(NewsGlobal.com)- In late February, China announced that it was cutting its annual economic growth target to the lowest level in decades.
In a speech in the Great Hall of the People in central Beijing on February 26, the country’s number two leader, Premier Li Kequiang said the ruling communist party will aim for about 5.5 percent growth for 2022, down from last year’s expansion of 8.1 percent.
The ongoing COVID controls and China’s crackdown on debt in its real estate industry caused economic growth to fall to 4 percent in the final quarter of 2021. Surging energy costs from the war in Ukraine will only add more pressure.
Chinese manufacturing has been disrupted by Beijing’s Zero COVID policy, weak demand for Chinese exports, and shortages of power and processor chips.
Premier Li warned that the price of oil, wheat, and other commodities will “remain high and prone to fluctuation.” But Li did not directly say that the war in Ukraine was the cause.
China’s ruling party seeks to steer its economy to slower, self-sustaining growth based on consumer spending rather than trade and investment. However, last year’s abrupt slowdown caused alarm.
In his address, Li said China’s top priority is economic stability. To that end, the premier promised to “ensure food and energy security” by providing adequate supplies of grain and electricity. Beijing will also increase exploration for oil, gas, and minerals while improving its system of stockpiles of essential raw materials.
The CCP is also promising to cut taxes for those who generate jobs and wealth. Banks have also been told to increase lending and Beijing will stimulate the economy further by increasing spending on public works projects.
The ruling party will build more renewable power sources including solar and wind. At the same time, it is also lifting restrictions on carbon emissions by allowing utilities to burn more coal.
The ruling party also announced a 7.1 percent increase in its military spending, up from last year’s increase of 6.8 percent. China, which has the second-highest military budget in the world after the United States, is investing more in long-range, nuclear-capable missiles and other weapons designed to extend its power beyond its shores.