Why Did China Set a GDP Growth Target of 4.5%-5%?

Also in this edition: Zhang Shengmin tells PLA to 'resolutely obey the commands of Chairman Xi'

The key report on today’s front page is about the opening of the NPC session, with Li Qiang’s presentation of the Government Work Report. The other big story is on Xi Jinping’s meeting with the Jiangsu delegation. I’ve already covered these yesterday. So let’s turn the page.

Page 2: There’s a commentary talking about the emphasis on developing new-quality productive forces, building on Xi’s remarks to the Jiangsu delegation. It argues that:

“Today, China, anchored to the strategic task of developing new-quality productive forces, is witnessing its major economic provinces shouldering the heavy responsibility, with various regions leveraging their comparative advantages and strengths to climb towards higher and newer levels. 今天的中国，锚定发展新质生产力的战略任务，经济大省勇挑大梁，各地发挥比较优势、各展所长，向“高”攀升、向“新”迈进.

Jiangsu, continuously pushing forward manufacturing’s ‘intelligent transformation, digital conversion, and network integration,’ is delivering a ‘hard-core answer sheet’ in building an advanced manufacturing base with international competitiveness; Guangdong, accelerating the construction of the Greater Bay Area International Science and Technology Innovation Center, has seen the ‘Shenzhen–Hong Kong–Guangzhou’ innovation cluster leap to first place globally; Anhui, leveraging its overlapping strategic advantages, has seen both automobile and new energy vehicle output leap to first place nationwide, with its vehicle exports breaking through one million units… Precisely positioning oneself within the national overall situation, identifying one’s advantages through integration into the overall situation, and accelerating the formation of a momentum where a thousand sails race and ten thousand horses gallop, this is precisely the source of our confidence and strength in seizing historical opportunities and achieving greater development. 江苏，持续推进制造业“智改数转网联”，打造具有国际竞争力的先进制造业基地交出“硬核答卷”；广东，加快建设大湾区国际科技创新中心，“深圳—香港—广州”创新集群跃居全球首位；安徽，发挥战略叠加优势，汽车、新能源汽车产量双双跃居全国首位，整车出口突破百万辆……在全国大局中精准定位，在融入全局中找准优势，加快形成千帆竞发、万马奔腾的势能，正是我们抢抓历史机遇、实现更大发展的底气所在、信心所在.

The next bit is important. It draws from Xi’s remarks to the Jiangsu delegation.

During the 15th FYP period, how to ‘consolidate foundations and exert force across the board’? How to effectively respond to an increasingly complex environment and resolve more deep-seated contradictions? How to stand firm amid the rapidly changing international situation? The most critical thing is to firmly grasp technological innovation as this ‘bull’s nose’, practice internal skills and strengthen ourselves, support and drive high-quality development with new-quality productive forces, and use the certainty of our own development to respond to various uncertainties. In this regard, the major economic provinces stand at the forefront of reform and development and are the main front for developing new-quality productive forces. They should rightfully step forward to take responsibility and contribute greater strength. Other provinces should also base themselves on their resource endowments and industrial foundations, actively seizing opportunities for development and skillfully pursuing differentiated development, while also striving to turn weaknesses into strengths. “十五五”时期，如何“夯实基础、全面发力”？如何有效应对更加复杂的环境、解决更多深层次矛盾？如何在风云变幻的国际形势中站稳脚跟？最关键的就是要牢牢抓住科技创新这个“牛鼻子”，练好内功、做强自身，以新质生产力支撑和推动高质量发展，以自身发展的确定性应对各种不确定性。在这方面，经济大省处在改革发展前沿，是发展新质生产力的主要阵地，理应挺膺担当、贡献更大力量。其他各省份也要立足资源禀赋和产业基础，既积极抢位发展、善于错位发展，又致力于把短板变成潜力板.

Also on the page is an article that tells us how one should think about the GDP growth rate goal of 4.5% to 5%. This is an important read. It tells us a bit about the thinking among the leadership around economic policy decision-making.

