China’s government signalled more stimulus is on the cards by setting an aggressive economic growth target, calling for confidence amid rising domestic strains and global instability stemming from the crisis in Ukraine.
While the growth goal of about 5.5 per cent for this year is the lowest in more than three decades, it’s above consensus forecasts closer to 5 per cent and far higher than the International Monetary Fund’s projection of a 4.8 per cent expansion.
Premier Li Keqiang vowed at the opening of the National People’s Congress to “step up implementation” of monetary policy and stabilise house prices.
The slump in China’s huge property market and sporadic outbreaks of coronavirus have been a drag on the world’s second-largest economy, a key source of global demand. Growth slowed to 4 per cent in the final quarter of 2021, before an increase in geopolitical tensions caused by Russia’s invasion of Ukraine roiled financial markets and stoked commodity prices.
Shoring up growth is of political significance to the Communist Party and President Xi Jinping, who is expected to make an unprecedented bid to stay on as leader for a third term at a key party meeting later this year. Officials have highlighted economic stability as a top priority and urged faster spending from local governments.
“Comprehensively judging the situation at home and abroad, the risks and challenges facing the country’s development have increased significantly this year,” Mr Li told delegates to the Congress, a meeting of the country’s Communist Party-controlled parliament.
“The harder things get, the more confident we must be.”
Fiscal spending will climb 8.4 per cent in 2022, including a more than 7 per cent boost to China’s defence budget. The language around monetary policy suggests the central bank will cut interest rates multiple times, said Zhou Hao, senior emerging markets economist at Commerzbank.
His base case is one 10 basis-point cut in the one-year policy rate in the second quarter, with the possibility of more.
“The growth target of 5.5 per cent is aggressive, implying that the government is willing to do more to arrest the property slump,” said Raymond Yeung, chief economist for Greater China at Australia and New Zealand Banking Group.
“The Ukraine crisis presents a new external risk, notably food-energy security. This cannot be addressed by interest rate or reserve requirement rate cuts. The authorities will need to launch more measures to address the supply side constraints.”
China’s monetary stimulus puts it in sharp contrast with the US and other developed nations, which are hiking or preparing to hike interest rates to curb rampant inflation. Beijing kept its inflation target unchanged at around 3 per cent for this year, although recent consumer price data has been more subdued than that.
“Compared to previous rounds of macro-policy adjustments by developed nations, China’s capacity to respond to external shocks has increased significantly,” said Song Li, a senior official at the State Council Research Office.
The message from the National People’s Congress is clear – China’s government is determined to prevent growth slipping too much this year. The 5.5 per cent growth target – down from 6 per cent in 2021 – signals an intent to stabilise an economy facing fierce pressures from a property slump and new risks from the Russia-Ukraine war.
The budget targets look conservative on the surface – but leave substantial room for stimulus that could be even more forceful than the support it delivered in 2020 to cushion the pandemic blow.
Economists said the ability of China to meet its growth target this year will largely depend on whether policy steps to stabilise the housing market are effective. Dozens of Chinese cities have made it easier for residents to obtain mortgages or lowered down payments required for housing since the beginning of the year to encourage more home sales.
Much will also depend on whether Beijing can encourage local officials to launch more infrastructure projects.
“China set a target that requires some effort to achieve, unlike last year, which was too low and weakened local governments’ motivation to do things,” said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered.
“The target is still within the range of China’s potential growth rate, and requires policy support and efforts by local governments.”
“China has very large room to expand effective investment,” Liu Rihong, a senior official at the State Council Research Office, said on Saturday in Beijing.
“Expanding investment at the current stage does not mean China is returning to its old path of extensive development and relying on big-ticket projects to boost economic growth.”
The government plans to reduce its main measure of the fiscal deficit this year to 2.8 per cent of GDP from last year’s target of 3.2 per cent even as it accelerates government spending. Jacqueline Rong, deputy chief China economist at BNP Paribas, estimates around 3-4 trillion yuan of unspent funds from previous years will boost government income this year.
Investment, especially infrastructure investment, will be the most important and reliable driver to stabilise growth this year
Bruce Pang,
head of macro and strategy research at China Renaissance Securities Hong Kong
“Fiscal support for the economy will remain strong even though the budget deficit doesn’t expand,” she said.
Mr Li reiterated Beijing’s commitment to controlling overall debt levels in the economy, and said the amount of bonds available for local governments to fund specific projects would be set at 3.65 trillion yuan, the same as last year. The government will also set up a fund to ensure financial stability and prevent systemic risks, he said, without giving details.
The central bank has already cut interest rates this year and vowed to keep policy flexible and responsive to changing economic conditions. The government hasn’t set a GDP target under 6 per cent since 1991. No target was set in 2020, when the pandemic caused growth to slow to 2.2 per cent. The economy expanded 8.1 per cent last year.
“The target of around 5.5 per cent growth is not easy to achieve, and requires more proactive policy support,” said Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong. “Investment, especially infrastructure investment, will be the most important and reliable driver to stabilise growth this year.”
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20OneOrder%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20March%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Tamer%20Amer%20and%20Karim%20Maurice%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Cairo%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3E82%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Series%20A%3C%2Fp%3E%0A
Other must-tries
Tomato and walnut salad
A lesson in simple, seasonal eating. Wedges of tomato, chunks of cucumber, thinly sliced red onion, coriander or parsley leaves, and perhaps some fresh dill are drizzled with a crushed walnut and garlic dressing. Do consider yourself warned: if you eat this salad in Georgia during the summer months, the tomatoes will be so ripe and flavourful that every tomato you eat from that day forth will taste lacklustre in comparison.
Badrijani nigvzit
A delicious vegetarian snack or starter. It consists of thinly sliced, fried then cooled aubergine smothered with a thick and creamy walnut sauce and folded or rolled. Take note, even though it seems like you should be able to pick these morsels up with your hands, they’re not as durable as they look. A knife and fork is the way to go.
Pkhali
This healthy little dish (a nice antidote to the khachapuri) is usually made with steamed then chopped cabbage, spinach, beetroot or green beans, combined with walnuts, garlic and herbs to make a vegetable pâté or paste. The mix is then often formed into rounds, chilled in the fridge and topped with pomegranate seeds before being served.
The specs: 2017 Dodge Ram 1500 Laramie Longhorn
Price, base / as tested: Dhxxx
Engine: 5.7L V8
Transmission: Eight-speed automatic
Power: 395hp @ 5,600rpm
Torque: 556Nm @ 3,950rpm
Fuel economy, combined: 12.7L / 100km
Global state-owned investor ranking by size
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Canada
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Managing the separation process
- Choose your nursery carefully in the first place
- Relax – and hopefully your child will follow suit
- Inform the staff in advance of your child’s likes and dislikes.
- If you need some extra time to talk to the teachers, make an appointment a few days in advance, rather than attempting to chat on your child’s first day
- The longer you stay, the more upset your child will become. As difficult as it is, walk away. Say a proper goodbye and reassure your child that you will be back
- Be patient. Your child might love it one day and hate it the next
- Stick at it. Don’t give up after the first day or week. It takes time for children to settle into a new routine.And, finally, don’t feel guilty.
MATCH INFO
Real Madrid 2
Vinicius Junior (71') Mariano (90 2')
Barcelona 0
The biog
Favourite car: Ferrari
Likes the colour: Black
Best movie: Avatar
Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy
UAE currency: the story behind the money in your pockets
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
Smishing: The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
* Nada El Sawy
The specs: 2018 Alfa Romeo Stelvio
Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
KILLING OF QASSEM SULEIMANI
more from Janine di Giovanni
How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
