliness," and ordered, "Speed up research and development and application of advanced technologies, and improve modern logistics systems." He added, "We should develop the digital economy and strengthen regular supervision to support the development of the platform economy."

Furthermore, he mentioned the importance of ▲ integration and development of the public sector and development of the non-public sector ▲ strengthening efforts to attract foreign investment ▲ resolving economic and financial risks ▲ stabilizing grain production and revitalizing rural areas ▲ continuing the transition to environmentally friendly development ▲ and developing social services such as housing support, compulsory education, and elderly care.

He reiterated the "One China" principle. Premier Li stated, "We must implement our Party's new policy on resolving the Taiwan issue, adhere to the One China principle and the 1992 Consensus, oppose Taiwan independence, and take resolute measures to promote reunification," adding, "We should promote the peaceful development of cross-strait relations and advance the process of China's peaceful reunification." He also said, "The Chinese people are one family bound by blood," and emphasized, "Both sides of the strait should jointly promote Chinese culture and encourage accelerating China's rejuvenation."

In his closing remarks of the work report, he called for efforts to build a "modern socialist country" centered on Chinese President Xi Jinping. He urged, "Let us unite more closely around the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core, raise high the great banner of socialism with Chinese characteristics, and fully implement the guiding principles of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the leadership principles of the 20th National Congress."

Meanwhile, Premier Li will step down from his position as the second-ranked official in the Party and State Council after this work report. His successor is expected to be Li Qiang, a member of the Politburo Standing Committee, who will officially debut at a press conference for domestic and foreign media on the closing day of the NPC on the 13th.