China, considered the Asian giant, aims to maintain a 6.5% economic growth in 2018, the same as last year. This was declared by Premier Li Keqiang during the annual session Parliament of China, the National People’s Congress (NPC). The focus of the budget policy will instead be on issues like financial risk control, pollution reduction, and quality growth.
It was also announced that a lower GDP of 2.6% is targeted for the year, a decrease compared to last year’s 3% GDP. However, the government commits to its earlier objective of doubling its per-capita GDP by the year 2020 as compared to the 2010 level. The growth of 6.9% recorded in 2017 exceeded the target. The performance of the economy in 2017 can be attributed to three factors, ie infrastructure, property, and trade surplus. A moderate growth of all three is expected in 2018 as a result of the crackdown on debt and on corrupt industries, eg steel and coal.
Targeted Military Budget
Interestingly, China intends to increase its military budget to an additional 8.1% from the 2017 budget. While it wanted to keep its economic growth target the same as last year, a bigger increase will be placed on military spending than the two previous years.
The budget report provided during the Parliament’s annual meeting showed that 1.11 trillion yuan, or US$175 billion, will be allocated for defense. This is a 7% increase from the 2017 defense budget of 1.044 trillion yuan or US$164.60 billion, a mere quarter of USA’s defense budget for the same year. The world watches closely at China’s defense budget to provide some clues as to the strategic intentions of the country.