According to Poldermans, the budget is 7.2%, which is one percentage point higher than last year. “And that’s about $200 billion, a quarter of the US budget.” Poldermans notes that this is the officially announced amount or percentage. “Maybe many more will come out, but of course we won’t find out.” Poldermans agrees that there is an arms race with the Americans.
China’s defense budget is about $200 billion
China now says it has an economic growth target of 5%. Poldermans doesn’t know if China can fulfill that ambition this year. So they had a 5.25% target last year. That ended up being just 3 percent.’
Challenges
According to the sinologist, Xi and his new team of ministers face enormous challenges after three years of strict covid measures such as sharply reduced consumption and sharply reduced state revenues. A major task will be to regain trust, Poldermans thinks. “Particularly in the private sector, which has been quite annoying in recent years. And that’s where most of the economic growth will have to come from.
“Big cities are struggling with a 20% youth unemployment rate”
Weak private sector
China’s private sector is grappling with many bankruptcies and large companies such as Alibaba and Tencent and the well-known real estate company Evergrande are heavily restructuring. The latter company, for example, has laid off 90 percent of its employees, while large cities are grappling with youth unemployment of around 20 percent. “These are very serious problems that you cannot solve in a very short period of time.”
Unclear course
It is not yet clear what course China will take. For example, Xi Jinping has made a number of serious mistakes in recent years, the question is whether the party’s interference with society will continue or whether the economy and stability will take priority. This last recommendation is contained in the report of the outgoing prime minister.
While new prime minister Chang also comes from Xi’s sleeve, Poldermans hopes for a different sound at the top of the party. Xi Jinping will be officially named president this Friday, after which all other official appointments will follow.