China unveils its 14th Five-year plan with modest economic growth target above 6%

China kicked off its annual session of parliament on Friday as it unveiled its next five-year plan with a slew of measures including overhauling Hong Kong’s electoral system in a further blow to the pro-democracy opposition in the city and unexpectedly set an economic growth target for 2021. 

Premier Li Keqiang flaunted the achievements as China overcame the coronavirus pandemic, in an hour-long speech to over 5,000 delegates gathered in the Great Hall of the People, all of them inoculated with a Sinopharm COVID-19 vaccine. Presenting the government work report, he laid out ambitions to solidify the economic recovery, cut emissions, invest in innovation and improve a worsening demographic outlook. 

However, consumer spending remains constrained, investment growth lacks sustainability, and “the foundation for achieving our country’s economic recovery needs to be further consolidated,” he said.

Premier Li Keqiang set a modest growth target of more than 6% this year for the world’s second-largest economy, said to be easily achievable, defying expectations that China would refrain from setting a goal given global uncertainty caused by the pandemic. China grew by 2.3% last year, its weakest in 44 years, but was still the only major economy to expand as it largely vanquished the domestic spread of the novel coronavirus that first emerged in the country in late 2019. 

Beijing also dealt a severe blow to pro-democracy opposition by proposing a legislation that would tighten its grip on Hong Kong by making changes to the electoral



committee that chooses the city’s leader.  China also unveiled a comprehensive plan to upgrade its manufacturing capabilities by 2025 sharpening its global competitiveness amid a trade and tech dispute with the US. The plan focuses on are earth and special materials, robotics, new energy vehicles, software and high-tech advanced manufacturing strengthening the country’s position in global supply chain.

For the first time, Beijing announced that its defence spending will be over 200 billion USD, up by 6.8% from 2020, up just slightly from last year’s budget increase and broadly following the government’s economic growth forecast. 

China announced at the fifth plenary session in October 2020 that by the 100th anniversary of the founding of the People’s Liberation Army (PLA) in 2027, the centennial goal of military development should be achieved, and by 2035, the country should have achieved modernization of the national defense and armed forces.

Beijing pledged to lift annual research and development spending by more than 7% until 2025, highlighting a commitment to become self-sufficient as the country clashes with the United States and other countries over technology policy. The Government Work Report also set a slew of economic and social development goals for 2021, including creating 11 million new urban jobs, keeping CPI growth of around 3 percent and cutting energy consumption per unit of GDP by around 3 percent. The report also mentioned about drawing up an action plan for carbon emissions to peak by 2030.