BEIJING (AP) — China on Saturday cut its annual economic growth target to its lowest level in decades as Beijing struggles to reverse a slump at a time when Russia’s war on Ukraine is pushing up oil prices and roiling the global economy.
The ruling Communist Party will aim for “around 5.5%” growth this year, down from last year’s 8.1% expansion, the country’s No. 2 leader, Premier Li Keqiang, said in a report to an annual meeting of its ceremonial legislature. It noted commodity prices are surging but made no mention of the reason: the attack by Beijing’s friend, Russian President Vladimir Putin.
“Achieving this goal will require arduous efforts,” Li said during a 55-minute speech at the opening of the National People’s Congress in the Great Hall of the People in central Beijing.
Surging energy costs due to the war add to pressure from anti-coronavirus controls and a crackdown on debt in China’s vast real estate industry that caused economic growth to fall to 4% over a year earlier in the final quarter of 2021. This year’s growth forecasts by the International Monetary Fund and private sector analysts are as low as 4.3%.
Manufacturing has been disrupted by a “zero tolerance” COVID-19 strategy that has at times suspended access to some major cities, as well as weak demand for Chinese exports and shortages of power and processor chips. The premier gave no indication Beijing might relax its anti-virus strategy that has helped to keep infection numbers low but at a rising cost.
President Xi Jinping’s government has tried to distance itself from Putin’s war by calling for dialogue but refused to criticize the attack. Beijing has denounced trade and financial sanctions on Moscow and says Washington is to blame for the conflict.
Li indirectly acknowledged the war’s impact on prices of oil, wheat and other commodities, saying they “remain high and prone to fluctuation,” but gave no indication why.
“All of this is making our external environment increasingly volatile, grave and uncertain,” Li said.
His report focused on the economy, social welfare and other domestic issues, in contrast to Tuesday’s State of the Union speech by President Joe Biden, which emphasized Russia’s attack on Ukraine and international efforts to pressure Putin to stop.
The ruling party is trying to steer the world’s second-largest economy toward slower, self-sustaining growth based on consumer spending instead of trade and investment but was alarmed by last year’s abrupt slowdown.
The slide was triggered by tighter controls on borrowing by real estate developers that caused construction and housing sales to plunge.
Ruling party leaders responded by announcing a “policy pivot” in December toward shoring up growth and away from longer-term initiatives aimed at cutting debt and carbon emissions.
“We must make economic stability our top priority,” Li said. He said that should “occupy an even more prominent position.”
The premier promised to “ensure food and energy security” with adequate supplies of grain and electric power. He said Beijing will step up exploration for oil, gas and minerals and improve its system of stockpiles of essential raw materials.
Li also promised to crack down on trafficking of women and children and protect their “lawful rights.” The status of women who are mistreated and possible additional protections is expected to be discussed by the legislature following the widely publicized case of a woman who was found chained in a shed in eastern China.
No growth target was announced in 2020 after much of the economy was shut down to fight the virus. Last year’s target was “over 6%.” This year is the first time since the 1990s the official target is below 6%.
The ruling party has promised tax cuts for entrepreneurs who generate jobs and wealth. Banks have been told to lend more. The government is injecting money into the economy through higher spending on building public works.
The ruling party is promising to build more solar, wind and other renewable power resources. But it also has eased pressure on utilities to restrain growth of climate-changing carbon emissions by burning less coal.
Energy efficiency will be “assessed with appropriate flexibility,” Li said.
Turning to COVID-19, Li said China needs to “constantly refine epidemic containment” but gave no indication Beijing might ease its “zero tolerance” strategy. He called for accelerating vaccine development and “strengthening epidemic controls” in cities where travelers and goods from abroad arrive.
All the delegates attending the opening session of the legislature wore face masks. The meeting, which normally lasts two weeks, has been curtailed to one week again this year because of the pandemic.
Also Saturday, the government announced a 7.1% increase in its military budget, up from last year’s 6.8% rise. China has the world’s second-highest military budget after the United States and is investing in long-range, nuclear-capable missiles and other weapons to extend its power beyond its shores.
Li affirmed the ruling party’s insistence that Hong Kong “should be governed by patriots,” a key element in a campaign to crush pro-democracy activism in the former British colony.
The premier indicated no change in stance toward Taiwan, the island democracy that Beijing claims as part of its territory and has threatened to invade. The two sides have been ruled separately since splitting in 1949 after a civil war but have multibillion-dollar trade and investment ties.
Russia’s invasion of Ukraine has prompted suggestions Beijing might be more likely to use force against Taiwan if it sensed a lack of resolve on the part of the United States and its allies. The ruling party has offered no signs of changing its avowed approach of gaining control of Taiwan by peaceful means, without giving up the military option.
Beijing will “advance peaceful growth of relations across the Taiwan Strait and the reunification of China,” Li said. “We firmly oppose any separatist activities seeking ‘Taiwan independence’ and firmly oppose foreign interference.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
