New Delhi China seeks to achieve a growth rate of around 5% for 2024, the same as last year, Premier Li Qiang said on Tuesday, admitting that the world’s second largest economy faced insufficient demand, overcapacity, and “lingering risks”.

Li, who is President Xi Jinping’s number two, unveiled the unchanged growth target – described as a sign of confidence and commitment to high-quality development by Chinese media – as China faces sapping economic headwinds including a weak property market and consumption that has remained sluggish since the Covid-19 pandemic.

Li also unveiled China’s annual military budget for 2024, which he said will increase by 7.2% to roughly 1.67 trillion yuan or $230 billion.

Both these numbers – the country’s GDP target rate and its defence outlay – released annually by China during the yearly, currently ongoing, session of its rubber-stamp parliament, the National People’s Congress (NPC), are closely tracked globally for two reasons. First, the authoritarian Communist Party of China’s (CPC) legitimacy is based on delivering steady economic growth and social stability to its 1.4 billion citizens. And second, the official amount spend on defence is taken as a measure of the country’s fast expanding military prowess and ambition. Neighbouring countries such as India are especially wary about China’s strategic ambition as it pumps in money into defence innovation and expanding naval reach.

In fact, it is for the fourth time that China’s official defence outlay has crossed the $200 billion mark, the first being in 2021, amid rising geo-political tensions and China’s increasing military belligerence over Taiwan and in the South China Sea region besides the longstanding boundary problem with India.

Economy: Multiple challengesThe government work report, read out by Li, noted multiple difficulties and challenges the country faces, “…such as an insufficiently solid foundation for sustained economic recovery and growth and a lack of effective demand”.

“Achieving this year’s targets will not be easy, so we need to maintain policy focus, work harder, and mobilise the concerted efforts of all sides,” Li said.

“In setting the growth rate at around 5%, we have taken into account the need to boost employment and incomes and prevent and defuse risks,” Li said, according to a transcript released by the official news agency, Xinhua.

The report outlined the key areas where the Chinese economy is struggling: Risks in real estate, local government debt, and in the small and medium-sized financial institutions sector.

China aims to create over 12 million jobs in urban areas in 2024 and keep the surveyed urban unemployment rate at about 5.5%, the report said.

Defence: ‘Peaceful reunification’ reference to Taiwan droppedChina’s military budget – second only to the US globally — has more than doubled since President Xi Jinping took over as the general secretary of the CPC. The increase mirrors Beijing’s stand hardened on Taiwan, a self-ruled democracy claimed by China as a breakaway region to be unified by force if necessary, and on the multiple disputes in the South China Sea region.

“Since Xi became president and commander-in-chief more than a decade ago, the defence budget has ballooned to 1.67 trillion yuan ($230 billion) this year from 720 billion yuan in 2013,” Reuters reported.

The defence budget outlay in the work report was well above the government’s economic growth forecast for this year.

The report also dropped the mention of “peaceful reunification” of Taiwan with Li saying Beijing would “resolutely oppose separatist activities aimed at Taiwan independence” and “unswervingly advance the great cause of the motherland’s reunification”.

Ahead of the unveiling of the report, a Chinese government spokesperson had said: “China has maintained reasonable and steady growth of its defence spending, consistent with its sound and steady economic and social development, to promote synchronised growth of defence capability and economic strength.”

“I wish to stress that compared with major military powers, such as the United States, China’s defence spending is quite low, whether as a percentage of GDP or total budget, or in terms of per citizen or per service member expenditure,” the spokesperson added.

That may be true. What is also true is that China is expanding its armed forces at a “breathtaking pace”, according to the US.

“The Asian country now has the world’s biggest navy by number of ships and is adding to its fleet of aircraft carriers. China, the US and Russia are the only nations producing fifth-generation fighter jets,” Bloomberg said in a report on Tuesday.