Communist angst in Beijing: Economic reality threatens party’s ‘mandate of heaven’

Special to WorldTribune.com

By Willy Lam, EastAsiaIntel.com

While Premier Li Keqiang got 45 rounds of applause as he read out the annual Government Work Report at the opening of the National People’s Congress (NPC), China’s legislature, on March 5, there is no mistaking that the “Chinese economic miracle” is coming to an end.

 Li Keqiang broke the news of slower growth. / WSJ.com

Li Keqiang broke the news of slower growth. / WSJ.com

Li’s report targeted an economic growth rate of just 7 percent for 2015, which is the lowest level of GDP expansion since 2004. Moreover, the head of the State Council, or central government, budgeted a deficit of 1.62 trillion yuan for this year, a jump of nearly 3,000 billion yuan over that of 2014.

Even more so than previous years, the Chinese Communist Party (CCP) administration will have to rely on hefty government investments in mostly infrastructure projects to jack up the growth rate and keep urban unemployment at below 4.5 percent.

While the focus of Western analysts is on the country’s high level of indebtedness – total social debt, which includes massive borrowings by local administrations and state-owned enterprises, has reached 280 percent of GDP – the official media has gone into high gear promoting the latest mantra of President Xi Jinping.

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