Economic objectives at half mast, Defense budget up sharply… Xi Jinping launches his 3rd term


Sébastien Le Belzic (from Beijing), edited by Ugo Pascolo with AFP

An entrance under a huge sickle crossed by a hammer in front of 3,000 deputies. To mark the official start of his third term, which coincides with the holding of the annual parliamentary session, Xi Jinping respected the immutable ceremonial that has not changed since Mao Zedong. Still, this year marks an important change: it is the biggest cabinet reshuffle for 10 years. Thus, Prime Minister Li Keqiang leaves his place to Li Qiang, former head of the CCP in Shanghai, and loyal lieutenant of Xi Jinping.

Growth “of about 5%”

The latter also announced the 2023 roadmap for the People’s Republic of China, with a growth target of “around 5%”, at a time when the second largest economy in the world sees activity resume after having abandoned the essential of the anti-Covid measures which have hit businesses and factories hard. Last year, its gross domestic product (GDP) grew by just 3%, well below the official target “of about 5.5%”. The economy has shown signs of improvement in recent months, with manufacturing activity picking up strongly in February. However, growth of “around 5%” has been one of China’s most modest targets in decades.

Beijing has also set itself the goal of creating some 12 million jobs this year in urban areas, a figure down from 2022 (11 million). However, this criterion does not provide information on the number of jobs destroyed due to the health crisis. China expects the unemployment rate to stabilize this year at 5.5%. The absolute record – 6.2% – was reached in February 2020, at the height of the epidemic. Here too, this figure paints an incomplete picture of the situation: in China, unemployment is calculated for urban dwellers only. As for inflation, China wants to contain it at 3%.

A Defense budget up 7.2%

If the economic objectives are modest, this is not the case with regard to Defence. In a context of global tension revived by the Russian invasion of Ukraine, as well as its traditional rivalry with its neighbors, the United States and Taiwan, Beijing has announced a 7.2% increase in its defense budget. This percentage is up slightly compared to last year (7.1%), is the largest increase since 2019. With this envelope of 1,553.7 billion yuan, or 225 billion dollars, China has the second world defense budget, after the United States.



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