Chinese Premier Li Keqiang announced on March 5 at an annual parliamentary meeting that China has set a growth target of more than 6% for 2021. Significantly, that’s the country’s most important political event of the year.
The country reported GDP growth of 2.3% in 2020, the only major economy to expand amid the COVID-19 pandemic.
The new target is more than what China needs to achieve to return on track with President Xi Jinping’s long-term aim for the economy. To double GDP by 2035, China would need to increase a bit less than 5% in 2021. However, similar growth would be necessary in the next decade or so.
For 2021, Li said China aimed for an urban unemployment rate of about 5.5%. They targeted the creation of over 11 million new urban jobs. Same as in 2019 and up from 9 million last year.
Li added that China would also aim to increase about 3% in the consumer price index, a measure of inflation.
Li’s remarks came during China’s Two Sessions meeting, the country’s most prominent political gathering of the year. Previously, there had been an intense debate in the country about bringing back a GDP target that they had abandoned in 2020 as the COVID-19 took hold.
On international trade, Li said the country would promote the growth of mutually beneficial China-US business relations. He added that this would have to be based on equality and mutual respect.
He announced China would accelerate free trade negotiations with Japan and South Korea. They plan to actively consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Tensions that intensified among China and the U.S. in the last years have shifted from just trade into areas such as technology and controversy over the origins of coronavirus.
Li announced that there were still weak links in China’s control of coronavirus but that the economy had sufficiently rebounded.
China’s Finance Ministry said spending on national defense would boost 6.8%
Furthermore, according to Li, there are no plans for new bond issuance for combating the pandemic’s effects, and that the deficit-to-GDP ratio would be about 3.2%, lower than last year’s target of more than 3.6%.
The Chinese premier also reiterated existing commitments to letting more foreign investment in domestic industries.
He said China would expand military training and preparedness and improve defense-related technology.
Except for this, China’s Finance Ministry said spending on national defense would boost 6.8% to about 1.36 trillion yuan, which equals $210.1 billion. It has to be mentioned that that’s slightly faster than the last year’s 6.6% rise.