China has announced a massive defense budget hike this year, a move that assumes significance in the backdrop of the Russia-Ukraine war. According to a draft budget proposal, the defense budget is pegged at a whopping $230 billion.
Last week, Germany said in a dramatic move it would allot more than $100 billion in additional defense spending. The move close on the heels of Vladimir Putin declaring war on Ukraine. On February 27, Chancellor Olaf Scholz said the Bundeswehr will be given a special fund of â¬100 billion ($110.6 billion).
China's defense spending will surge by more than 7 percent this year compared with the last year. Meanwhile, Beijing has set the 2022 GDP growth target at around 5.5 percent, below to previous year's 8.1 percent growth rate.
The plans were proposed in a draft budget submitted to the national legislature on Saturday morning. The defense budget in the draft is proposed at 1.45 trillion yuan ($230 billion).
Government Work Report
Chinese Premier Li Keqiang revealed the official growth target in the Government Work Report that was delivered to the opening of the annual session of the National People's Congress (NPC), China's top legislature reported Global Times.
Under the draft, a number of social development and economic goals were also set for 2022. It included providing over 11 million jobs and keeping Consumer Price Index nearly at 3 percent.
With regard to the country's economic policies, China's deficit-to-GDP ratio also plays a key role which was set at around 2.8 percent for 2022. But Chinese experts believe that the country's deficit-to-GDP ratio still has room to grow and is not high compared with Western economies, predicting the central government will take more fiscal moves, including launching more tax and fee cuts for small and medium enterprises, to tackle downward pressure.
China shapes its policies every year with two sessions, the NPC session and the ongoing annual meeting of the Chinese People's Political Consultative Conference (CPPCC) National Committee. The committee is also China's top political advisory body.