Commentary
The China’s National People’s Congress (NPC) concluded its weeklong meeting on March 11. Despite being known as a rubber stamp body, it is closely monitored as the policies it approves provide insights into the leadership’s priorities for the upcoming year.
While Premier Li Qiang’s extensive work report covered various crucial topics like education, healthcare, urbanization, and environmental issues, foreign observers were particularly interested in the discussions on the economy and military.
Concerning the economy, as China’s 14th Five-Year Plan comes to an end, the growth drivers that propelled China to become the world’s second-largest economy seem to be losing momentum. The projected “about 5 percent” GDP growth in the work report is viewed as aspirational rather than realistic, with some Chinese economists privately acknowledging that a 2 percent growth is more feasible.
The official 5 percent target set for 2024 was also met with skepticism by experts. The real estate sector, comprising a quarter of the GDP, remained sluggish with declining home prices. The job market for recent graduates raised concerns, and electric vehicle prices saw a 6 percent decrease year on year.
While global concerns focus on inflation, China is grappling with deflation. The latest data from China’s National Bureau of Statistics showed a 0.7 percent decline in the consumer price index. To boost the economy, the CCP has introduced measures like lowering credit costs and offering subsidies to consumers for upgrading their appliances. It remains to be seen if these actions will have the desired impact.
Two weeks before the congress, in a move signaling a shift in CCP leader Xi Jinping’s approach towards entrepreneurs, he hosted a forum with notable figures, including previously criticized individuals like Jack Ma.
The CCP aims to revive the economy through technological advancements, with hopes pinned on initiatives like DeepSeek, an AI startup that poses a challenge to foreign competitors. However, challenges like monetizing AI and access to advanced semiconductors remain hurdles.
The military sector presents distinct challenges, with a reduced military presence at the NPC meeting sparking curiosity. Despite a decrease in numbers, next year’s military budget sees a 7.2 percent increase, raising concerns about Beijing’s intentions.
Recent developments in China’s military capabilities, such as new aircraft carriers and stealth fighters, have drawn attention. The budget increase is viewed as moderate given the complex security landscape, including tensions with neighboring countries.
China’s activities like seabed mapping and military maneuvers around Taiwan and the Philippines continue to raise regional security concerns.
China has been flexing its military muscles in the East China and South China seas, engaging in gray zone operations to assert its dominance without triggering a direct response. These operations have involved harassing Japanese fishermen and conducting live-fire naval exercises near Australia, gradually expanding Chinese military presence in contested areas. This strategy, described as a “death by a thousand cuts” by a Wall Street Journal analysis, aims to wear down opponents and extend Chinese control.
However, these gray zone operations carry the risk of unintended escalation into armed conflicts as neighboring countries seek to defend themselves against Chinese aggression. The discrepancy between China’s slowing economic growth and its increasing military budget, as highlighted in the recent NPC report, indicates a growing instability within the regime. This unsustainable trajectory further deepens internal contradictions, making long-term success elusive. As cautioned by former CCP leader Deng Xiaoping and demonstrated by the Soviet Union’s experience, a strong military cannot compensate for a weak economy.
It is important to note that the views expressed in this article are the author’s opinions and may not necessarily align with those of The Epoch Times.
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