Li projected a government deficit for 2016 of 2.18 trillion yuan, 3.0 percent of GDP, up from 2.3 percent previous year, which would be the highest since the founding of the People’s Republic in 1949.
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China announced an economic growth target of 6.5% to 7% and unveiled the lowest defence budget increase in six years as it opened its annual National People’s Congress (NPC) in Beijing.
The exact figure will be revealed as part of the overall proposed national spending plan for 2016 to be presented at Saturday’s opening of the NPC’s annual two-week session.
Though recent rises in defence budgets surpassed GDP growth, China’s military expenditure in 2015 accounted for 1.33 percent of GDP, well below the world’s average of 2.6 percent.
“If the 6.5 to 7 percent growth should be solid and real, I think it’s very acceptable”, said Liu Gexin, a delegate from Sichuan province in the southwest.
The Chinese military remains the largest standing army in the world, with over two million soldiers.
The latest growth target would be the minimum President Xi Jinping said in November is needed this decade to achieve the official goal of making China “moderately prosperous”.
The party congress is also expected to approve a new five-year plan, a legacy of the communist command economy.
Such pledges have been made many times before and Christopher Balding, professor of economics at Peking University’s HSBC Business School, told AFP the cuts were insufficient to cancel out additional capacity recently added or still coming online.
China, the world’s second-largest economy, is increasingly exposed to worldwide crises like the Middle East but has little experience at dealing with them, unlike established powers like the US and Russian Federation. A Chinese military band conductor leads the band at the opening session of the annual National People’s Congress in Beijing’s Great Hall of the People, Saturday, March 5, 2016.
China will strengthen construction of storage of strategic reserves for oil products, and will build reserves for natural gas.
In 2015, the defence budget was increased by 10.1 per cent.
The reports provide a blueprint of China’s aspirations for the next five years, and show Beijing trying to strike a delicate balance between holding up growth and restructuring underperforming industries, which are major contributors to pollution and are responsible for much of the country’s corporate debt overhang.
Fu blamed the United States for militarizing the South China Sea, saying that most of the advanced aircraft and warships passing through the disputed waters belong to the USA military.
Along with safeguarding China’s “sovereignty and territorial integrity”, China also wants to maintain “the peaceful growth of cross-Strait relations and safeguard peace and stability in the Taiwan strait”, Li said.
Retired Chinese Gen. Xu Guangyu said that military spending has also likely dipped due to modernization slowdowns. Liu Shangxi, director of China Fiscal Science Institute, said the increased budget can not be used simply as bailout money for “zombie enterprises”.
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“A single-digit rise following years of double-digit growth is a prudent, moderate move”, said Chen, adding that there are no “hidden” expenses in the country’s military spending.
