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.

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Ansbach puts Europe's bravest politician under pressure

Angela Merkel must respond to a series of tragedies and criticisms of her refugee policy. 

Angela Merkel, the Chancellor of Germany, is supposed to be on holiday. Two separate attacks have put an end to that. The first, a mass shooting in Munich, was at first widely believed to be a terrorist attack, but later turned out to be the actions of a loner obsessed with US high school shootings. The second, where a man blew himself up in the town of Ansbach, caused less physical damage - three were seriously injured, but none killed. Nevertheless, this event may prove to affect even more people's lives. Because that man had come to Germany claiming to be a Syrian refugee. 

The attack came hours after a Syrian refugee murdered a pregnant Polish woman, a co-woker in a snack bar, in Reutlingen. All eyes will now be on Merkel who, more than any other European politician, is held responsible for Syrian refugees in Europe.

In 2015, when other European states were erecting barriers to keep out the million migrants and refugees marching north, Merkel kept Germany's borders open. The country has resettled 41,899 Syrians since 2013, according to the UNHCR, of which 20,067 came on humanitarian grounds and 21,832 through private sponsorship. That is twice as much as the UK has pledged to resettle by 2020. The actual number of Syrians in Germany is far higher - 90 per cent of the 102,400 Syrians applying for EU asylum in the first quarter of 2016 were registered there. 

Merkel is the bravest of Europe's politicians. Contrary to some assertions on the right, she did not invent the refugee crisis. Five years of brutal war in Syria did that. Merkel was simply the first of the continent's most prominent leaders to stop ignoring it. If Germany had not absorbed so many refugees, they would still be in central Europe and the Balkans, and we would be seeing even more pictures of starved children in informal camps than we do today. 

Equally, the problems facing Merkel now are not hers alone. These are the problems facing all of Europe's major states, whether or not they recognise them. 

Take the failed Syrian asylum seeker of Ansbach (his application was rejected but he could not be deported back to a warzone). In Germany, his application could at least be considered, and rejected. Europe as a whole has not invested in the processing centres required to determine who is a Syrian civilian, who might be a Syrian combatant and who is simply taking advantage of the black market in Syrian passports to masquerade as a refugee. 

Secondly, there is the subject of trauma. The Munich shooter appears to have had no links to Islamic State or Syria, but his act underlines the fact you do not need a grand political narrative to inflict hurt on others. Syrians who have experienced unspeakable violence either in their homeland or en route to Europe are left psychologically damaged. That is not to suggest they will turn to violence. But it is still safer to offer such people therapy than leave them to drift around Europe, unmonitored and unsupported, as other countries seem willing to do. 

Third, there is the question of lawlessness. Syrians have been blamed for everything from the Cologne attacks in January to creeping Islamist radicalisation. But apart from the fact that these reports can turn out to be overblown (two of the 58 men arrested over Cologne were Syrians), it is unclear what the alternative would be. Policies that force Syrians underground have already greatly empowered Europe's network of human traffickers and thugs.

So far, Merkel seems to be standing her ground. Her home affairs spokesman, Stephan Mayer, told the BBC that Germany had room to improve on its asylum policy, but stressed each attack was different. 

He said: "Horrible things take place in Syria. And it is the biggest humanitarian catastrophe, so it is completely wrong to blame Angela Merkel, or her refugee policies, for these incidents." Many will do, all the same.