China announced its lowest growth target in thirty years as the country seeks to shore up its slowing economy after a difficult year and the fallout of the situation in Ukraine, reports the Financial Times. The growth target of 5.5% reflects lower growth expectations in 2022 compared with pre-pandemic rates as Beijing maintains its strict Covid measures, enforces its “common prosperity” policy to reduce inequality, and contends with a debt-fueled real estate crisis.
Premier Li Keqiang announced the target at the opening of the National People’s Congress, China’s annual meeting of its rubber stamp parliament in Beijing. It follows year-on-year growth of just 4% in the fourth quarter of 2021 and he stressed that “achieving this goal will require arduous efforts.”
The budget included a sharp increase in defense spending, which rose 7.1% to RMB 1.45 trillion ($229 billion)—its fastest pace in three years—as China accelerates the modernization of its armed forces and the US strengthens its military presence in the Asia-Pacific.