China lags India on growth, but will splurge on defence
: 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 unveiled its largest rise in defence spending in three years.
For the second consecutive year, the growth target for the world’s second largest economy remained at lowest since 1992 when China grew at 6%.
China’s economic growth rate – which continues to be among the highest in the world – has slowed down in recent years by falling demand for its goods across the world and overcapacity in manufacturing and steel.
But the focus of China’s growth is on quality and not on quantity anymore, 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 defence budget—the world’s second-largest defence outlay behind the US though by a large margin —meanwhile is expected to grow by 8.1% this year to 1.11 trillion yuan or $175 billion, up from 7% in 2017.
China’s defence budget now stands at more than three times that of India’s.
The official media said the increase though higher than the last two years, continues to be in single digits since 2013, following an increase of 7.6% in 2016 and 7% in 2017.
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.
In 2017, China increased its defence budget by 7%, the lowest increase in seven years and second year in a row in which the hike was below the double digit mark.
BEIJING