In China the National People's Assembly begins 5:57
Hong Kong (CNN) --
China has set an official economic growth target of "around 5%" for 2023 as it seeks to revive the world's second-largest economy after a year of tepid growth due to pandemic measures.
It will also expand its defense budget by 7.2%, which is a slight increase over the growth of the previous year.
Both figures for next year were released at the opening of the annual meeting of the National People's Congress (NPC), the country's official legislature, which draws nearly 3,000 delegates to Beijing over the next eight days.
"China's economy is experiencing a steady recovery and demonstrates great potential and momentum for further growth," outgoing Premier Li Keqiang told delegates as he delivered a government work report at the opening of the congress this Friday. Sunday.
The economy added more than 12 million urban jobs last year, with the urban unemployment rate falling to 5.5%, according to the labor report, which emphasized China's focus on ensuring stable growth, employment and prices amid global inflation and set the GDP target.
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People walk in front of the Great Hall of the People on March 4, 2023, in Beijing, as the annual gathering known as the Two Sessions begins.
(Credit: Visual China Group/Getty Images)
ANALYSIS |
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China also unveiled its annual military budget for 2023, which will rise 7.2% to about 1.55 trillion yuan ($224 billion) in a preliminary budget report released Sunday morning.
The spending surge marks the second year in a row that the annual increase in military spending has exceeded 7% and surpassed last year's growth of 7.1%, amid rising geopolitical tensions and a regional arms race.
As in other recent years, the figure remains well below the symbolically significant double-digit expansion.
"The armed forces should intensify military training and readiness in all fields, develop new military strategic guidance, devote more energy to training under combat conditions, and make well-coordinated efforts to strengthen military work in all directions and domains." says Li's work report.
The GDP target and military spending are among the most closely watched in opening day proceedings, and the GDP target figure in particular is being monitored this year as China emerges from its economically taxing zero-Covid policy.
The new figure appears modest compared to what some analysts had predicted could be a stronger target for next year.
The NPC meeting is a key annual political event that occurs in conjunction with a meeting of China's top political advisory body, and the events together are known as the Two Sessions.
This is the first Two Sessions since Chinese leader Xi Jinping won a third rule-breaking term at the top of the Chinese Communist Party hierarchy in October.
Xi is set to enter his third term as president, a largely ceremonial title, during the congress.
Chinese Premier Li Keqiang speaks during the opening session of China's National People's Congress (NPC) at the Great Hall of the People in Beijing, Sunday, March 5.
(Credit: Ng Han Guan/AP)
Economic recovery
China's GDP expanded by only 3% in 2022, thus missing the official target of "about 5.5%", mainly due to prolonged restrictions due to the covid-19 pandemic.
It was the second-lowest annual growth rate since 1976, trailing only 2020, when the initial outbreaks of Covid nearly brought the economy to a standstill.
In December, after the Communist Party abruptly ended its zero covid policy, a massive wave of infections swept across the country, plunging supply chains and factories into chaos.
But the disruptions began to fade in January and the economic recovery picked up speed last month.
Official data released on Wednesday showed China's factories had their best month in almost 11 years in February, underscoring how quickly economic activity has picked up after the end of the Covid-19 exit wave.
The service and construction industries also had their best performance in two years.
China calls its response to covid-19 a "miracle in human history".
The data is not so clear
Moody's Investors Service has since raised its China growth forecast to 5% for 2023 and 2024, up from 4% previously, citing a stronger-than-expected rebound in the near term.
Analysts had predicted a rocky road to China's recovery amid global headwinds, which may also have been reflected in the conservative 2023 target of "around 5%" announced on Sunday.
The global economy will weaken further this year as rising interest rates and Russia's war in Ukraine continue to affect activity, the International Monetary Fund estimated in January.
Global growth is likely to slow from 3.4% in 2022 to 2.9% in 2023.
China is set to release its import and export data for the first two months of this year on Tuesday, which will provide a glimpse into world trade demand.
China's economy expanded 3% in 2022, below the government's target
During the congress, the ruling Communist Party's new economic team, including several ministers and finance chiefs, will be unveiled, and other key appointments, already selected by the Communist Party leadership, will also be approved.
Premier Li's replacement will be formally appointed during the meeting, which runs until March 13.
The new economic team will face the difficult task of reviving China's economy while navigating a series of escalating challenges, including sluggish consumption, rising unemployment, a historic recession in the real estate sector, and growing tension with the United States. United by Tech Sanctions.
Military expenses
The 7.2% increase in planned defense spending marks the first time in the past decade that the budget growth rate has increased for three consecutive years, as Beijing continues to modernize and strengthen its military, while putting pressure on Taiwan. , the autonomous island democracy that the Chinese Communist Party claims as its own even though it has never ruled.
China now controls the world's largest navy by size and advances its fleet of nuclear submarines and fighter jets.
The military budget expanded 7.1% to 1.45 trillion yuan in 2022, compared with 6.8% a year earlier.
Last year, China's annual defense spending grew by double digits in 2015. This year's budget size is more than double that of ten years ago.
Chinese officials have repeatedly tried to present their military spending as reasonable relative to other countries like the United States, part of China's attempt to present itself as a peaceful power, despite its aggression in the region, including the militarization of the China Sea. South and the intense patrolling around Taiwan.
During a press conference on Saturday before the opening day, NPC spokesman Wang Chao said China's defense budget maintained a "relatively moderate and reasonable growth rate."
“China's defense spending as a percentage of GDP has remained stable over the years.
It is basically stable, below the world average,” Wang said.
CNN's Mengchen Zhang in Beijing contributed reporting.