- China has announced its lowest economic growth target in over three decades, setting it at 4.5-5 per cent, reflecting an acknowledgement of structural challenges in its economy.
- Premier Li Qiang presented this target during the 'two sessions' political gathering, highlighting the need to shift from an investment-led to a consumption-led growth model.
- The country faces significant headwinds, including weak domestic consumption, a prolonged property market slump, rising local government debt, and a shrinking population.
- Beijing's economic plan includes a budget deficit of 4 per cent of GDP, increased social welfare spending on pensions and medical insurance, and a 7 per cent rise in defence expenditure.
- These policy adjustments are being made amidst geopolitical complexities, such as US tariffs and the impact of US-Israeli actions on key oil suppliers like Iran, on which China heavily relies.
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