The annual National People's Congress is currently underway in Beijing. At the opening of the meeting last week, Chinese Premier Li Qiang presented a growth target of 4.5–5 percent - the lowest since the 1990s.
After decades of growth, the country has slowed down in recent years. People are spending less, the real estate market has been shaken up, and the country has experienced a pandemic. In addition, there is an ongoing trade conflict with the United States and a generally turbulent world.
A new five-year plan is set to be adopted, setting the direction for China's economy.
"Not a newsstand hit"
"People usually talk about domestic consumption and describe it as weak. China has a large consumption market, it's just that it should perhaps constitute a larger share of GDP," says Helena Löfgren, analyst at the National Knowledge Centre on China at the Swedish Institute for International Affairs (UI).
Analysts do not see any major changes in the path forward for China compared to previous years, she says. They want to get domestic consumption going, but the question is how. So far, most of the measures that have been rolled out have had a marginal effect.
"It (the five-year plan) is not a newsstand hit. What you can pick up is that you have a slightly sharper tone towards Taiwan," says Löfgren, adding:
I think we should maybe look at what they're investing in from China, or what they're saying they're investing in. What will be their new growth engines?
Too few births
It is clear that China continues to invest heavily in technological development and is becoming more self-sufficient. This includes investments in AI, expanding semiconductor manufacturing capacity, and investing in new technology areas.
"China has great ambitions to move up the value chain and become an innovation nation. They have already succeeded to some extent, but they have even greater ambitions," says Per Portén at Business Sweden in China.
However, there are many economic challenges to tackle. The country has problems with unemployment, not least among young people. In addition, it is facing a demographic crisis because too few children are being born. According to Helena Löfgren, this is one of the toughest tasks for China's leader Xi Jinping.
In the long term, it's a declining population, she says.
