BEIJING — Chinese leader Xi Jinping’s agenda for the annual ceremonial legislature session: Stimulate the economy by encouraging consumers to spend more now that strict antivirus controls have ended, and install a loyalist government to Intensify Communist Party control over the economy and society.
Xi, China’s most powerful figure in decades, has no formal role in the National People’s Congress, which will convene a meeting of its full members on Sunday. But he towers above all events: The 69-year-old handed himself a third five-year term as party general secretary in October, potentially making himself the leader for life.
The two-week gathering of 2,977 NPC members is the year’s most high-profile political event, but its legislative work is limited to approving ruling party decisions. Its more important function is to provide a platform to publish government plans and give instructions to members to take home to cities and provinces.
Xi and other leaders say their priority is to reassure consumers and businesspeople it’s time to spend and invest after restrictions that kept millions of people at home temporarily suspended Shanghai and other industrial hubs paralyzed and destroyed jobs, were lifted in December.
The economy faces challenges ranging from weak global export demand and ongoing U.S. tariff hikes amid a technology and security dispute to restricting access to Western processor chips over security concerns. Domestically, the workforce has been shrinking for more than a decade, putting pressure on an economy that still relies on labor-intensive industries.
Economic growth fell to 3% in 2022, the second weakest level since at least the 1970s.
According to a text released on Feb. 16, the ruling party must “fully unleash consumption potential,” Xi said at the party’s annual planning meeting.
Xi did not give details but said Beijing should encourage spending on electric cars and medical and elderly care, home improvement, culture and sports. He warned at the December meeting that the work “will be complicated”.
A consumer-led recovery could take longer than stimulus spending or triggering a real estate investment boom. But Chinese leaders are trying to avoid options that would increase debt, which they say is already dangerously high.
It is forecast that Premier Li Keqiang, the top economy official, will announce a 5%-5.5% growth target in a speech on Sunday on plans for the year. Li, a free enterprise advocate, is set to be replaced as prime minister at the congress after stepping down as party leader No. 2 in October.
The International Monetary Fund and some private sector forecasters expect much weaker annual growth of just 4.4%.
“It takes time to tell if the economy will reverse,” said Song Huimin, a supermarket owner in the northeast city of Jinzhou. He said sales are better than six months ago but not back to pre-COVID levels.
“People want to consume, but they still don’t have enough income,” Song said. “Some people are still unemployed.”
The former owner of a garment factory in the eastern city of Changzhou said it closed last year, leaving 20 people unemployed. He got a job at another clothing company. Any remaining money will be used to educate his 14-year-old daughter.
“I have no house, no car, and no travel plans,” said the man, who only wanted to give his last name, Wu.
Since taking power in 2012, Xi has called on the ruling party to return to its “original mission” as China’s economic, social and cultural leader and carry out the “rejuvenation of the great Chinese nation.”
Entrepreneurs who create China’s new jobs and wealth have been unnerved by tighter political controls and anti-virus restrictions. Business groups say global firms have shifted investments to India, Vietnam and other countries over the past year because China’s travel restrictions prevented executives from visiting the country.
The party has indicated it is ending anti-monopoly and data security crackdowns on tech companies that have wiped hundreds of billions of dollars off the market value of Alibaba, Tencent and other industry leaders. But there is no sign that a campaign to tighten political control over them is rolling back.
The industry was rocked again in mid-February when Bao Fan, a star banker involved in some of the biggest tech deals, disappeared. His company said Bao was “collaborating with an investigation,” but gave no details.
Companies are still “expected to prioritize party direction,” Eurasia Group’s Neil Thomas said in a report. He said the measures announced during the National People’s Congress could give the ruling party “more direct control over policy-making” in the areas of technology and innovation.
A new government will be announced at the end of Congress in a rotation every ten years that will give Xi the opportunity to install his supporters as prime minister, finance minister and central bank governor.
Xi has promoted officials with whom he has a personal history, contrary to a party tradition that requires leading candidates to have served as cabinet ministers or in other posts at the national level.
Li’s successor as prime minister and head of government is Li Qiang, a former Shanghai Party secretary with no experience in government at the national level. Li Qiang was appointed party leader No. 2 in October.
Li Qiang “will do everything to ensure that Xi has no reason to doubt his loyalty,” Thomas said.
The candidate expected to succeed Vice Premier Liu He, a US-educated economist specializing in finance and banking, is He Lifeng. He chairs the cabinet’s planning agency, the National Development and Reform Commission, but has no financial background. Ding Xuexiang, who served as Xi’s chief of staff, is expected to become vice prime minister, although he has no experience in governance.
The government is expected to announce another increase in military spending, the second highest after the United States, after the Stockholm International Peace Research Institute says it is the world’s longest string of increases at 29 years.
According to Harley Seyedin, president of the American Chamber of Commerce in Southern China, Beijing’s economic plan has implications beyond economics and trade.
Washington and Beijing are competing to show “which governance model can best solve global problems,” Seyedin said in a February report. “Achievement will enhance perceptions of power.”
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` researcher Yu Bing contributed.
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