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China’s Premier Li Qiang addressed the National People’s Congress annual meeting, acknowledging that achieving 5% economic growth this year will be challenging due to difficult times.
Li Qiang outlined plans to boost spending on advanced technology, fortify China’s military, and support the economy. However, no big package of stimulus was presented to help boost markets and reassure worried investors.
The government will continue with a “pro-active fiscal policy and prudent monetary policy,” suggesting no major change in the leadership’s approach to the economy.
Li also announced plans to boost growth by issuing long-term bonds over the next several years, starting with 1 trillion yuan (about $139 billion) this year. The money would be used to implement “major national strategies” and fortify security in key areas.
The government plans a “new development model” for the housing market, including building government-subsidized housing to ease a prolonged real estate slump.
China’s sustained economic recovery is not yet stable, with insufficient effective demand, overcapacity in some industries, weak social expectations, and many risks and hidden dangers.
Replicating the same growth rate this year will be more difficult due to the economy starting from a higher base. Achieving this year’s targets will be difficult, including raising incomes, creating 12 million jobs, and making the economy more energy efficient in pursuit of climate goals.
China’s most powerful leader in decades, Xi Jinping, heads the party and has installed loyalists like Li in top posts to strengthen its grip on the economy and society.
