China cuts GDP target to 25 years low of 6.5%

SansadTV Bureau
File photo of Chinese Prime Minister Li Kiqiang.

File photo of Chinese Prime Minister Li Kiqiang.

Chinese premier Li Keqiang has slashed China’s GDP target to a 25-year low and omitted customary mention of defence allocation as the Parliament started annual meet hailing ‘core leader’ status of President Xi Jinping.

Li, the second-ranked member of the Politburo Standing Committee of the ruling Communist Party of China, in a 42-pagework report to the National People’s Congress, set GDP growth target at around 6.5 per cent for this year, down from last year’s 6.7 per cent, indicating the continuation of slowdown.

This closely-watched target is a 25-year low, down from last year’s actual growth of 6.7 per cent. The previous low was a six per cent target for gross national product growth in 1992, a report by state-run Xinhua news agency said.

Hundreds of journalists from home and abroad lined up since early morning outside the Great Hall of the People, the seat of China’s power, to see Li’s target for 2017, which sets the tone for the world’s second largest economy for this year.

Conspicuously absent in Li’s report and other documents circulated by the Planning and Finance Ministries to the 2900 members of the NPC was the customary mention of the defence allocation for the world’s largest military of 2.3-million.

NPC spokesperson Fu Ying yesterday announced that China will increase its defence spending by around seven per cent this year, the slowest hike since 2010. China’s defence budget is the second largest after the US.

It is customary in China’s legislative process to include the total amount for the defence allocation in work report to the NPC legislators.

It is not clear whether the defence budget was privately circulated to the lawmakers away from the media glare.

The absence of the defence budget was a surprise as it was rare in recent years and the Premier’s report made no mention of it though Li said all efforts were being made for modernisation of the People’s Liberation Army to improve its combat readiness.

Last year, China increased its defence spending by 7.6 per cent allocating about 954 billion yuan (around USD 143.7 billion) about three times that of India.

The seven per cent increase will result in China’s military spending to cross one trillion-yuan mark for the first time which is in dollar only around USD 144 due to 6.6 per cent depreciation of Chinese currency last year.

Fu said China’s defence spending square up to 1.3 per cent of its GDP while its officials said the budget still looks smaller than the US defence budget of about USD 600 billion which was expected to go up another USD 54 billion following 10 per cent raise announced by President Donald Trump.