●China’s government on Sunday announced a hike in defence spending by 7.2% to $225 billion in 2023, saying the rise was needed to deal with “complex security challenges”.

Beijing also announced a lower than expected growth target of “around 5%” for the year, as the National People’s Congress (NPC), or Parliament, convened for its annual session in the capital.

●Outgoing Premier Li Keqiang delivered his last report to the NPC on Sunday morning. The session will conclude on March 12, with Mr. Li set to be replaced by a close ally of President Xi Jinping, Li Qiang, who was promoted as the second-ranked leader of the Politburo at the ruling Communist Party’s once-in-five-year congress in October 2022.

●The NPC is a largely ceremonial legislature that endorses party policies as well as approves government appointments. This year’s session, which marks the end of Mr. Li’s second five-year term, will see sweeping changes across government ministries with officials set to be appointed for the next five years.

●Mr. Li, in his last work report to the NPC, announced an economic growth target of “around 5%” for 2023. Last year, the economy failed to meet its 5.5% target, growing by 3% as it struggled with the impact of the “zero-COVID” policy, which was finally withdrawn in December.

●With the ending of zero-COVID lockdowns and the return to normalcy expected to boost growth, Chinese officials have painted an optimistic picture of a recovery this year, although they have also warned of challenging external conditions.

●Mr. Li said the country would add “around 12 million new urban jobs” this year as well as continue to boost strategic, high-tech industries while “defusing major economic and financial risks”, which included local government debt as well as financial problems continuing to plague real estate enterprises.

●On Sunday, a draft Budget presented to the NPC, which will be approved during this session, proposed a 7.2% hike to take defence spending to 1.55 trillion Yuan ($225 billion), up from 1.45 trillion Yuan in 2022. In dollar terms, the Budget actually declined from $230 billion in 2022 given the depreciation in the Yuan.

●China’s still sizeable Budget remains around three times that of India’s, which was in February announced as ₹5.94 lakh crore ($72.6 billion). NPC spokesperson Wang Chao told reporters the increase in defence spending, which was only a slight rise from last year’s 7.1% hike, was “needed for meeting complex security challenges and for China to fulfil its responsibilities as a major country.”

●Mr. Li’s work report, which outlined goals for the coming year, said the military “should work to carry out military operations, boost combat preparedness, and enhance military capabilities so as to accomplish the tasks entrusted to them by the Party and the people.”

●“The armed forces should intensify military training and preparedness across the board, develop new military strategic guidance, devote greater energy to training under combat conditions, and make well-coordinated efforts to strengthen military work in all directions and domains,” he said, adding that in the past year, the army “carried out operations in a firm and flexible way; and they effectively conducted major missions relating to border defence, maritime rights protection, counterterrorism and stability maintenance, disaster rescue and relief, COVID-19 response, peacekeeping, and merchant ship escorting.”