During the National People’s Congress on Saturday, the Chinese government announced a 5.5% growth target for 2022, the lowest target since 1991, and significantly below the 8.1% growth achieved in 2021. This is in comparison to the IMF’s Chinese growth forecast of 4.8% in 2022, released in January. Citing increased domestic and international risks, the release stated that economic stability must be a “top priority” for China this year. Among other economic targets announced, the budget deficit target was lowered from 3.2% to 2.8% of GDP while inflation targets remained flat at around 3%. A major risk to the inflation target, as with many countries globally, remains soaring commodity prices, which may hamper the spending power of the Chinese consumer. Since 25 February, Brent crude oil has increased by 33.2% while Newcastle coal prices have gained 68.8% at the time of writing. Overall, Chinese dry bulk imports have slowed so far in 2022, declining by 5.2% YoY across the January-February period, respectively. This comes as pressure on inventories for iron ore and coal have eased in 2022.

Along with the economic targets mentioned above, the National People’s Congress in China reiterated aims to ensure food security by increasing production and reducing reliance on international markets. This comes following policy released late last month announced a range of measures to improve self-sufficiency in the agriculture sector. These included retaining grain output above 650 MMT per annum and maintaining total farmland areas beyond 120 million hectares by preventing any repurposing of these areas. Further, the government is putting increased regulation on the country’s hog industry to restrict any additional swine flu outbreaks. Following record grain imports in 2021 as demand remained firm following the pandemic, agribulk shipments into China have slowed so far in 2022. Chinese grain imports totaled 10.6 MMT in February, declining by 2.7% YoY and the lowest monthly total since April 2020. Of the total grain shipments across January—February, which totaled 24.9 MMT, 56% and 17% have been soybeans and corn respectively as shipments out of the US have started to ramp up.