China set its lowest annual GDP target in decades on March 5, as Premier Li Keqiang warned of a “grave and uncertain” outlook against the backdrop of the coronavirus, a property slump and uncertainty over the war in Ukraine.
Li announced the unusually modest target of around 5.5 percent growth for 2022 – the lowest since 1991 – in his speech opening the annual session of China’s rubber-stamp parliament.
Addressing about 3,000 members of the National People’s Congress in Beijing, Li said the world’s second-largest economy “will encounter many more risks and challenges, and we must keep pushing to overcome them.”
The target was based on a need to maintain stable employment, basic living needs and “guard against risks,” Li said.
China’s economy is a key driver of global growth and crucial domestically for the ruling Communist Party, which has based its legitimacy on delivering steady economic expansion and improved standards of living.
The party is deeply concerned over social instability in its huge population should economic growth dip too low.
Economic stability must be a “top priority,” Li added.
Chinese economic growth has slowed markedly in recent years from its past boom decades, when annual expansion sometimes exceeded 10 percent.
China has been largely successful in controlling the virus and limiting its economic impact.
But the economy has been hit lately by a cascading property market slump, government regulatory crackdowns on the property, tech and financial sectors, and smothering containment measures to nip virus outbreaks but which have dampened consumer demand.
China’s economy last year handily exceeded the official target of at least six percent growth, expanding by 8.1 percent, but the pace slowed significantly in the second half.