China’s GDP growth in 2023 is expected to accelerate from anemic pace in the past year, even as the government tries to increase defense spending.

China plans steady recovery: China is aiming for 5% GDP growth in 2023, according to the Prime Minister’s Government Work Report Li Keqiang at the opening session of the 14th National People’s Congress (NPC) held in Beijing on Sunday, local news outlet China Daily reported reported.

The country’s GDP growth slipped to 8.1% in 2021 after a strong post-COVID-19 rebound of 3% in 2022. Economic growth slumped to 2.2% in 2020 amid the COVID-19 pandemic The Chinese economy advanced at a healthy pace of over 6%.

In 2022, amid frequent recurrences of COVID-19, China faced setbacks that forced factories to close. Amid public protests, the country decided to withdraw its strict zero-COVID tolerance policy in December 2022.

The reopening will serve as the biggest catalyst for China’s economic recovery in 2023, according to investment bank JPMorgan called in a report published last month.

China anticipates an annual CPI rate of around 3% for the year. It is targeting a deficit ratio of 3% of GDP. JPMorgan’s chief economist for China Haibin Zhu sees consumer price inflation remaining below 2% for much of 2023 before recovering towards the end of the year and into 2024 and approaching 3%, driven by the rapid reopening of the economy.

12 million urban jobs will be created in China, with the urban unemployment rate expected to be around 5.5%.

See also: Best Chinese Stocks

Defense spending increases: The country plans to increase defense spending by 7.2% to 1.55 trillion yuan ($224 billion), a draft military budget released by China’s Ministry of Finance shows, China Daily reported. Compared to the previous year’s growth of 7.1%, this was a slight increase. Accelerating spending growth gains significance amid ongoing geopolitical threats and an arms race in the region….