China lags India on growth, but will splurge on defence
BEIJING: China set its economic growth forecast for 2018 at “around 6.5%” in a bid to maintain financial stability amid worries over rising debt and unveiled its largest rise in defence spending in three years.
BEIJING : China on Monday set its economic growth forecast for 2018 at “around 6.5%” in a bid to maintain financial stability amid worries over rising debt and hiked its defence spending to $175 billion, almost four times India’s outlay. For the second consecutive year, the closely watched growth target for the world’s second largest economy remained at the lowest since 1992, when China grew at 6%.
China’s defence budget — the world’s second-largest defence outlay behind the US — is set to grow this year by 8.1% to 1.11 trillion yuan or $175 billion, up from 7% in 2017. This is the country’s largest increase in defence spending in three years. China’s economic growth rate has slowed down in recent years because of falling demand for its goods and overcapacity in its manufacturing and steel sectors.
But the focus of China’s growth is on quality and not on quantity any more, experts said.
“While growth handily surpassed 2017’s target with a 6.9% expansion that was the first acceleration since 2010, economists forecast a moderation to 6.5% this year amid the ongoing deleveraging drive and trade tensions with the Trump administration,” a Bloomberg report said on the growth forecast.
China’s official media said this year’s defence spending would be higher than the increase of 7.6% in 2016 and 7% in 2017. It is only the third time since 2013 that the hike has been in single digits. However, the outlay was almost four times India’s allocation of a little more than $43 billion for 2018-19.
THE ANNOUNCEMENT OF CHINA’S EXPENDITURE ON DEFENCE IS CLOSELY FOLLOWED AS AN INDICATOR OF ITS STRATEGIC INTENT AS BEIJING EXPANDS ITS INFLUENCE WORLDWIDE.
The announcement of China’s expenditure on defence is closely followed as an indicator of its strategic intent as Beijing expands its influence worldwide. The defence outlay is particularly important for several of its neighbours – including India – with whom China has territorial disputes. It is also widely believed that China’s actual spending on defence exceeds the allocation that is made public.
China will “advance all aspects of military training and war preparedness, and firmly and resolvedly safeguard national sovereignty, security, and development interests,” Premier Li Keqiang told the opening session of the National People’s Congress (NPC) or the legislature.
“Faced with profound changes in the national security environment”, the absolute leadership of the military by the Communist Party must be observed, and unity between the government, the military and the people must always be“strong as stone”, he added. Last year’s 7% increase in China’s defence budget was the lowest in seven years. In real terms, the budget of the People’s Liberation Army (PLA), the world’s largest armed forces, last year was around the $ 146 billionmark, a quarter of the US defence outlay.