China targets 6% growth in 2021; to spend 3 times India’s on defence
6.8% jump in budget for military to $209 mn is the biggest in 2 years
China’s government has set a conservative economic growth target for this year, shifting its focus from recovery mode to longerterm challenges like reining in debt and reducing technological dependence on the US.
The growth target was set at above 6 per cent, well below economists forecasts, with the budget deficit expected to fall to 3.2 per cent of gross domestic product, Premier Li Keqiang said Friday at the opening of the National People’s Congress. China projected defence spending growth of 6.8 per cent this year, the largest gain since 2019, amid tensions with the US and key neighbours.
The target for 2021 stands in contrast to the 8.4 per cent expansion that economists predict, allowing officials to focus on longer-term ambitions, like developing hitech industries and supporting consumer spending.
Military expenditure is expected to climb to 1.35 trillion yuan ($209 billion) in the coming year, the Ministry of Finance said on Friday. The figure, released at the start of the annual National People’s Congress meeting in Beijing, compares with a projected rise of 1.8 per cent in budgeted fiscal spending. “We will provide stronger financial guarantees to vigorously support the modernisation of national defence and the armed forces, and help China’s defence capabilities rise in step with its economic strength,” the Ministry of Finance said in a report. A Bloomberg calculation of the latest defence budget number shows spending for this year will actually rise 6.9 per cent. Friday's increase is over three times higher than India's defence budget of about $65.7 billion (including pensions).
Last year, China allocated about $196.44 billion, according to the state-run Global Times. The defence spending boost comes after China sparred with India on its border and as the nation seeks to modernise its military to make it more competitive with the US China, the only major economy in the world to expand last year, also announced on Friday an economic growth target of above 6 per cent for the year, well below what economists had forecast.
“We will boost military training and preparedness across the board, make overall plans for responding to security risks in all areas and for all situations, and enhance the military’s strategic capacity to protect the sovereignty, security and development interests of our country,” Chinese Premier Li Keqiang said in an annual report to the national legislature.