Chinese locomotive of the world economy is cautiously picking up speed

Why is the annual spring meeting of the Chinese parliament a year more and more important event for the world, and now especially? At least for two reasons.

First: at the session, it will become clear whether the Chinese economy will again, as in 2009-10, be the engine of global growth, that is, help other countries overcome the viral crisis.

And the second: everyone is interested in imagining how ready China is for further confrontation with the United States at least until the presidential elections in November – that is, it is simply a matter of military spending.

Big and small sensations on these topics are expected from last Friday (when the session solemnly opened) until the very end of the event, that is, until the end of next week.

But already in advance, the world media meticulously analyzed all the opinions and leaks from China itself and the surrounding area: in the end, we are talking about the health of the world’s first economy.

(The parliament is traditionally primarily occupied with the economy; foreign policy declarations are in second place there.)

Speaking of health and pandemics, Beijing propaganda emphasized the very fact of the opening of the session. For obvious reasons, she was detained for 78 days.

But now several thousand parliamentarians have flocked to Beijing, if we count the delegates of the All-China Assembly of People’s Representatives together with colleagues from the analogue of our Public Chamber – the People’s Political Consultative Council.

They sit sometimes in masks, but lively and side by side: it is clear that there is a demonstration of the country’s return to normality.

Although this is already in order, zoom-diplomacy is snapping away, for example, no one stopped preparing for the joint SCO and BRICS summits in our Northern capital in July (communication will be completely natural), and Donald Trump wants to organize the same lively meeting G7 at home in the USA.

As for China’s economic growth: in the first quarter, GDP fell by 6.8%. Industrial production – by 8.4%. However, the economy is reviving in an explosive way (everyone damn wants to work).

Estimates of private expert economists (for example, China International Capital Corporation): according to the results of the year, China will give an increase of 2.6%. And this is a sensation – which of the major economies in the world now generally wants to go plus?

But there was an even greater sensation. On the first day of the session, making a report, the head of the Chinese government, Li Keqiang, announced: this year we decided to completely abandon the proclamation of target figures (in terms of GDP). Because the risks and challenges, both external and internal, are of an unprecedented scale.

This happened for the first time in several decades. This can be understood in different ways. Challenges are both pressure from the United States and the need to understand what is happening with the economy after quarantine injuries.

In general, now the point is not to set records, but to stabilize. But if the records (that same 2.6 %) are still there, then a new sensation will be born.

But the prime minister very clearly outlined the parameters of the very stabilization. It is necessary to create nine million jobs in cities to keep unemployment no higher than six percent.

And yet – a long-standing goal is confirmed: to overcome extreme poverty in 2020. This refers to the village, the remaining one thousand depressed villages. Apparently, this plan was recognized as realistic.

The role of the locomotive of world development can be played in different ways. China may well allow itself to increase imports.

Exports to countries such as the United States (waging a full-scale economic war with China) will fall, but it would fall anyway – who expects any achievements from the United States or Europeans today?

In addition, there are no obstacles to the development of high-tech projects with countries in the framework of the “Belt and Way” project, which includes Russia. In addition, China is lucky – oil and gas prices so far are conducive to growth.

Any growth is possible if you pour a lot of money into the economy. But here, the financiers of the world are watching China especially carefully: too much money means inflation and various events with the renminbi.

But the fact that just from this year the new rules for foreign financial investors have started working, removing the limits on the volume of investments from them, it turned out on time, because new money will come to the country. Not from the USA – it’s not necessary, the world is big.

In terms of finance, landmarks are indicated as follows: a deficit of 141 billion US dollars, not more than 3.6% of GDP. Domestic loan for the same amount. Encouraging banks to reduce business debt by 353 billion. Inflation is not more than 3.5%. Few countries in the world are capable of holding their systems in this order this year.

Military spending is a separate and interesting topic. On the one hand, the military suffered additional burdens and expenses to combat the pandemic (and the army even took part here).

And this is not to mention the fact that American military activity in the South China Sea has quadrupled over the year. On the other hand, in a difficult year, military spending can be cut back and all efforts to restore the civilian sphere can be thrown.

In recent years, these expenditures in China have grown as the overall growth of the economy has never gone beyond two percent of GDP. So, now they should grow slightly, if at all. In any case, officially and in dollar terms, last year they amounted to 177.6 billion (second place in the world), and in the USA – 732 billion, and 3.4% of GDP.

Does China bury military spending in other budget items? But even independent estimates, such as the Stockholm International Peace Research Institute, give a figure of 261 billion. To the level of the United States far.

Although plans to get four aircraft carrier groups by 2050 instead of the current two have not been canceled. This story will become clearer during the session.

In the meantime, the bottom line is the belief that it is in this difficult year that poverty will prevail in China. The outside world, following the course of the Beijing parliamentary meetings, understands that this is also an indicator of the country’s internal strength.