BEIJING — Plowing previous world anxieties over the battle engulfing Ukraine, China set its economic system on a course of regular growth for 2022, prioritizing development, job creation and elevated social welfare in a yr when the nationwide chief, Xi Jinping, is poised to assert a brand new time period in energy.
The annual authorities work report delivered to China’s National People’s Congress by Premier Li Keqiang on Saturday didn’t even point out Russia’s invasion of Ukraine, and it took an implacably steady-as-it-goes tone on China’s financial outlook.
The implicit message seemed to be that China may climate the turbulence in Europe, and would deal with attempting to maintain the Chinese inhabitants at house contented and employed earlier than an all-important Communist Party assembly within the fall, when Mr. Xi is more and more sure to increase his time in energy.
“In our work this year, we must make economic stability our top priority and pursue progress while ensuring stability,” Mr. Li mentioned.
By asserting a goal for China’s economic system to develop “around 5.5 percent” this yr, Mr. Li bolstered the federal government’s emphasis on shoring up development within the face of world uncertainty from the pandemic and the battle in Ukraine. That purpose is slower than the 8.1 % rebound within the economic system that China reported final yr, however greater than many economists consider the nation can obtain with out huge authorities spending applications.
Mr. Li upset anybody who may need thought he would have something to say about Ukraine. The Chinese authorities’s annual work experiences usually keep away from new bulletins on international coverage, and this yr’s was no exception. Beijing has sought to keep up its partnership with Russia whereas attempting to distance China from President Vladimir V. Putin’s choice to go to battle.
“China will continue to pursue an independent foreign policy of peace, stay on the path of peaceful development, work for a new type of international relations,” Mr. Li mentioned in his report — the closest he got here to a touch upon worldwide developments.
Still, leaders in Beijing additionally signaled — in numbers, relatively than phrases — that they have been making ready for an more and more harmful world. China’s navy finances will develop by 7.1 % this yr to about $229 billion, in response to the federal government’s finances report, additionally launched Saturday. Mr. Li indicated that there could be no slowing in China’s efforts to modernize and overhaul its navy, which incorporates increasing the navy and creating an array of superior missiles.
“While economic development provides a foundation for a possible defense budget increase, the security threats China is facing and the demands for national defense capability enhancement caused by those threats are the driving factors,” Global Times, a Communist Party-run newspaper, mentioned in a report this week that predicted China’s rise in navy spending. “Over the past year, the U.S. also rallied its allies and partners around the world to provoke and confront China militarily.”
In December, the United States Congress accepted a finances of $768 billion for the American navy. But salaries and tools manufacturing prices are far greater within the United States, which has prompted some analysts to counsel that China’s navy finances is quickly catching up in precise buying energy.
The plan Mr. Li outlined means that China values financial development greater than attempting to make doubtlessly painful changes to shift the economic system towards better reliance on home client spending. Beijing has been attempting, with restricted success, to maneuver the economic system away from dependence on debt-fueled infrastructure and housing building.
China had managed to scale back barely final yr its debt relative to financial output. It wanted to take action as a result of this ratio had climbed, in the course of the first yr of the pandemic, to a degree that economists considered unsustainable.
But assembly this yr’s development goal would require extra borrowing, undoing most or all the progress made final yr in lowering the debt burden, mentioned Michael Pettis, an economist with Peking University. He mentioned that it was exhausting to see how China may break its dependence on reaching excessive development targets not less than partly via heavy borrowing.
Mr. Li acknowledged that the Chinese economic system would face challenges this yr, pointing to the sluggish restoration of consumption and funding, flagging development in exports and a scarcity of assets and uncooked supplies. By the final three months of final yr, the economic system was rising solely 4 %.
Part of that financial slowdown mirrored a sequence of presidency coverage shifts aimed toward reining in unsustainable growth in some sectors. Housing hypothesis was discouraged. Stringent limits have been imposed on the after-school tutoring business. And nationwide safety companies imposed tighter scrutiny on the tech sector.
China’s big building business is stalling as house patrons flip cautious, with builders starting to default on money owed. Dwindling revenues from land gross sales have made some native governments extra cautious about constructing extra roads and bridges. Continued lockdowns and journey restrictions to forestall the COVID-19 coronavirus epidemic from spreading have precipitated a downturn in spending at inns and eating places.
Mr. Li gave few clues as to if China would possibly shift away from its stringent “zero Covid” pandemic technique, which has relied on mass testing and occasional lockdowns. He urged officers to deal with native outbreaks in a “scientific and targeted manner.”
The Latest on China: Key Things to Know
He additionally individually alluded to the widespread public outrage that erupted in latest weeks over the kidnapping of ladies and kids. “We will crack down hard on the trafficking of women and children and protect their lawful rights and interests,” he mentioned.
The outcry was set off after a blogger posted footage of a lady seen shackled in a windowless hut in east-central China’s Jiangsu Province, who had reportedly given delivery to eight kids. Official investigators mentioned the lady had been kidnapped in 1998, a discovering that folks on social media mentioned uncovered longstanding issues with bride-trafficking and insufficient protections for ladies. The lady turned an emblem of injustice, and censors have since sought to delete on-line discussions of her. (Mr. Li didn’t point out her.)
To bolster the economic system, Mr. Li issued a authorities finances for this yr that referred to as for further spending, plus the issuance of extra bonds to pay for it.
The central authorities, which has pretty little debt, will enhance by 18 % this yr its transfers of cash to provincial and native governments, lots of that are closely indebted. The provincial and native governments perform a lot of China’s social spending and infrastructure building.
Social welfare and schooling outlays are each set to extend about 10 % this yr. That consists of elevated central authorities help for China’s old-age pension funds, which should help a fast-expanding inhabitants of retirees. The finances additionally consists of heavy spending to assist rural households and to construct extra rental housing.
Many Chinese provinces have set their very own development targets at 7 % or greater, because the Communist Party seeks to reassure the general public that financial growth stays an important purpose, mentioned Feng Chucheng, a companion at Plenum, a political and financial consulting agency in Beijing. “They need to project a picture where the party puts growth targets as a top priority,” he mentioned.
Keith Bradsher reported from Beijing, and Chris Buckley from Sydney. Li You, Liu Yi and Claire Fu contributed analysis.