April 13, 2024
Economy

Opinion | Growing the Chinese economy and risk control are the focus of ‘two sessions’


The once-a-year meetings of China’s parliament beginning on Monday are eagerly anticipated for insights into the country’s economic policies and direction.

Beijing is expected to announce relief measures to support an economy facing multiple challenges. It remains to be seen whether they will be stopgaps or significant enough to restore confidence and revive the growth trajectory.

Ahead of the meetings the Politburo has signalled more fiscal measures and vowed to improve policy consistency.

In what will be his first work report to the National People’s Congress since taking office a year ago, Premier Li Qiang will reveal a keenly awaited growth target.

China’s top advisory body signals economy is its No 1 priority

It is widely expected to be around 5 per cent, extending last year’s trajectory of 5.2 per cent. But amid continuing external challenges, including geopolitical tensions and supply chain woes, not everyone is convinced China can achieve it.

Restoring confidence is the paramount issue. Weak property and financial markets may contribute to lack of it but they are also symptoms of it. Many see poor sentiment, debt – particularly at the local government level – and population ageing as core structural obstacles to growth unless steps are taken now to address them.

Beijing acknowledges confidence is a real issue, but sees it as largely reflective of a Western media narrative, particularly in the United States, aimed at talking down China’s economy.

The real picture may not be so gloomy. The government is confident, for example, that China’s different political economy structure gives it more than one way of resolving the debt issue.

On population ageing, workforce participation among people aged 50 and over is relatively low because of an early retirement age. Raising it would go a long way towards resolving the problem.

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That said, while the economy is important, politics remains the key to the two sessions – including personnel reshuffles following the downfall of two ministers and a large number of senior officials in corruption investigations. Politically China will use the occasion to put its house in order.

Strengthening party discipline and anti-corruption work remains the overriding political theme. The goal is to ensure the party stays focused, disciplined and efficient so that China can maintain stability in the face of global uncertainties. Economic development needs to happen within this framework.

Even though not a topic, the US is the elephant in the room. Some policy moves China is making anticipate long-term rivalry with the US. China needs a sharper focus and more disciplined approach.

So growing the economy is important, and risk control the watchword for the “two sessions” of the NPC and the political advisory body, the Chinese People’s Political Consultative Conference.



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