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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John McDonnell's Mao zinger spectacularly backfires

The shadow chancellor quoted from Mao's Little Red Book in his response to George Osborne's autumn statement.

John McDonnell's response to George Osborne's autumn spending review has quoted from a surprising source: Mao's Little Red Book.

The Little Red Book is the name commonly given to Quotations from Chairman Mao Tse-tung, a book that collected together the - you guessed it - quotations of the former Chairman of the Communist Party of China. It was widely distributed after the cultural revolution during the personality cult of Mao, alongside Lenin's The Three Sources and Three Components of Marxism and Engel's Socialism: Utopian and Scientific. 

In response, George Osborne opened the copy of the book and said "it's his [McDonnell's] personal signed copy".

Aside from chapters on labour, women and the army, the book also collects quotations on topics like "Imperialism and All Reactionaries Are Paper Tigers". Mao's legacy as a political theorist is somewhat contested given the approximately 18 to 45 million people who died during China's "Great Leap Forward", a process of rapid industrialisation instigated by the Communist Party in the late 1950s. The death toll from Mao's cultural cleansing program is hotly debated, but sources generally agree over half a million people died as a direct result.

There has been some suggestion that in terms of "not offering obvious spin opportunities to your opponents", the decision to quote Mao may not have been McDonnell's finest.

I'm a mole, innit.