China Lowers Growth Target to Around 7%

China lowered its economic growth forecast to about 7% this year at the opening of the country’s biggest political event of the year, ushering in what leaders have dubbed a “new normal” of slower growth in the world’s second largest economy.  Premier Li Keqiang ’s speech on the economy opened the National People’s Congress, China’s annual legislative session. Last year’s goal was “about 7.5%”; when actual growth came in at 7.4%–the slowest in more than two decades, officials disputed that it represented a miss.

The economic mood is downshifting on almost every front in China, which means that as demand grows for better schools and pensions and cleaner skies, the government is in less and less of a position to provide.  The 7% target was widely expected amid sluggish domestic demand and a slow recovery in the global economy.

China will raise military spending by about 10.1% this year, suggesting that the economic slowdown will have limited impact on modernization plans that include new submarines, aircraft carriers and stealth fighter jets.  “As a large country, China needs the military strength to be able to protect its national security and people,” said Fu Ying, a spokeswoman for the National People’s Congress. “Our history teaches us a lesson that when we lag behind, we come under attack. We won’t forget that.”