Amid a political climate of hostility and inflation, China recently released the lowest economic growth target recorded in 30 years.
"A comprehensive analysis of evolving dynamics at home and abroad indicates that this year, the risks and challenges for development rise significantly, and we must keep pushing to overcome them," Premier Li Keqiang said, according to CNN Business.
The plans were stated by Li, who revealed a target GDP growth of 5.5% this year.
The world’s second-biggest economy grew by 8.1%, with the first months of the year credited with the most success as growth steadied toward the fourth quarter.
According to ING chief economist for Greater China, Iris Pang, the country is facing a “challenging backdrop” as it fights to resolve a real estate crisis amid a heightened precaution approach against the coronavirus.
"The country is still under a zero-COVID policy and consumption has been weak, while policy implications on the real estate and technology sectors linger on," she said.
The instability was further driven by Russia’s invasion of Ukraine, particularly in the oil and wheat feature industries, with costs going through the roof. Investors in the region are now concerned about how the impact sanctions on Russia could turn critical supply chains upside down.
"Outside China, geopolitical tensions are high while supply chain disruption and semiconductor shortages continue," Pang said.
Li said China is currently prioritizing food and energy supplies while also considering the urgency of oil development. The capital plans to spend a smaller percentage of its budget, at 2.8%. The government now continues making efforts to re-stabilize the economy as President Xi Jinping attempts to secure a third term in office in time for the “twice-in-a-decade leadership” scheduled for this year.