Li Keqiang’s Government Work Report 2018: Where China is heading?

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This year premier Li Keqiang’s government work report on 5 March 2018 has been presented amidst a lot of political churnings in China marked by the proposed amendments in the two-term limit for the president and vice president, thus setting the stage for Xi Jinping to stay in office as long as he wishes, and also incorporating his thought on Socialism with Chinese Characteristics for the New Era in the constitution. No wonder right in the beginning, Li Keqiang mentioned some of the key concepts propounded by Xi Jinping such as ‘five in one’, ‘four comprehensives’ and his thought that is guiding the entire nation towards a ‘moderately prosperous society.’

Premier Li’s report is divided into three parts as usual: 2013-18 in retrospect; general requirements for economic and social development in 2018 and policy orientation; and proposals for 2018 government work. As regards the economic performance in the last 5 years, Li reported that Chinese economy registered a growth rate of 7.1% catapulting the GDP to 82.7 trillion yuan ($13.6 trillion) from 54 trillion yuan ($8.5 trillion) in the year 2013. With this the share of Chinese economy in the global economy reached 15% from the previous 11%, and contributed almost 30% to the global economic growth according to Li. Government revenues increased from 11.7 trillion yuan ($1.8 trillion) to 17.3 trillion yuan ($2.7 trillion).  Some 66 million new jobs were created as the service sector continues to increase its share in the national economy. The ratio of service sector in the GDP jumped to 51.6% from the 45.3% of the year 2013. As the individual incomes rose by around 7.4% annually, 130 million Chinese visited abroad.

The flagship project Belt and Road initiative was pronounced to have yielded results, as China initiated a multilayered connectivity program inside and outside China. Inside China alone, high speed railways were extended almost three times from a mere 9000 kilometers in 2013 to 25,000 kilometers in 2018. Expressways were taken to 1.36 million kilometers from 960,000 kilometers in 2013. A total of 1.27 million roads were built in the countryside in the last five years. China built 46 new airports, and initiated work on 122 water conservancy projects. China invested heavily and achieved success in some of the major innovations such as manned spacecraft, deep sea exploration, quantum communications and large aircrafts etc. High-speed rail network, e-commerce, mobile payment, Internet + etc. have been widely integrated into all walks of life. Li reported that the energy and water consumption per unit of GDP has fallen to more than 20%; steel and coal production has been decreased by 30 and 130 million tons respectively, thus reducing the release of major pollutants in the environment substantially.

As far as the year 2018 is concerned, GDP growth has been projected at about 6.5%. Li has intended to create 11 million urban jobs in this year and restrict the urban unemployment rate at a maximum 4.5%. The budget deficit is projected to be 2.38 trillion-yuan accounting for 2.6% of the GDP. Li Keqiang reported that the general manufacturing sector will be completely opened up, and sectors such as telecommunications, medical services, education, elderly care, and new-energy vehicles will be expanded.

As regards the national defense, Premier Li has increased military budget for 2018 to $173 billion, a 8.1% rise. China is the second largest spender on military after the US albeit the US spends over $700 billion on defense. Li told the deputies that “We will stick to the Chinese path in strengthening our armed forces, advance all aspects of military training and war preparedness.” Though the spending commensurate with China’s economic growth which in the last five years grew at an average rate of 7.1%, however, China’s reclamation activities in the South China Sea, it’s border faceoff with India, and off late acquiring military bases abroad has made people wary of China’s rise albeit China plans to further reduce some 300000 of its army personnel bringing down the strength of its army to around 2 million. During the 19th Party Congress last year, president Xi vowed to build a world-class fighting force by 2050 and put China at the world ‘centre stage’.

Finally, the Chinese premier talked about major power diplomacy with Chinese characteristics. He mentioned of China successfully holding the Belt and Road Forum in Beijing, the G 20 in Hangzhou, and BRICS summit in Xiamen. Twice in his speech, he also invoked president Xi Jinping’s phrase of building communities of shared destiny, and pledged to play a constructive and responsible role in the world affairs. He said China will promote coordination and cooperation among major countries, deepen friendships and achieve common development with its neighbours, and enhance unity and cooperation with other developing countries. As regards the question of Taiwan, he said, China promotes the peaceful growth of cross-Strait relations on the basis of the 1992 Consensus, and advance China’ s peaceful reunification. In a warning to Taiwan, he said we will resolutely safeguard the sovereignty and territorial integrity of our country and will never tolerate any attempt or act of splitting up “Taiwan’s independence.”