China's GDP Goal, Defense Budget, Disorderly Capital: NPC Update

China will target gross domestic product expansion of around 5% for 2023, Premier Li Keqiang said in his final government work report to the National People's Congress — the annual parliamentary gathering. Economists said the target is a conservative goal.

The meeting, which kicked off Sunday morning and will conclude on March 13, promises a shakeup at the top echelons of government that could further consolidate President Xi Jinping's power. Other major targets announced by Li, who is set to be replaced by Xi ally Li Qiang, are as follows:

• Setting a budget deficit at 3% of GDP

• 12,000,000 more urban jobs

• Plans to sell special local government bonds worth 3.8 trillion Yuan ($550 billion).

• READ: China Sets Modest Growth Target as Economic Risks Persist

In other major announcements at the NPC, China said its defense spending would grow by 7.2% this year, the fastest pace since 2019, and at the same time it will seek 'peaceful reunification' with Taiwan. With US tech curbs biting, Beijing reiterated a 'whole nation' stance to achieve self-reliance. Xi's government also said it'll target disorderly expansion in the property sector.

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NPC spokesman Wang Chao announced Saturday that the legislative session will close on the morning of March 13, making it slightly longer than last year's pandemic-shortened event. Key NPC/CPPCC events that have been announced so far include:

• March 6 - Delegates review government work report. NDRC holds presser

• March 7 -- Qin Gang, the new foreign minister, holds briefing. State Councilor Xiao Jie will deliver an explanation report on reform plans for government institutions in the afternoon.

• March 10, 2010: The country's president-elect and vice president will be elected. Xi is likely to win a third term in China's presidency.

• March 11-12: Delegates will decide on the country's next premier and ministers, including central bank governor. Li Qiang is expected to replace Li Keqiang as the new premier when the decision is announced on March 11. Vice premiers and state councilors will be appointed on March 12 along with ministers and the PBOC governor

• March 13 — NPC closing session. New premier's press conference likely to follow

Latest developments: (Time-stamps are local time in Beijing):

China's High-Quality Development (8:04 p.m)

President Xi attended a meeting of deputies from Jiangsu province on the first day of the Congress and talked about 'high-quality development' in the country, state-run CCTV reported.

That involves enhancing self-reliance in technology, fostering small and medium-sized enterprises, and building globally influential centers for innovation, he said.

The Chinese leader also addressed the need to ensure a stable supply of grain and other key produce, and to expand channels for farmers to make money.

Crackdown on Carbon Data Fraud (12:39 p.m.)

Authorities in China will crack down on carbon data fraud as they try to strengthen the nation's ailing emissions trading system ahead of a planned expansion.

Low prices, low liquidity, and allegations of data manipulation have plagued the market which includes over 2,000 major power stations and covers more emissions than any other trading platform.

The National Development and Reform Commission reported to the annual Beijing parliamentary gathering on Sunday that officials will increase statistics and account carbon emissions and crack down data fraud.

‘Whole Nation' Stance on Tech (12:11 p.m.)

China pledged to pool together all of the nation's resources to achieve self-reliance in technology, underscoring the government's determination to secure key breakthroughs in areas such as semiconductors as tensions with the US escalate.

Outgoing Premier Li Keqiang, in his government work report that was released on Sunday at the beginning of the annual National People's Congress, reiterated the need for a "whole nation strategy" to beat Washington in basic scientific research and advanced technology. He made these remarks days after Biden's administration had blacklisted more Chinese companies from the chip and gene industries.

Li stated that the new system of mobilizing resources nationally should be improved. "We need to better leverage the government's role in pooling resources for key technological breakthroughs. Enterprises should be the main actors in innovation.

GDP Goal Seen by Analysts as a Sign of Caution (12:09 p.m.)

China's 2023 economic growth target is conservative. This suggests that the government is aware of potential challenges and is willing to take into account the risks associated with a recovery that is steadily gaining momentum.

That's according to economists who weighed in after Sunday's announcement that Beijing will target gross domestic product expansion of around 5% for the year. The goal is somewhat more muted than expectations among economists that China would set a growth target that was higher than 5%. It's also below the median estimate for an expansion of 5.3% this year, according to economists surveyed by Bloomberg.

More Mega Renewable Projects (10:46 a.m.)

China will push ahead with the expansion of massive desert-based solar and wind projects and upgrade power grids as part of its priorities for 2023, the National Development and Reform Commission said in a report to the annual parliamentary gathering in Beijing on Sunday.

The nation will begin construction on a second batch of wind and solar bases and facilitate construction approvals for a third set of projects, it said.

China Seeks ‘Peaceful Reunification' With Taiwan (10:37 a.m.)

China largely kept its language regarding Taiwan the same in an annual report to the nation's legislature, suggesting that President Xi Jinping is maintaining its policy toward the self-ruled island even as global tensions increase.

'We should promote the peaceful development of cross-Strait relations and advance the process of China's peaceful reunification,' Premier Li Keqiang said in a work report to the National People's Congress, which kicked off in Beijing on Sunday.

China Defense Spending to Rise 7.2% (10:11 a.m.)

China said its defense spending would grow by 7.2% this year — the fastest pace since 2019 amid increasing tensions with the US on a range of issues, including Taiwan.

