FT News Briefing China’s military spending to outpace economic growth
5 snips
Mar 6, 2023 China is set to grow its economy by around 5% in 2023, but military spending is outpacing economic growth, signaling a shift toward security. Meanwhile, major protests in Israel reflect a deep divide over proposed judicial reforms, with around 300,000 people rallying against perceived threats to democracy. In the U.S., tensions rise as President Biden prepares to issue his first veto in opposition to anti-ESG state legislation, revealing a changing political landscape ahead of the 2024 elections.
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China's Cautious Growth Target
- China set a cautious economic growth target of around 5% for 2023.
- This is lower than market forecasts of 5.5% or even 6%, suggesting a conservative approach.
China's Infrastructure Financing
- China uses special purpose bonds for infrastructure projects, issued by local governments but guaranteed by the central government.
- This allows Beijing to control local government spending and fund key infrastructure initiatives.
China's Military Spending Prioritized
- China's military spending will increase by over 7% in 2023, exceeding its economic growth target.
- This reflects a shift towards security and preparedness, marked by longer-term contracts with weapons makers.