Times are more difficult and uncertain than ever, Premier Li warns of the People’s Congress. Billions of dollars are planned against the consequences of the corona crisis. The military budget is also increasing strongly.
China wants to fight the weakening of the economy by the pandemic with the new corona virus by massively increasing government spending. “These are exceptional measures for unusual times,” Prime Minister Li Keqiang said on Friday at the start of the annual meeting of the People’s Congress in Beijing on the necessary sharp increase in government debt. He warned that the epidemic “is not yet over,” even though China has made great strides in the fight against the Sars CoV-2 virus.
Xi Jinping at the People’s Congress in China: a new security law for Hong Kong was submitted for voting at China’s most important political meeting. (Source: Reuters)
The approximately 2,900 MPs all sat in the Great Hall of the People wearing face masks, while the communist leadership on the podium did without face masks. For the first time in almost two decades, the Prime Minister did not set a goal for the growth of the second largest economy this year in his accountability report. He referred to the “great uncertainties” regarding the Covid 19 pandemic and the global economic crisis. China faces factors “that are difficult to predict”.
No growth target for the first time in 30 years
“At present and in the near future, China will face challenges like never before,” Li Keqiang swore in to the delegates. The economy slumped 6.8 percent in the first quarter, after growing 6.1 percent last year within the government’s guidance of 6.0 to 6.5 percent. Due to the declining income and rising expenditure, government debt will rise above the critical threshold of three percent of economic output to 3.6 percent. Special bonds and a further reduction in taxes and duties are planned.
National People’s Congress in Beijing (archive photo): Hundreds of party cadres will meet again in the great plenary hall this year. (Source: Xinhua / imago images)
The Chinese government is also not announcing a growth target for the economy for the first time in decades due to the difficult environment. This emerges from the published work report by Li Keqiang. Since 1990, the government has given a gross domestic product growth target each year.
Despite the difficult economic situation, China will increase its military expenditures strongly this year by 6.6 percent compared to the previous year. The defense budget had been higher than economic growth before. However, the increase is lower than in the previous year, when the military budget was increased by 7.5 percent. Against the backdrop of tensions with the United States and Beijing’s threats to democratic Taiwan, the expansion of the Chinese military is being watched with concern.
Prime Minister defends corona action
Due to the spread of the corona virus, the annual meeting in March had to be postponed for the first time in the recent history of the People’s Republic. By rescheduling the meeting, China, as the country of origin of the pandemic, is demonstrating that it has made great strides in the fight against the virus. Nevertheless, there were strict safety precautions to avoid infections among the travelers. Delegates had to undergo two corona tests. The meeting was shortened from just under two weeks to just one week.
Li Keqiang: The Chinese Prime Minister must show success to the People’s Congress. (Source: Xinhua / imago images)
The Prime Minister defended China’s handling of the virus. It took an “open, transparent and responsible attitude” in international cooperation and provided information “on time”. He reacted to allegations, in particular by US President Donald Trump, who initially covered up the outbreak, did not cooperate sufficiently and thus contributed to the spread of the virus worldwide.
Principle “one country, two systems”
The prime minister also campaigned for the communist leadership’s controversial plans to enact its own security law for Hong Kong. The pro-democratic opposition in the Chinese Special Administrative Region fears that this law will become the target. It is expected to target activities that Beijing perceives to be subversive or that may seek independence. Critics see an attack on the “one country, two systems” principle that the former British crown colony has been managed autonomously since it was returned to China in 1997.
The People’s Congress is to discuss the law and give its Standing Committee a mandate for adoption at the end of the session on May 28. The approach is particularly controversial because Beijing is dealing with the Hong Kong parliament, which has so far been unable to agree on such a law. The plans were put on hold in 2003 when more than half a million people protested. The project should fuel the demonstrations in Hong Kong, which has seen protests against Beijing’s growing influence since last summer.