China looks to green economy to hit GDP growth target of 7.5 per cent

Country also puts focus on consumers to drive growth.

At the annual meeting of the National People's Congress in Beijing, Chinese premier Wen Jiabao announced that the growth target for the PRC would remain at 7.5 per cent, the same as last year. In 2012, China only just made the target, as growth slowed to its most leisurely rate in 13 years, expanding by "just" 7.8 per cent.

While the growth goal remains the same, China has lowered its inflation goal to 3.5 per cent, and is planning to increase its budget deficit by 50 per cent to £128bn to "maintain support for economic growth", according to Jiabao.

Separately, the National Development and Reform Commission reported its own targets, aiming for an 8 per cent increase in foreign trade (down from 10 per cent).

As well as the economic targets, China also used the draft budget to announce an increase in military spending, growing 10.7 per cent to £76.41 billion. The Financial Times' Kathrin Hille adds:

Despite the increasingly tense regional climate, experts agree that the days of the sharpest defence spending hikes are over.
This year’s 10.7 per cent increase is roughly in line with last year’s 11.2 per cent hike and a 12.7 per cent increase in 2011.
These figures compare with annual average increases of 16.5 per cent between 2000 and 2009 and 15.7 per cent between 1990 and 1999, according to a forthcoming article by Adam Liff and Andrew Erickson, two US experts on Chinese military affairs.

China's insistence that it will hit the 7.5 per cent growth target indicates the country is not concerned that it may experience a "hard landing" — a quicker-than-expected decline from its current levels of growth to the developed-nation norm of 2-3 per cent. The country has, however, experienced some problems following its current model of growth, which Reuters describes as "investment-driven" and "export-oriented".

As the rest of the world struggles on through the most prolonged depression in living memory, China's export strength has started to look like a double-edged sword, exposing it to weakness it would otherwise be inured to. And its investment-driven growth has also led to massive "ghost cities", hundreds of thousands of new homes built with no-one living in them.

Instead, Jiabao seemed to highlight a model of development which fits with the trend started by the proposal of a Chinese carbon tax, telling the assembly:

The state of the ecological environment affects the level of people's well-being and also posterity and the future of our nation. We should adhere to the basic state policy of conserving resources and protecting the environment and endeavor to promote green, circular and low-carbon development.

But the country still has massive internal issues to overcome before it can really change tack on growth. Local government in China has tremendous independence, and will need to get on board with the plans. Reuters reports:

In a separate document, the Ministry of Finance said it was raising the quota for bonds issued by local governments to 350 billion yuan in 2013, compared with 250 billion yuan in 2012.
It also pledged to further strengthen regulation of local government debt and curb irregular financing activities.

The government has its work cut out.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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