Today’s China no longer aspires to break any ceiling, but to stay on the path of the previous year. Premier 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 in front of the nearly three thousand members of the National People’s Assembly, Li laid out a basically continuationist action program.
In any case, it is worth highlighting the growth of the defense budget by 7.2%, below the increases that are currently being studied in most governments in Europe, with two wars on its periphery. In absolute numbers it is impressive, as it is equivalent to 213,242 million euros. An amount that is considered necessary to exorcise the secessionist temptations of the sovereignist party that in December once again won the presidential elections on the island of Taiwan, even being 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 the latter two ex-colonies, he referred to the need to have “patriots” at the head of their institutions From Taipei, objections have already been raised to Li’s speech, framed in the horizon of “one country, two systems”.
The economic growth forecast of the Chinese Government, in any case, challenges the forecasts of the World Bank and the International Monetary Fund, of 4.5% and 4.6% for 2024.
Li Qiang touched on the weak point when he pointed to the reduction of youth unemployment as a priority. Although his one-hour speech did not explain the formulas to achieve this, beyond an extraordinary economic stimulus package, less inflated than expected. The aim is to keep unemployment in the big cities at bay, below 5.5%, while the public deficit threshold is at 3% of GDP. The same magic figure of 3% has been set as the inflation target.
Be that as it may, the economic recovery that was predicted after the closure of the covid, was neither seen in 2023 nor will be seen in 2024. Li himself has acknowledged that there are “many difficulties to solve”, starting with the stratospheric debt of the most important real estate companies, which captured national savings during the past decade and helped, at the head of the construction sector, to cheat 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 dispel fears and promote family spending, were disappointed. The supposed leftism of Xi Jinping, the country’s real strongman, still pales in comparison to the Western European welfare state.
The decline in the birth rate was also in Li’s crosshairs, in his speech at the Great Hall of the People. In the most important annual meeting of 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 to the elderly, still anemic, thanks to the rooting of filial responsibility in the Asian mentality.
