China's five-year plan until 2020 gets green light

China's annual parliament concluded Wednesday by endorsing the Communist Party's economic growth targets and the broad agenda for the next five years, as its premier vowed to push ahead with reforms.

Some 2,900 delegates to the 12-day National People's Congress approved Premier Li Keqiang's state-of-the-nation annual report, as well as other resolutions in a series of quick-fire votes widely seen as rubber-stamping exercise in the one-party state.

Ninety-eight per cent voted in favour of the annual report, which set a 2016 economic growth target of 6.5 to 7 per cent and a rise of 7.6 per cent in annual military spending.

It was the first time in years that the planned rise in military spending came under 10 per cent, compared with an increase of 10.1 per cent in 2015 and 12.2 per cent the previous year.

Almost all the delegates similarly voted for the party's 13th five-year plan for social and economic development until the year 2020.

China, the world's most populous country, is facing a daunting challenge of maintaining economic growth as its population grows and ages.

The economy grew last year by 6.9 per cent, its weakest performance in more than quarter of a century.

The five-year plan calls for the creation of more than 50 million new urban jobs, improvements to expressways and high-speed railways, and to have the science-and-technology sector make up 60 per cent of economic growth.

It also reconfirmed existing targets to double per capita income and gross domestic product by 2020 from 2010 levels.

“Urbanization is the largest source of domestic demand ... There is a lot of room to boost industrialization and urbanization," Li said at a press conference following the parliament's closing ceremony. 

The premier said the government wants to avoid layoffs while fighting overcapacity, which will focus at the outset on the coal and steel industries. 

“Some deep-seated problems have become more acute, which contribute to the downward pressure," Li said. "There are both difficulties and hopes for China's economy, but there are more hopes than difficulties."

The government has a 100-billion-yuan (15.3-billion-US-dollar) fund for helping sacked workers. “If needs be, it could be increased," he said. "Local governments also need to do their jobs."

Local governments are facing mounting debts in China, although the true scale of the problem is difficult to judge due to the part played by loans from so-called "shadow banks."

Critics have noted that the new five-year plan puts heavy emphasis on the role of government planning, rather than to support innovation and let market forces rule.

The congress, decried as a "rubber stamp" parliament by critics, is showcased by the party as evidence of its development of "socialist democracy."

The meetings are followed closely by global markets for signs on the direction of the world's second-largest economy.

Li also addressed China's foreign relations in his rare press conference.

Regarding Taiwan, which recently elected a new president seen as less friendly towards Beijing, he said “peaceful development of cross straits relations is in the interest of both sides.”

Russia, he said, had a "close political relationship" with China, even as ties between Russia and the West had soured over the crisis in Ukraine and the conflict in Syria.

Last update: Wed, 16/03/2016 - 10:33
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