Much of China’s energies have been focused on what is known as antiaccess/area denial, which seek to push the US Navy and other forces far from China’s shores.
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At a news conference on Sunday Zhang said “In recent years, China has moderately raised defense investment”.
Authorities reiterated their prior language saying prudent monetary policy will remain neutral this year and that they’ll ensure liquidity at a reasonable and stable level.
In the past five years, the country has been trying to transform its armed forces from simply large to strong, with a restructured command system, enhanced combat readiness and reduced personnel. Xi’s government has already launched a probe into US imports of sorghum, and is studying whether to restrict shipments of USA soybeans-targets that could hurt Trump’s support in some politically important farming states.
In his speech, Li Keqiang also said that over the last few years the world has witnessed an anemic recovery in the global economy, the volatility of global financial markets, and the sharp rise of protectionism.
“The omission from the GDP growth target of ‘higher if possible’ and the new lower budget deficit target suggest slower growth and a fiscal drag”, said Callum Henderson, a managing director for Asia-Pacific at Eurasia Group in Singapore. It took him almost two hours to read through the 36-page document that lays out a bunch of important economic and budget targets for this year.
The growth target is “reassuring for highly leverage sectors as it indicates that the Chinese government is again prioritizing growth versus deleveraging”, French bank Natixis concludes in a report.
The country is also facing pressure to prevent a credit crisis, with local government debt growing 7.5 percent past year to $2.56 trillion, according to figures in January. Stability will be the watchword this year as President Xi Jinping pursues his vision of turning China into a “modestly prosperous” nation by 2020. “It is increasingly clear that China and Russian Federation want to shape a world consistent with their authoritarian model – gaining veto authority over other nations’ economic, diplomatic, and security decisions”.
During the two-week session, the nearly 3,000 delegates of the rubber-stamp parliament are also set to approve a proposed constitutional amendment that would scrap the presidential term limit, effectively paving the way for President Xi Jinping to stay in power indefinitely.
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He highlighted that Beijing will raise its defence budget by a hefty 8.1% over the previous year, signalling the country’s intent to build world-class armed forces. China will also continue to cut more steel and coal production, deepening its vow to make “skies blue again”, as Beijing chases quality over dizzying, polluting growth. He is expected to become vice president, with a specific role dealing with the Trump administration.