According to the annual report of the Ministry of Finance, the military expenditures are expected to increase to 1.55 trillion Yuan ($225 billion) by 2023. This was released Sunday at Beijing's National People's Congress.

Spending on the People's Liberation Army has increased by at least 6.6% each year for the past three decades, keeping pace or often exceeding economic growth, although the figure is far surpassed by the US's military expenditures.

China Promises to Restrict 'Unregulated Expansion' in the Property Market (9:45 a.m.).

China said it will target disorderly expansion in the property sector, as policy makers seek to strike a balance between boosting economic growth and defusing financial risks.

Efforts should be made to prevent 'unregulated' expansion in the property market to promote its stable development, Premier Li Keqiang said at the annual session of the National People's Congress — the Communist Party-controlled parliament.

Li stated that the government had also promised to provide 'effective risk prevention, mitigation' for high-quality developers as well as help them strengthen their balance sheets.

China Vows to Control Fossil Fuels (9:33 a.m.)

China, the world's top clean energy market, will aim to 'move faster to develop a new energy system,' and plans to prioritize efforts to control fossil fuel consumption, according to a government work report.

Development targets for this year include 'continued reductions in energy consumption per unit of GDP and in the discharge of major pollutants,' the document said.

The report stated that "We leveraged coal's role as a major source for energy, increased advanced coal production capacities, and increased support for power plants, heat-supply enterprises, to ensure energy supplies."

China Aims to Increase Grain Output (9:22 a.m.)

China plans to increase grain production to more than 650 million tons this year, according to a government work report. The country also aims to keep grain acreage at stable level and promote production of oilseed crops, the report said.

China Sets a Moderate Growth Target (9:10 AM)

China has set a modest target for economic growth in the new year. This is a sign that top leaders of the nation are still worried about their country's recovery given low consumer confidence, falling exports, and a still-stable housing market.

Beijing will target gross domestic product expansion of around 5% for 2023, Premier Li Keqiang said in his final government work report to the National People's Congress — the annual parliamentary gathering — on Sunday, according to state media Xinhua News Agency. The budget deficit goal was set at 3% of GDP for 2023, Xinhua said.

The GDP target compares to last year's goal of around 5.5%, which China missed by a large margin after Covid outbreaks and restrictions, along with the property crisis dragged GDP growth to just 3%.

Limited Access to Foreign Media (8:30 a.m.

Although this is the first NPC/CPPCC since the end of Covid Zero, some foreign journalists complained about a lack of access to the event. Organizers maintained some elements of the restrictions that were put in place during the pandemic, including obligatory PCR testing and quarantines.

On Sunday, reporters lucky enough to get the very limited spots for the opening ceremony had to stay at a hotel the night before to gain access to the Great Hall of the People — although quarantine rules were enforced less rigorously than was before.

A significant number of seats in the section reserved for the press was taken up by reporters from developing countries mainly in Africa and Asia, some of whom were flown to China to partake in journalism training arranged by the Chinese government, which included attending the two sessions. Journalists were forbidden to take in items including second phones, selfie-sticks and power banks.

Wang Yang Delivers Opening Speech at CPPCC (Saturday 3:50 p.m.)

During a speech delivered at the opening ceremony of the CPPCC, Wang Yang, chairman of the political advisory body and a former vice premier, said the CPPCC has worked to unify Chinese within the country and overseas over the past five years.

The CPPCC has strengthened communications with groups in Taiwan and encouraged Hong Kong delegates to speak out on issues including the drafting and implementation of the national security law, he said, adding that it will continue to unify all groups tightly around the Communist Party.

China Defends Military Budget (Saturday 1:52 p.m.)

China must increase its military budget in order to address 'complex security problems,' according to a top Chinese official. This is amid increasing geopolitical tensions between China and the US.

'The increase in defense spending is needed for meeting the complex security challenges and for China to fulfill its responsibilities as a major country,' said Wang Chao, spokesman of the National People's Congress. He spoke at a press conference in Beijing on Saturday, a day before the official kickoff of the key political event.

Geely and Xiaomi Chiefs Talk (Saturday).

Li Shufu is the founder of Zhejianggeely Holding group Co. in China. He said that China's new-energy vehicle industry, which is the largest by sales and output, is growing sustainably through increased recycling of components such as lithium batteries. Li said that the government's policies, such as tax cuts on purchases, have allowed the industry and its supply chains to continue technological breakthroughs.

According to local media reports, he called for the government to revive domestic carbon trading by adding more products to it and bringing more participants.

Lei Jun, chairman of Xiaomi Corp., a smartphone and home appliance maker that has ventured into EV manufacturing, is submitting proposals to the NPC on improving the regulation of car-related data and promoting a 'car culture' that encourage the growth of China's auto industry. Lei, an NPC representative, also proposed to push for the development of biorobotics, according to his post on Weibo, a Twitter-like social media platform.

With assistance from Lucille Liu and Luz Ding. Dan Murtaugh. Hallie Gu. Li Liu, Yujing Liu. Kevin Ding. Felix Tam. Emma Dong. Gao Yuan. Zheng Li. Phila Siu.

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