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Even as China faces a potential Trade War over tariffs with the United States, Beijing has pledged to make domestic demand its main economic driver. It has its annual growth targets to about 5 percent, and along with that, it has called for a 7.2 defence budget hike due to rising regional tensions.
On Wednesday, Chinese Premier Li Qiang delivered a government work report, maintaining China's expected economic growth target for 2025 at around 5%, the same as last year. Li Qiang acknowledged that China's economy faced "a complex and severe situation with increasing external pressure and internal difficulties" in the past year, but under the leadership of the CPC Central Committee with Xi Jinping as the core, China's economy was "generally stable, with steady progress", and the main goals and tasks of social and economic development for the whole year were successfully completed. Voice of America quoted Lynn Song, Chief economist for Greater China as saying that external demand was the key to driving China's economic growth last year, not only promoting exports but also driving manufacturing activities. But the economist warned that this year's U.S.-China tariff war could lead to weaker external demand, while the low public sentiment mentioned by Li Qiang in the report would also affect domestic demand, making it more challenging to achieve the 5% growth target this year. The reports submitted by the Ministry of Finance of China show that China's defense expenditure in 2025 will be about USD 245.6 billion, a year-on-year increase of 7.2%, the same as the previous two years, both of which are the highest in recent years, said Voice of America. VOA quoted Su Ziyun, director of the Institute of Defense Strategy and Resources at the Taipei-based Institute for National Defense and Security, as saying that China's military expenditure growth mainly comes from investment in naval and air combat capabilities, and also symbolizes its efforts to move from a land power to a maritime power. This can be seen from the exercises held in the waters between Australia and New Zealand, between China and Vietnam, and in the Taiwan Strait on the eve of the two sessions. (ANI)
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