Chinese officials are notorious for their jargon-riddled and painfully long speeches. On Monday (March 5) premier Li Keqiang kicked off the annual gathering of China’s top legislative body, the National People’s Congress (NPC), with his government policy report. It took him nearly two hours to read through the 36-page document that lays out a bunch of important economic and budget targets for this year. (Here’s the full text in Chinese.)
To save yourself some time, here are four charts on the main takeaways from Li’s speech:
Li set China’s real GDP growth target for 2018 at “around 6.5%,” unchanged from 2017 despite that the Chinese economy grew a surprising 6.9% last year. Tellingly, Li also omitted last year’s aim for growth to be “higher if possible in practice.” Most analysts have read it as a sign that Beijing is more comfortable with slower economic growth. That makes sense with Beijing’s emphasis on tackling financial risks, given the country’s mounting debt level, which is worth 274% of its GDP (pdf) according to one estimate.
Meanwhile, China’s fiscal deficit target has been lowered to 2.6% of GDP from 3% last year, the first reduction since 2012. The move implies that the government will provide less support to the economy.
Li also announced that China will cut capacity in steel and coal by 30 million metric tons and 150 million metric tons respectively this year. For years, Beijing has pushed to reign in excessive industrial production and air pollution. The latest annual goal will put China well ahead of its long-term plans in overcapacity cuts.
China’s 2018 defense budget is up 8% from last year, the biggest annual increase in three years. The $175 billion budget is the world’s second largest defense budget after the US, though it is only about a quarter of US outlays. In recent years, the Chinese military has made noticeable advances in equipment ranging from stealth fighters to hypersonic missiles.