BEIJING – When China’s legislature opened its weekly annual session on Saturday, Chinese leaders were eager to use the event to build confidence in the country’s economy.
Beijing is using the National People’s Congress to promise that the Chinese economy, the engine of global growth, will regain momentum despite a sharp decline in housing, rising commodity prices, scattered blockades to control the coronavirus epidemic and widespread uncertainty about the war in Ukraine. .
Beijing’s ability to maintain political and economic stability is paramount as the ruling Communist Party prepares the ground for Xi Jinping, China’s leader, to secure a new term in office at a party congress later this year. Mr Xi uses a nationalist vision of rejuvenation to justify his rule of the strong man and the party’s expanding power in daily life, but the challenges his country faces are serious.
China’s economy is slowing. Ongoing blockades and other stringent pandemic control measures have hurt consumption. The average age of the population is growing rapidly, which threatens to lead to labor shortages. Officials are battling an unusually prolonged wave of public anger over human trafficking and poor protection of women.
The central focus will be on stabilizing China’s weak economy
On Saturday, Prime Minister Li Keqiang announced that the government had set a target of “about 5.5 percent” economic growth for this year. This would mean a continued gradual slowdown in the Chinese economy, albeit still faster than in most other countries.
Economies have recovered sharply in the last year in the West, aided by high consumer spending as the pandemic weakens, at least temporarily. But China is on the opposite path. China’s economy grew by 8.1% last year, but slowed significantly in the last months of last year to 4%, as government measures to curb real estate speculation have affected other sectors.
Consumers, sometimes kept at home by blockades and travel restrictions in the country, are withdrawing. The high level of household indebtedness, mainly for mortgages, also reduced costs. Even exports seem to be growing a little less rapidly after the spectacular growth for most of the pandemic.
“In its quest for economic development, China is under triple pressure from shrinking demand, supply disruptions and weakening expectations,” said Premier Li.
To compensate for low consumption, Prime Minister Li announced a new round of heavy, debt-fueled infrastructure spending and aid to many poor households, especially in rural areas. Transfers from the central government to provincial governments, which pay mainly for social programs and infrastructure, will jump 18 percent this year.
Zhu Guangyao, a former deputy finance minister who is now a cabinet adviser, told a news conference in late January that he expected the target to be around 5.5 per cent. But Jude Blanchett, a China specialist at the Center for Strategic and International Studies in Washington, suggested that the difficulties in the global supply chain and the economic and financial consequences of the war in Ukraine could make China set a lower goal.
At the congress, Mr. Blanchett predicted that “the biggest concern and central focus will be the economy.”
How long will China seek to protect Covid?
China has kept the coronavirus almost completely under control within its borders since the initial outbreak in Wuhan two years ago, but at a significant cost: periodic blockades, especially in border cities, and long quarantines for international and sometimes local travelers. There may be hints that China intends to follow the rest of the world in the opening, although probably not before next year.
Experts say China is unlikely to open its borders before the Communist Party’s congress later this year. When China begins to reopen, it will want to avoid the kind of uncontrolled epidemic that has engulfed Hong Kong’s nursing homes and hospitals, largely affecting the city’s oldest residents, many of whom have not been vaccinated.
But in interviews with state media, social media posts and public speeches in the past week, leading medical experts in China have begun to suggest that the country is looking for a less stringent approach that protects lives without being too destructive to the economy.
The challenge for Beijing is to increase the vaccination rate among the country’s older population. In December, a senior health official said the overall vaccination rate in the country was high, but only half of citizens over the age of 70 had been vaccinated.
China’s Covid strategy relies heavily on mass surveillance of population movements, tracking the location of cell phones, and rapidly restricting buildings and neighborhoods when mass tests and quarantines are required.
But Beijing’s concerns about the economic consequences of such measures, the National Development and Reform Commission, ordered local authorities last month not to impose unauthorized blockades. The senior economic planner said that governments “should not go beyond the relevant provisions for the prevention and control of epidemics to block cities and districts and should not interrupt public transport if it is unnecessary or without approval.”
What’s new for China: key things you need to know
Beijing is facing strong public pressure on women’s rights
Officials are struggling to control the public outrage that erupted after a short video of a woman chained to a barracks without a neck went viral in late January. A woman in east-central China’s Jiangsu province, described by government investigators as abducted in 1998, has given birth to eight children.
Her case drew new public attention to the long-standing problem of trafficking in women. Decades of one-child policy in the country have led to a shortage of women after families abandoned newborn girls or aborted female fetuses in favor of boys. Many men now find it difficult to find wives, and some have resorted to criminal gangs that kidnap women.
In tacit acknowledgment of the huge public outrage that has erupted in recent weeks, Mr Lee has vowed to take action against human trafficking without going into details. “We will fight hard against the trafficking of women and children and protect their legal rights and interests,” he said.
Nearly a dozen lawmakers and members of a top political advisory body have proposed measures to tackle the problem, including tougher penalties for buyers of abducted women and children.
But changing laws through the National People’s Congress is a long process, and Congress often leaves that to its standing committee, which meets every few months, and sometimes more often. “I do not expect the NPC to take any concrete legislative action on social issues,” said Changhao Wei, founder, manager and editor of a blog that tracks China’s legislature.
Such legislation did not appear on the agenda published on Friday before the opening of the National People’s Congress.
Beijing is likely to remain silent about the war in Ukraine
In many countries, the legislative meeting would offer a chance for a strong debate on the war in Ukraine. But China’s Communist Party-controlled congress is a gathering so tightly controlled and wrapped in rituals that the whole point seems to be to keep the controversy at bay.
Beijing’s pact with Moscow a month ago and the subsequent Russian invasion of Ukraine may not be mentioned. Chinese Foreign Minister Wang Yi will hold a news briefing Monday, reiterating Beijing’s position that Russia’s security interests must be respected and that the two countries must hold talks.
Guo Shuqing, China’s chief banking regulator, said on Wednesday that China would not join Western sanctions against Russia and planned to maintain normal trade and financial relations with Russia and Ukraine.
The clearest signal for foreign policy may come not from Prime Minister Li’s working report, but from his budget, a document to be published on Saturday. The budget is expected to require another large increase in military spending, which rose four times faster last year than non-military spending by the central and provincial governments.
Li You contributed to the research.