The article says:

“An expected target, in essence, is not a prediction, but guidance and shaping, primarily taking into account what is needed and what is possible.

Why is it needed? ‘Maintaining within a reasonable range’; sound growth is precisely what healthy development requires. Economic growth is a foundational and comprehensive indicator with strong interconnectedness. Whether it is employment opportunities, education funding, or social security expenditures, everything is related to economic growth. A certain economic growth rate is both a prerequisite for high-quality development and a foundation for improving people’s livelihoods. From the current perspective, economic growth must support goals such as stabilising employment, stabilising the market, and improving people’s livelihoods. From the long-term perspective, it must be aligned with medium- and long-term goals and long-term vision. This year is the first year of the 15th FYP. Based on the goal of achieving ‘per capita GDP reaching the level of moderately developed countries’ by 2035, the average annual growth rate for the next 10 years needs to reach 4.17%. This year’s target is above this, reflecting a proactive and positive attitude of pushing ahead.” 预期目标，本质不是预测，而是引领和塑造，首先考虑的是需要和可能。何以需要？“保持在合理区间”，良性增长，正是健康发展的需要。经济增长是基础性、综合性指标，关联性强。无论是就业机会，还是教育经费、社会保障支出，无不与之相关。一定的经济增速，既是高质量发展的前提，也是民生改善的基础。从当前看，要能支撑稳就业、稳市场、惠民生等目标。从长远看，则要与中长期目标和远景目标相衔接。今年是“十五五”开局之年，按照到2035年实现“人均国内生产总值达到中等发达国家水平”等目标推算，接下来10年年均增速要达到4.17％。今年目标在此之上，体现了往前赶的积极性、主动性.

“Why is it possible? Look up at the sky, and look down at the road; this corresponds to China’s growth potential. Annual total retail sales of consumer goods have exceeded 50 trillion yuan; this is the opportunity of China’s large market. AI enterprises exceed 6,000, and the scale of the core industry has, in just a few years, leapt to the trillion-yuan level; this is the vitality of a global innovation center. Forecasts by market institutions of China’s potential economic growth rate generally fall within, or even above, this range. Firmly grasping high-quality development as the hard truth of the new era, taking reform and innovation as the fundamental driving force, and making good use of the ‘four major advantages’ to allow potential to be fully released, we have confidence, and even more determination. 何以可能？抬头看天，低头看路，这是与我国增长潜力相适应的。年社会消费品零售总额突破50万亿元，这是中国大市场的机遇；人工智能企业超过6000家，核心产业规模短短几年跃上万亿元台阶，这是全球创新中心的活力。市场机构对我国经济潜在增速的预测普遍落在甚至高于这个区间。牢牢把握高质量发展这个新时代的硬道理，以改革创新为根本动力，用好“四大优势”，让潜能充分释放出来，我们有信心，更有决心.

“Why a range? Racing against time and keeping pace with history requires a certain speed, but unrealistic ambitions are also unacceptable. If the target is set too low, it cannot maximise the mobilisation of enthusiasm and easily becomes disconnected from medium-to-long-term plans; if set too high, divorced from objective reality, it can easily breed timidity amid difficulties, or the mindset of ‘seeking speed’ and ‘seeking visibility’. Facing old problems and new challenges, moving forward means confronting greater uncertainty, which also requires greater driving force. For example, the international landscape is undergoing profound changes unseen in a century, with ‘gray rhinos one moment and black swans the next’; likewise, the transformation of growth drivers cannot be achieved overnight, and old and new drivers will coexist for a period of time Preventing risks and adjusting structure both require trading time for space. Implementing a ‘range-based macro-control’ sets a growth floor while also retaining upward elasticity and leaving sufficient room to maneuver, thereby serving the purpose of maintaining the certainty of high-quality development. This also means that achieving this target is by no means easy and requires arduous effort.” 何以区间？同时间赛跑、与历史并进，没有一定的速度不行，也不能好高骛远。目标定低了，无法最大限度调动积极性，容易与中长期规划脱节；定高了，脱离客观实际，则容易滋生畏难情绪，或者“求快”“求显”想法。面对老问题、新挑战，向前发展，面临更多的不确定性，也需要更大的推动力。比如百年变局，“一会儿灰犀牛，一会儿黑天鹅”；又如动能转换，不可能一蹴而就，新旧会并存一段时间。防风险、调结构，都需要以时间换空间.

