China has moderated its goals of economic growth and military spending for this year, in the midst of a climate that it describes as "more serious and more complicated". In his annual report on government tasks – similar to the nation state speech – Chinese Premier Li Keqiang announced a growth target for the year between 6 and 6.5%, with inflation that will be around 3%. The growth was 6.6% last year, the most modest in 28 years. The defense budget line, which up to 2016 has exceeded two figures for the year, will increase by 7.5% in 2019, compared to 8.1% in 2018.
"We must be prepared for a hard struggle, do not underestimate the difficulties we face, but our confidence should not be weakened," said the prime minister in his speech, which opens the annual session of the National People's Assembly ( ANP), the Chinese legislature, in the Great Hall of the People of Beijing.
But, before the nearly 3,000 delegates from all over China, Li also made it clear that the Chinese government does not propose any radical change and will continue the policies it has implemented so far. "Against the background of a complex international climate that is changing rapidly, we must maintain our strategic focus and continue our work in accordance with the plans and objectives we have set ourselves".
Facing the winds against a commercial war with the United States, weaker growth and a complex global climate in which populism and protectionism are growing and demand decreases, the Chinese government plans to increase its public spending this year by 6.5. %, up to 23 trillion yuan (3.03 billion euros). Moreover, as stimulus measures, it promises to reduce the tax burden of companies, in particular through the reduction of VAT and their social security contributions, of about 2 billion yuan (260 million euros). The budget deficit will grow slightly, by 0.2%, to remain at 2.8%.
During the annual session, which will continue until March 15, the ANP plans to discuss and approve a new law on foreign investment, as part of the measures to try to resolve the trade war. The United States asks China for a better trade balance, the end of the forced transfer of technology and guarantees on the protection of intellectual property.
In a press conference to present the main objectives of the legislative session, ANP spokesperson Zhang Yesui recalled that for months the negotiating groups of the two countries held rounds of talks to try to reach an agreement. "We hope the two sides will continue their consultations and get an agreement that benefits everyone," he said.