A time when the world sold the business of the Chinese Communist party, those logs, a domestic matter online, and apparently secretive politics in a country essentially closed off to the rest of the world, but not anymore trying this transformation into an economic and technological powerhouse is in a globalized world, means that what goes on there is keenly watched by political leaders and businesses everywhere. Both east and west need. Each of the economically, the trade between the 2 now takes place in a much more volatile g, a political climate. Some of thats due to more confrontational relations between china and the us. And a few upsets in the countries economy, notably in real estate, have worried some investors who was on the agenda at the National PeoplesCongress Annual gathering, with 3000 delegates meeting over a week to set out china as priorities for the coming year. So what all day, and what do they mean for china and for the rest of the world will be asking, i guess those questions and more in just a few moments, but 1st image and kimberly reports on what was discussed at the congress to join his economies. Slowing, but the government is aiming to 5 percent growth in 2024. Thats the focus of this annual meeting of the National Peoples congress. Under discussion, developing new technologies from electric vehicles to i liked the facial recognition scanners knowing in the entrance to the conference. Another front which showing a 6 to catch up with the us attracting for an investment and business is a key thing. But some International Companies fund china is regulations unappealing. Thats already in there. Well, i know its necessary to introduce more targeted issues to facilitate the trade. The General Administration of customs will take the lead in organizing special campaigns to facilitate across the board of trade off and what convenience to authorize. I cannot make operate to enterprises and to continue to expand the pilot programs for cross border e commerce. The domestic Housing Market is among the challenges joined faces to achieving more economic growth. In 2021, the market bust is construction joint. Advert grand run out of money leaving an estimated millions of people without homes theyd already paid for. The government says auction is being taken. Please hold on one of the Real Estate Enterprises that are severely insolvent and have lost their ability to operate should follow the principles of the rule of law and market ties. Ations and undergo bankruptcy and restructuring behavior. That harms the interest of the masses will be investigated and punished. Use unemployment is a record high of nearly 15 percent intentions are rising in the south china sea. For the countries worried about an increase in minute troy activity in the pacific and increased hostilities between the us and china. The 7. 2 percent roys in defense spending will be a concern to join to spends nearly 300000000. 00 a year on defense foot. The 900000000000 spent by the United States. A fact that worries beijing composite. We urge the United States, britain and australia to abandon the cold war mentality and to faithfully fulfill International Obligations to stop creating greater trouble for Regional Peace and stability. Joiner is the worlds 2nd largest economy and emerging superpower. And its joyful great of growth is being closely watched by global competitors imaging kimber. Audra 0. The inside story. The or lets bring it now, i guess now in beijing, the time it is a senior fellow at the time he institute in jakarta, but hoffman is a professor at the station institute to National University of single pool. He was also with the will bank in china for 12 years, 6 of them as country director. And in london, vicky price is chief economic adviser at the sense of freakonomics and Business Research and a full u. K. Government economic advisor. Welcome to you all. So there was no customer a press Conference Following this is congress by premiere, the kick yang that would have helped us read the runes and try to understand chinas challenges in chinas future direction. So i let me come 1st of all to you and i want to 1st of all, whether the absence of a press conference was in fact, a way of avoiding scrutiny over the collapse of the massive Housing Market. And also talk around the 5 percent growth figure posted which some people for this year, which some people find them vicious. So do you think that the government will draw the not be talking about real estate and do you think that 5 percent g d p growth is realistic . Well, let me answer those in reverse order. I do think if they just say 5 percent. Uh, theyve been pretty good about hitting their targets in terms of discussing real estate. They discussed it a great line. Cuz as in our discussion, hopefully well show in terms of why he didnt to do the press conference. So im gonna assume that it was a personal that you had other people talking. I think from his perspective hes, if you look at his track record, hes more interested in results. He does a tremendous a number of inspections, work meetings, very, very practical and very, very much ventured on the domestic economy. Right. His predecessor used to dabble in uh, in the International Side a lot more. But you know, i think people are trying to read a little bit too much into this, that somehow he is afraid of the price or something. Remember that these are not politicians in the way that the us or europe or Great Britain has a they simply are people who are professionals are responsible for getting it done. His real judgment will come up next year when there is another work report and hes either accomplished what hes said he was going to do or hasnt. Okay, so nothing to hide there. Other people have done the talking to the numbers. Do the talking or at least some of them as well, but helping i want to, i want to read it around. Other interesting, fascinating, really statistics. I think the New York Times for this one ton is central bank. Lending to real estate was 800000000000. 