China Units Financial Development Goal of ‘Over 6 %’ This Yr

BEIJING – A year after China was hit by the coronavirus, the government on Friday promised a robust return to economic growth of “over 6 percent,” a signal that China is ready to do whatever it takes to keep the world’s second largest economy going strong.

When top officials laid out a confident vision for China’s rise in the coming years, they also drew a hard line on the perceived threats to the Communist Party’s authority in Hong Kong to curtail democratic elections there after anti-government protests engulfed the city in 2019.

Commitment to relatively rapid economic growth is a positive sign for the world economy. It suggests that Beijing is ready to free up money to keep the economy going rather than slowing down to cope with the ever-increasing debt. That means the Chinese economy will continue to buy much of what the world makes, including iron ore and computer chips.

China’s growth target is for the virus to have all but stopped within its borders and for the number of cases in countries like the US and India to have fallen sharply in recent weeks.

China’s goal for this year could easily be achieved. It is well below what many Western economists expect from the Chinese economy. They forecast around 8 percent growth as industrial goods exports continue to boom while the services sector recovers from a very poor performance last year.

As he announced the target, China’s Prime Minister Li Keqiang warned of the imminent risks.

“As the coronavirus continues to spread around the world, instability and insecurity in the international landscape are mounting, and the global economy continues to face major challenges,” Li said as he presented a report on the work of the government to the National People’s Congress, at the beginning of its weeklong annual meeting.

Congress also stands ready to step up China’s crackdown on Hong Kong, building on a national security law Beijing imposed on the city last year. This year, delegates will vote in favor of a proposal to drastically reduce democratic competition in local elections in the former British colony. The planned revision of the electoral laws in Hong Kong would make it very difficult for the advocates of democracy to assume or even deny positions of power.

China will rewrite the rules for electing Hong Kong’s top local official, known as the chief executive, and its legislature, said Wang Chen, a political bureau member who specializes in legal affairs, in a speech.

He said Beijing will revise membership of the territory’s electoral committee, a body that elects the general manager, whose roughly 1,200 members are selected by groups that are usually loyal to Beijing and the city’s business elite.

China will also introduce a new, separate process to screen candidates for different levels of the Hong Kong electoral office. Mr. Wang said the changes would ensure that only solidly loyal followers of China could be included in the government of the territory.

“Make sure that control is firmly in the hands of forces who love their country and Hong Kong,” he told Congress.

The forthcoming legislation follows a process that has already deterred most democratic supporters in Hong Kong from speaking out against Beijing. “They want to consolidate it so that the dissidents or Democrats cannot experience a comeback,” said Steve Tsang, director of the SOAS China Institute in London.

Mr. Li, the Prime Minister, made a firm statement on Hong Kong, saying Beijing would not tolerate any threat to its sovereignty in the territory.

He also took a hard line across Taiwan – the democratically ruled island that Beijing claims as its territory – using language that seemed harsher than the government used in previous labor reports. Taiwan’s current president, Tsai Ing-wen, has resisted Beijing’s demands to accept the mainland’s definition of island status.

“We will continue to be very vigilant and resolutely deter any separatist activity that seeks Taiwan independence,” said Li.

However, Mr. Li’s message was heavily focused on China’s recovery from the pandemic that plunged the country into its worst crisis since the Tiananmen of 1989 just over a year ago.

The growth forecast for this year shows that China expects a remarkable rebound after last year when the government abandoned setting an annual growth target for the first time in decades due to the uncertainties of the pandemic. Ultimately, China posted 2.3 percent growth in 2020, much slower than its usual 6 percent or more pace in recent years, but by far the best performance of any major economy.

However, China’s growth last year was even more unbalanced than usual. The country was actually losing ground in its goal of moving away from its reliance on exports and debt-driven infrastructure investments and relying more sustainably on domestic consumption. As in most countries during the pandemic, travel and leisure spending in China fell over the past year.

He promised to cut taxes on the smallest businesses, many of which are tiny businesses in towns and villages. However, infrastructure spending will continue very quickly. Mr. Li only announced a token cut – 2.7 percent – on the issue of special purpose bonds this year, which are mainly used to finance infrastructure projects and have almost tripled in the last two years.

Mr. Li promised on Friday that he would intensify efforts to increase consumption. “By focusing on improving people’s wellbeing, we will increase demand and promote better matching between consumption and investment,” he said.

His government also released a draft long-term development plan that set goals for transforming the country into a technologically advanced and environmentally friendly power over the five years and beyond.

Chris Buckley reported from Sydney, Australia. Austin Ramzy and Vivian Wang reported from Hong Kong. Albee Zhang, Claire Fu, and Liu Yi did research.

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