Page 4: The page carries reports of senior Chinese leaders meeting with different delegations.

Li Qiang met with the delegation from Yunnan Province. He told them that:

“this year is the opening year of the 15th FYP; with increasing uncertainty in the external environment and arduous and heavy tasks of domestic reform and development, it is imperative to respond forcefully to all manner of risks and challenges with more proactive measures and pragmatic action. With the profound adjustment of the global economic and trade pattern and the domestic economic structure, Yunnan’s position and role in the overall national development situation have become more prominent. It is necessary to adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, comprehensively implement the Party Central Committee’s decision-making and deployments, firmly establish and practice the correct view of political achievements, and solidly carry out all tasks in the economic and social fields, seeking real results through hard work, and demonstrating Yunnan’s new accomplishments in development as part of the construction of Chinese-style modernisation.” 李强强调，今年是“十五五”开局之年，外部环境不确定性增多，国内改革发展任务艰巨繁重，必须以更加积极的作为、更加务实的行动，有力应对各种风险挑战。随着全球经贸格局和国内经济结构的深刻调整，云南在全国发展大局中的地位作用更加凸显。要坚持以习近平新时代中国特色社会主义思想为指导，全面贯彻党中央决策部署，牢固树立和践行正确政绩观，扎实做好经济社会领域各项工作，以实干求实效，在中国式现代化建设中展现云南发展新作为.

“It is necessary to vigorously develop modern service industries, focusing on key areas, tapping potential, promoting innovation in tourism products and services, and fostering the deep integration of culture, tourism, sports, and commerce. It is necessary to scientifically plan the layout of ‘green electricity + intelligent computing’, deepen and expand ‘AI+’, promote the digitalisation and intelligent transformation of the service sector, and cultivate new growth points in areas such as AI application services and the data industry. It is necessary to comprehensively enhance the functions of the major corridors and bridgeheads, deepen opening-up and cooperation oriented toward South Asia, Southeast Asia, and the Indian Ocean rim region, fully leverage the role of various platforms such as the Yunnan Pilot Free Trade Zone, actively undertake the phased transfer of industries from the eastern region, advance in an integrated manner the development of ‘ports + corridors + markets’, and promote the upgrading of the corridor economy toward a hub economy and an industrial economy. It is necessary to persist in combining normalised and targeted assistance with the stimulation of endogenous motivation, firmly hold the bottom line of not allowing large-scale return to poverty or descent into poverty, advance the comprehensive revitalisation of rural areas, expand people-enriching industries such as plateau-characteristic agriculture and ethnic-characteristic handicraft industries, improve employment and entrepreneurship support policies, promote sustained and relatively rapid income growth among the populace, and continuously consolidate the favourable situation of ethnic unity, social harmony, and border prosperity and stability.” 要大力发展现代服务业，聚焦重点、挖掘潜能，推进旅游产品创新、服务创优，促进文旅体商深度融合。科学布局“绿电+智算”，深化拓展“人工智能+”，推进服务业数智化，在人工智能应用服务、数据产业等方面培育新的增长点。要全面提升大通道和桥头堡功能，深化面向南亚、东南亚和环印度洋地区开放合作，充分发挥云南自贸试验区等各类平台作用，积极承接东部产业梯度转移，一体推进“口岸+通道+市场”发展，推动通道经济向枢纽经济、产业经济升级。要坚持常态化精准帮扶和激发内生动力并举，牢牢守住不发生规模性返贫致贫的底线，推进乡村全面振兴，壮大高原特色农业、民族特色手工业等富民产业，完善就业创业支持政策，促进群众持续较快增收，不断巩固民族团结、社会和谐、边疆繁荣稳定的良好局面.