00 in 2019 full years like to edit forwarding to just 75000000000. 20 lending to industry. Meanwhile, that was 83000000000. 00 in 2019 has sold to 670000000000. 00 in 2023, a remarkable change of direction for an economy in just 4 years, including the pen. Demik is an illustration really of the ability of the chinese Economic System to change. Well clearly uh, this is a major reallocation of resources. And banking resource is not the central bank for the Banking System. And it started with a correction under Real Estate Development in 2020 the end of 2021 or the 3 red line policy command, which basically discouraged lending to a real estate which the leadership felt was starting to become too risky. Too much of a bible, and so now there is a reallocation to the new, the future and direction of, of development. And that is in manufacturing according to the leadership. So you have the Banking System that pretty much follows that. It has issues with it. Thats great. That does not present, theres less real estate as being constructed, but of course, weve already seen a lot of the the, the fallout from that to include a in the buildings not finished and people waiting for an a housing. Lots of bankruptcies are probably going to follow, but at the same time, the Manufacturing Sector is doing quite well. The one thing that they dont do is absorb a lot of jobs and i think thats going to be one of the key constraints for the leadership going for sticky price, perhaps consequent to this rise in manufacturing, chinese officials at the end p. C, complaining about a perceived wave of unfair protectionism being level of china from around the world. Citing an i m f report that said that the trade restrictions around the world have tripled in the past 4 years. Much of it aimed at china. So is the world ganging up on china . Its true that the trades environment is becoming more difficult, in fact has become more difficult the lives of countries. And we are perhaps moving into a sort of d u. But as ation phase, it also explains why china is now looking to fix my point developments, domestic economy, and, and perhaps we longer the less on exports. And if you look at what has been going on in the last year, the value of expos of goods from china went down. And dr. Cause is quite in fulton, for a country that has traditional relied on exporting to the rest of the world. And also, the destination of this exports has changed quite significantly. So it was too much of the us because of post and all the sections that wont restrictions, that as well. But also redirecting exports to other parts of the world. So that has been a switch, there is no doubt about it and i think the plans were hearing about this year and also for later for china do suggest of this. We orientation is what theyre going to be focusing on. But the experts have been greater significance of gross if you look at whats been going on and the fact that some gross that we may get this year is a lot less than what used to be the case in the past. And of that is really because of the fact eva of china is becoming much your economy. And its con, grab quite so fast as it did before. And then also because on the export side and that for manufacturing particular its needs to rethink what it does. But also actually in terms of the loans to businesses that you referred to earlier, theres been a big drive to improve is the Technology Innovation and competes a lot more with the us than others . Well, actually given the fact is out there, the export is or, or other inputs restrictions which kind of coming from of goods from the us. Right. What i mean that you alluded that to, to changing the political alliances and shifting sands. We will talk about those in a minute, but perhaps, as you mentioned, one way of addressing this issue of domestic, the domestic economy, jobs and so on is a, but this is to you, a drive towards and it was talked about at the congress, so called future industries, we talk about everything from electric cars to surveillance technology, facial recognition, artificial intelligence, even commercial space flight. How big a transition is this for the chinese economy . How effective is it likely to be and how big a risk does it pose to the likes of Silicon Valley and the think electric comic because of japan and south korea and of us. And so for it, i mean, it is a very serious question. And clearly, the new drive is across or to the future industries are, are being built as we, as we speak, and as a lot of resources from the Banking System, from the government and from visit businesses themselves being allocated to new technologies, spending our research and development now in china is higher done in the us 2. 6 percent of total ttp. And that, of course, already results into a Competitive Industries and the electric field cost solar, the new energy that the china is already very competitive, and it starts show up in it domestically, but also internationally. Then as a 2nd category, which is the, the future industries and that is more sort of the, the, the, the cutting edge or so its, its not just right for, for production. But china is investing in its, its bringing in the science is bringing that technology. So that in future day would actually dominate, so theyre moving from a absorbing technology set already dinner from abroad to trying to create the new technology stuff to determine in 5 or 10 years. The future. Not sure landscape, thats a big move. And vicky i so you, you know, think of them there. I mean, western markets see this coming done today, particularly in, in the sphere to say electric vehicles where the a u. A is looking at putting tasks on to chinese inputs. The yes, there is a bit of a concert. Lets close that and it costs a lot of the support that has been given to industry in china. Really beings subsidies and about goods are being exposed to particularly electric vehicles as prices which of the countries