China projects its GDP growth target for 2023 at 'around 5%'

China projected GDP growth target for year at 'around 5%' as the National People's Congress (NPC) – China’s national legislature started Sunday, making a modest forecast in an effort to revive an economy battered by COVID-19 and Beijing’s controversial zero-covid policy.

This was announced by the outgoing Premier Li Keqiang, as he delivered a government work report at the opening session of the 14th NPC, laying out economic priorities and a new budget, including plans for defense amid continued tensions with the West including in Taiwan strait and the war in Ukraine.

China also unveiled its annual defense budget for 2023, which saw an increase by 7.2% to roughly 1.55 trillion yuan ($224 billion), according to a draft budget report released alongside the NPC opening. This is the second year in a row that the annual hike in defense budget has exceeded 7%, amid rising geopolitical tensions.

In 2022, China increased its defense spending by 7.1%. NPC spokesperson on Saturday signaled at increasing its defense budget, the second biggest after the US, citing "complex security challenges".

This is the first “Two Sessions” since Chinese leader Xi Jinping secured a norm-breaking third term as the General Secretary of the Chinese Communist Party in October 2022.

“China’s economy is staging a steady recovery and demonstrating vast potential and momentum for further growth,” Li said in his address, which emphasized China’s focus on ensuring stable growth, employment and prices amid global inflation. The economy added more than 12 million urban jobs last year, with the urban unemployment rate falling to 5.5%, according to the work report.

The world's second-largest economy last year posted one of its weakest growth rates in decades with a 3% expansion which was well below the government's 5.5% target, as three years of strict COVID-19 controls, real-estate crisis, sluggish consumption and weak demand for China’s exports took heavy toll.

On China’s military, Li Keqiang said, China would modernize its military strength and would work to strengthen the capacity in defence-related science, technology, and industry as after Washington accused Beijing of planning to supply arms to Russia for war in Ukraine.

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