Today’s China no longer aspires to break any ceiling, but rather to stay on the path of the previous year. Prime Minister Li Qiang has set an economic growth target of 5% for 2024, identical to that set for 2023 (which ended up being exceeded by two tenths). In his first annual report to the nearly three thousand delegates of the National People’s Congress, Li outlined a basically continuous program of action.
In any case, it is worth highlighting the growth of the Defense budget by 7.2%, below the increases that are being considered right now in most governments in Europe, with two wars on its very periphery. In any case, in absolute numbers it is impressive, since it is equivalent to 213,242 million euros. An amount that is considered necessary to exorcise the secessionist temptations of the sovereigntist party that in December once again won the presidential elections in Taiwan, even though it was relegated to second place in the Taipei Parliament.
In this sense, Li sent an explicit message “to the compatriots of Taiwan, Hong Kong and Macau” and, in the case of these last two former colonies, he referred to the need to have “patriots” at the head of their institutions. Objections have already been raised from Taipei to Li’s speech, framed within the horizon of “one country, two systems.”
The Chinese government’s economic growth forecast, in any case, defies the forecasts of the World Bank and the International Monetary Fund, of 4.5% and 4.6% for 2024.
Li Qiang has put his finger on the issue by highlighting the reduction of youth unemployment as a priority. Although his one-hour speech has not explained the formulas to achieve this, beyond an extraordinary amount of economic stimulus, less extensive than expected. The objective is to keep unemployment at bay in large cities, below 5.5%. While the public deficit threshold is 3% of GDP. The same magic figure of 3% has been set as the inflation target.
Be that as it may, the economic rebound that was expected after the Covid confinement was not seen in 2023, nor will it be seen in 2024. Li himself has acknowledged that there are “many difficulties to be resolved”, starting with the stratospheric debt of his major real estate companies, which captured national savings during the last decade and helped, at the forefront of the construction sector, to weather the cooling of the flow of foreign direct investment and exports.
A weak external demand has not been able to be compensated by internal consumption, discouraged by labor uncertainties. Likewise, those who expected in Li’s speech signs of a deployment of the welfare state in China, in order to allay fears and promote family spending, have been disappointed. The supposed leftism of Xi Jinping, the country’s true strongman, still pales in comparison to the welfare state of Western Europe.
The decline in the birth rate has also been in Li’s focus, in his speech at the Great Hall of the People. In the most important annual event on the legislative calendar, the prime minister referred to the aging of the population – China has been losing inhabitants for two years – and the need to “strengthen” public assistance for the elderly, still anemic, thanks to the of filial responsibility in the Asian mentality.