Zhao Leji met with the Sichuan delegation. He praised Xi Jinping’s leadership and asked the delegation to “thoroughly implement the spirit of General Secretary Xi Jinping’s important instructions on Sichuan’s work and the decisions and deployments of the Party Central Committee”. He further called on the province to:

“Grasp the major opportunity of building the national strategic hinterland, and construct a modern industrial system with distinctive Sichuan characteristics and advantages; actively serve and integrate into the new development pattern, play a positive role in advancing the construction of the national unified large market, and build a strategic highland for opening to the west and a new base for participating in international competition; promote the coordinated advancement of economic development and social development, focus on resolving the people’s urgent difficulties and anxieties, and let the people have a solid, perceptible, and accessible sense of gain; and solidly carry out study and education on establishing and practicing the correct view of political achievements, persistently advance strict and comprehensive Party governance, and guide the formation of a good development environment with a clean and upright political ecology.” 把握国家战略腹地建设重大机遇，构建富有四川特色和优势的现代化产业体系；积极服务和融入新发展格局，在推进全国统一大市场建设方面发挥积极作用，构筑向西开放战略高地和参与国际竞争新基地；推动经济发展和社会发展协调并进，着力解决群众急难愁盼问题，让群众有实打实、可感可及的获得感；扎实开展树立和践行正确政绩观学习教育，持之以恒推进全面从严治党，以风清气正的政治生态引领形成良好发展环境.

He also called on them to adhere to the central leadership’s arrangements with regard to the leadership transitions at the county and township levels.

Wang Huning met with the delegation from Guizhou Province. He too praised Xi Jinping’s leadership. The report adds:

“Wang Huning expressed the hope that Guizhou will comprehensively implement the spirit of the Fourth Plenary Session of the 20th CPC Central Committee and the spirit of General Secretary Xi Jinping’s important speeches during his inspection in Guizhou, adhere to taking high-quality development as the overall guiding principle, adhere to focusing on the ‘four new’ and making the ‘four modernizations’ the main direction of work, maintain social harmony and stability, and achieve a good start to the 15th FYP. Guizhou’s development during the 15th FYP period should be planned and advanced within the overall framework of the development of the Party and the state’s undertakings, better reflecting the spirit and requirements of the overall national plan, and implementing the major decision-making and deployments of the Party Central Committee more resolutely and forcefully. 王沪宁希望贵州全面贯彻落实党的二十届四中全会精神和习近平总书记在贵州考察时的重要讲话精神，坚持以高质量发展统揽全局，坚持围绕“四新”主攻“四化”，保持社会和谐稳定，实现“十五五”良好开局。要把贵州“十五五”时期发展放到党和国家事业发展全局中来谋划和推进，更好体现国家整体规划的精神和要求，更加坚决有力地贯彻落实党中央重大决策部署.

It is necessary to firmly safeguard the real economy as this foundation, develop new-quality productive forces in accordance with local conditions, promote the deep integration of technological innovation and industrial innovation, continuously optimize the business environment, adhere to ecological priority and green development, and blaze a new path of high-quality development through deepening reform and opening up. It is necessary to promote the integrated development of developing industries, strengthening counties, and enriching the people, consolidate and expand the achievements of poverty alleviation, accelerate the comprehensive revitalization of rural areas, and safeguard and improve people’s livelihoods. It is necessary to do a good job in forging a strong sense of the Chinese national community, and carry out activities to create ethnic unity and progress. It is necessary to strengthen the Party’s leadership and Party building, guide Party members and cadres to strengthen the concept of building the Party for the public good and bringing benefit to the people, and establish and practice the correct view of political achievements. 要守牢实体经济这个根基，因地制宜发展新质生产力，推动科技创新和产业创新深度融合，持续优化营商环境，坚持生态优先、绿色发展，在深化改革开放中走出高质量发展新路。要推动兴业、强县、富民一体发展，巩固拓展脱贫攻坚成果，加快乡村全面振兴，保障和改善民生。要做好铸牢中华民族共同体意识工作，开展民族团结进步创建活动。要加强党的领导和党的建设，引导党员、干部强化立党为公、为民造福理念，树立和践行正确政绩观.