cannot compete to getting on the server costs reviews from china has increased versus substantially in the world market some. And i think theres those of issues that everyone has to buy from waves and weve seen right now whats going on in the u, where there is a loss of the re emphasizing the growth in the brain industries. And also of course, what happens in the us with a installation reduction acts where there are subsidizing a lot of the bring production. Well call it that of for a reason. Other manufacturing areas in, if youre building them in the us. But actually we have seen china also investing international, more Chinese Companies getting into the market and also up to a point getting run some of those rules and, and i think thats an interesting part of whats been going on. Okay, i, i know it says, no i what do you think of that as well as a big area for, for many people it seems hypocritical. I mean, europe in america have been preaching, you know, the, the importance of the market, how you have to trust in it. And as soon as trying to actually does something, it, all of a sudden, its, uh, you know, were getting too far ahead. Its now time to put up the walls. And the fact is, 12 years ago, everyone was laughing at china because they said theyre going to put a series of, you know, pitch in for e b is why . Because they have real problems in the cities with the exhaust gases, people were complaining about the quality of their things like that. Now beijing, us is probably nice, so i live here. So i know i noticed the difference. So china has been initially they tried to bring this industry along, but right now its the subject of extremely brutal competition. A lot of these companies are losing money. They are not being subsidized by the government. Quite the country. Its us, europe that are looking to subsidize their industries simply because they did not keep up. So this, this idea that somehow it so its ok when we, when, but not okay when anyone else wins. And you know, for not only for try another for a lot of the global south, we see this is the kind of same kind of hip, hypocritical thing thinking thats been going on for way too long. I know i just want to touch on another aspect to these. So the future industries at artificial intelligence, a huge future global market. Of course, china, what were looking to make it head to head roads, the a and gain a competitive edge. It is suggested by treating a development with a sort of light touch regulation. Now, lots of people are already very nervous about the potential effects and consequences of a i should we be worried about the sort of a i that comes out of china . Well, we should be worried about any kind of a i, if you read this, no, no does. Yeah. And what hes spelled, i mean a i is obviously going to be used by governments all around the world in order to do whatever is they think they need to do. Quote, protect themselves for security reasons, regardless of the implications for privacy. It try is not alone, but they have a sense that a i does have dangers, do it back in 2013 the they started this idea of a sovereign inter, not the idea that countries are responsible for what is generated in their country in terms of uh, information and also what is coming in. They need to protect their people from a lot of appliances. So china is pursuing that. Well see what happens. China has a big advantage is data is not at the forefront of a guy at this juncture. But as weve seen in the past, under estimating what the chinese can do, you do at your own peril. Okay, i know im going to stay with you. Stay with us, but its in vicky, but i wanna move on to defense. Now. Defense spending set at 7. 2 percent for 2024. Thats a repeat of 2023. Kind of putting a lot of money into defense. Clearly, at the same time, Something Interesting came out of the congress, which was a very subtle changing language in the premise work report. Last year, it referred to a peaceful move towards the chinese reunification. Im talking about taiwan. Of course this, it would peaceful doesnt feature. Were talking about a firm advance towards reunification should be in conjunction with defense spending hikes, a see a shift in tone as a shifting strategy towards taiwan. You know, i dont think so. I mean, if you look at the last 6 years, i mean there were years when it was as high as a point 6. The 7. 00, as you pointed out, is the same as last year. And its at the median level. 5 in terms of taiwan, and as you know, there was a report today that came out that said that Us Special Forces are now permanently going to be in taiwan training. The tie, one east to resist the u. S. Is providing a high, a very, very high grade. Uh, not only defense, but also weapons that we can use on the off ends. Us as sailing ships up and down the taiwan straits. China is trying to draw this red line and theyve done it consistently, do not interfere with the one china policy. So from beijings point of view, there keeps trying to send the message. Unfortunately, washington isnt receiving it apparently. Well, what washington is doing along with the likes of japan, australia, and south korea, but let me put this to you is also hiking the defense spending not exclusively, but partly because of a perceived threat from china was china that moves closer towards the likes of rush or ron north korea, those 3 countries will getting warm woods at the congress is china effectively now, do you think its a center of a new arms . Rice but well, the clearly chinas minds because of this economic might, is growing in the region and that makes up, makes some countries novice. John has also been more active in the region, including the south china sea, which they say is that solvent territory. And many would dispute it because they think it is there somewhere in the territory. And there are exclusive economic jones. So does this do up something just on the defense spending . The 7. 2 percent would be exactly in line with nominal g d p. So