China sets 5% economic growth target for 2023

China has announced an official target of achieving an economic growth rate of approximately 5% in 2023, with the aim of revitalizing its economy, which experienced sluggish growth due to pandemic-related measures over the past year. Additionally, the country plans to increase its defense budget by 7.2%, representing a slight increase over the previous year’s growth rate.

These figures were released at the beginning of the National People’s Congress (NPC), a legislative body that brings together almost 3,000 delegates in Beijing for eight days. During the congress’s opening, outgoing Premier Li Keqiang informed the delegates that China’s economy was steadily recovering and demonstrating significant potential and momentum for further development.

The government’s work report, which was presented at the congress, highlighted China’s focus on ensuring stable growth, employment, and prices in the face of global inflation, and set the GDP target accordingly. China has also released its annual military budget for 2023, which will increase by 7.2% to approximately 1.55 trillion yuan ($224 billion), as stated in a draft budget report published on Sunday morning.

For the second consecutive year, military spending has increased by more than 7%, surpassing last year’s growth of 7.1%, which is due to growing geopolitical tensions and regional arms competition. The increase remains far below the double-digit expansion, which is symbolically significant, as in previous years.

According to Li’s work report, the military should intensify its training and preparedness in all areas, establish new military strategic guidelines, devote more effort to combat training, and make well-coordinated attempts to strengthen military activities in all areas and fields.

The GDP target and military spending are two of the most closely watched aspects of the opening day’s activities, particularly this year, as China emerges from its economically draining zero-Covid policy. Against what some analysts expected to be a more ambitious goal for the coming year, the new number appears to be modest.

The Two Sessions, which includes a gathering of China’s top political advisory body, is a crucial annual political event.

This year’s Two Sessions is the first since Chinese leader Xi Jinping secured a norm-breaking third term atop the Chinese Communist Party hierarchy in October. During the congress, Xi will begin his third term as President, which is primarily a ceremonial role.