Ding Xuexiang met with the delegation from Liaoning Province. He too praised Xi’s leadership. Then the report says:

“Ding Xuexiang pointed out that this year is the opening year of the 15th FYP. To carry out economic and social development work well, it is necessary to uphold and strengthen the Party’s overall leadership and implement the decisions and deployments of the Party Central Committee without exception and without compromise. Accurately grasp the goal orientation, elevate the effectiveness of macroeconomic governance, persist in doing things that are correct over the long term, pursue genuine growth without water content, accelerate the resolution of shortcoming problems, eliminate risks and hazards in key domains, and drive high-quality, sustainable development. Persist in using scientific and technological innovation to lead industrial upgrading, accelerate high-level self-reliance and self-strengthening in science and technology, actively develop new-quality productive forces, and promote the smooth succession and transformation between new and old growth drivers. Continue to deepen reforms in key areas, expand high-level opening up, and enhance the driving force and vitality of high-quality development. Actively respond to social concerns, do more practical things benefiting people’s livelihood, and continuously improve the people’s sense of gain, happiness, and security.” 丁薛祥指出，今年是“十五五”开局之年，做好经济社会发展工作，要坚持和加强党的全面领导，不折不扣落实好党中央决策部署。准确把握目标导向，提升宏观经济治理效能，坚持做长期正确的事，追求实实在在、没有水分的增长，加快解决短板问题，消除重点领域风险隐患，推动高质量、可持续的发展。坚持以科技创新引领产业升级，加快高水平科技自立自强，积极发展新质生产力，促进新旧动能平稳接续转换。持续深化重点领域改革，扩大高水平对外开放，增强高质量发展动力活力。积极回应社会关切，多办民生实事，不断提高人民群众获得感、幸福感、安全感.

He also called on them to “firmly establish and practice the correct view of achievements, and demonstrate greater responsibility and achievements in the comprehensive revitalisation of Northeast China in the new era”.

Li Xi met with the delegation from Fujian Province. He too expressed his support for Xi’s leadership. The report then said that Li expressed hope that Fujian will “always adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, firmly grasp the Party Central Committee’s functional positioning and strategic arrangements for Fujian’s development, and persistently hold on to the goal of building a new Fujian with vibrant mechanisms, superior industries, prosperous people, and a beautiful ecology. It should actively serve the overall national development situation and the overall situation of work related to Taiwan, continuously deepen reform and opening up, comprehensively promote high-quality development, strive to build a modern industrial system, steadily advance common prosperity, persistently advance comprehensive and strict governance of the Party, and strive to take the lead in the construction of Chinese-style modernisation.” 李希指出，“十五五”时期是基本实现社会主义现代化夯实基础、全面发力的关键时期。希望福建始终坚持以习近平新时代中国特色社会主义思想为指导，牢牢把握党中央关于福建发展的功能定位和战略部署，扭住建设机制活、产业优、百姓富、生态美的新福建目标不放松，积极服务全国发展大局、对台工作大局，持续深化改革开放，全方位推动高质量发展，着力构建现代化产业体系，扎实推进共同富裕，持之以恒推进全面从严治党，在中国式现代化建设中奋勇争先.

The report then says:

“Li Xi emphasised that to govern the country, one must first govern the Party; only when the Party prospers can the country be strong. Discipline inspection and supervision organs must more proactively focus on the central tasks and serve the overall situation, advance comprehensive and strict governance of the Party with higher standards and more concrete measures, and provide strong guarantees for achieving the goals and tasks of the 15th FYP period. It is necessary to resolutely safeguard the Party’s unity and cohesion, strictly enforce political discipline and discipline around leadership transitions, strengthen political supervision, resolutely purge ‘two-faced people’ who harbour divided loyalties and whose words and actions are inconsistent, make focused efforts to resolve the ‘seven types of misconduct’, and drive the broad ranks of Party members and cadres to firmly establish and practice the correct view of political achievements, translating into concrete reality strategic deployments such as implementing the new development philosophy, driving high-quality development, and accelerating the construction of the new development pattern.” 李希强调，治国必先治党，党兴才能国强。纪检监察机关要更加主动围绕中心、服务大局，以更高标准、更实举措推进全面从严治党，为实现“十五五”时期目标任务提供坚强保障。要坚定维护党的团结统一，严明政治纪律、换届纪律，强化政治监督，坚决清除心怀二志、言行不一的“两面人”，着力解决“七个有之”问题，推动广大党员、干部牢固树立和践行正确政绩观，把贯彻新发展理念、推动高质量发展、加快构建新发展格局等战略部署落到实处.

It is necessary to firmly safeguard the Party’s advanced nature and purity, strictly and practically correct the ‘four winds’, thoroughly implement the spirit of the Central 8-point regulations, and advance in an integrated manner the approach in which officials do not dare to be corrupt, cannot be corrupt, and do not want to be corrupt. It is also necessary to continue deepening the rectification of unhealthy practices and corruption problems around the masses, strive to eradicate the soil and conditions that breed corruption, and firmly follow the path of anti-corruption with Chinese characteristics. 要坚定捍卫党的先进性纯洁性，从严从实纠治“四风”，深入贯彻中央八项规定精神，一体推进不敢腐、不能腐、不想腐，持续深化整治群众身边不正之风和腐败问题，着力铲除腐败滋生的土壤和条件，坚定走好中国特色反腐败之路.

Page 6: There are reports of more important central leaders meeting with a set of delegations. Basically, they endorse Xi’s leadership, while making a broad domain-specific point, as per the report.

Also on the page is a report on Zhang Shengmin, CMC Vice Chairman, meeting with the PLA and PAP delegations.

Zhang Shengmin pointed out that over the past year the 14th FYP was brought to a successful conclusion, and Chinese-style modernisation took new and solid strides forward, fully proving that the ‘Two Establishments’ are the most significant political achievement, the most precious historical experience, and the most objective practical conclusion of the new era. This year is a key year in fighting the tough battle to achieve the centenary goal of the founding of the PLA. The whole army must persistently use Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era to unify thinking and forge souls, deeply implement Xi Jinping Thought on Strengthening the Army, implement the Chairman Responsibility System of the CMC, deepen political rectification, rectify work styles and combat corruption, and continuously consolidate the political foundation of loyally safeguarding the core and resolutely obeying the commands of Chairman Xi. It is necessary to concentrate efforts on promoting high-quality development, accelerate the integration of system-of-systems operational capabilities, strengthen the construction and application of new-domain and new-quality combat forces, intensify the work of military governance, and strive to achieve a good start for national defense and military building in the 15th FYP period.” 张升民指出，过去一年“十四五”圆满收官，中国式现代化迈出新的坚实步伐，充分证明“两个确立”是新时代最重大政治成果、最宝贵历史经验、最客观实践结论。今年是打好实现建军一百年奋斗目标攻坚战的关键一年，全军要坚持不懈用习近平新时代中国特色社会主义思想凝心铸魂，深入贯彻习近平强军思想，贯彻军委主席负责制，深化政治整训、正风反腐，不断夯实忠诚维护核心、坚决听从习主席指挥的政治根基。要全面加强练兵备战，强化实战实训，坚定灵活开展军事斗争，坚决维护国家主权、安全、发展利益。要聚力推动高质量发展，加快体系作战能力集成，加强新域新质作战力量建设运用，加大军事治理工作力度，奋力实现“十五五”国防和军队建设良好开局.

Also in the paper are excerpts from the 15th FYP outline, the budget report, which I covered yesterday, and explanations with regard to certain laws, which I am currently not covering.

Finally, Beijing has said that Zhai Jun, the Chinese government’s special envoy on the Middle East issue, will travel to the Middle East as part of efforts to help de-escalate tensions. However, it’s not clear when Zhai is expected to travel.