The top story to come out of China’s annual Two Sessions so far is the 5.5% GDP growth target, which is the lowest economic growth target in more than a quarter of a century, write Joe Cash and Torsten Weller. The Two Sessions also touched on China’s Covid-19 response, economic stimulus, and the environment
China’s annual Two Sessions kicked off on 4 March, and continues until 11 March. The name ‘Two Sessions’ refers to the double plenary sessions of China’s top legislative body, the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference. The Two Sessions is one of the most important events in the country’s political calendar. The first session of the NPC started on Saturday 5 March, with Premier Li Keqiang presenting the Government Work Report.
The presentation of the Government Work Report is a highlight of the NPC plenum, as it provides a window into how the government considers itself to have performed over the last year, where it sees there to be room for improvement, and its policy priorities going forward into a new legislative cycle.
What is in the 2022 Government Work Report?
The most important information coming out of the Government Work Report is the development targets for the current year:
- GDP growth of around 5.5%
- Over 11 million new urban jobs
- Surveyed urban unemployment rate of no more than 5.5%
- Consumer price index increase of around 3%
- Growth in personal income that is basically in step with economic growth (5.5%)
- Steady increases in both the volume and quality of imports and exports and basic equilibrium in the balance of payments
- Grain output of over 650 million metric tons
- Further improvement in the environment, including:
• Continued reduction in the discharge of major pollutants
• Energy consumption per unit of GDP to be assessed with appropriate flexibility within the framework of the 14th Five-Year Plan
• The exclusion of newly added renewable energy and coal, petroleum, and natural gas consumed as raw materials in the total amount of energy consumption.
GDP Target
China’s GDP target has long been a central feature of the Government Work Report, as it has taken on extra significance as a barometer informing Chinese officials, diplomats, analysts, and ordinary people alike of how the government is performing. This year, the government has set a target of 5.5%, which is the lowest economic growth target in more than a quarter of a century. Considering that last year the economy grew at a rate of 8.1%, this year’s target looks very low, even though it is in line with many provincial targets. Shanghai and Guangdong have published similar growth targets for this year.
Covid-19
No government’s review of its legislative performance of late would be complete without an assessment of its handling of Covid-19, and China is no exception. This year’s specific goal concerning Covid-19 is to “respond to Covid-19 and pursue economic and social development in a well-coordinated way.” R&D into mRNA vaccines is to be stepped up and efforts preventing cases coming in from aboard maintained, with a view to ensuring “the normal order of work and life.” The idea that China could change how it approaches Covid-19 was floated on several semi-official channels in the lead up to the Two Sessions, but the government has not given any official indication that this is on the cards.
Stimulus
The Chinese government is sticking to its supply-side policy and fiscal-oriented measures to stimulate the economy. The issuance of special-purpose bonds for local governments remains unchanged at RMB 3.65 trillion (£440 billion), the same as last year. But the central government will also allocate RMB 2.8 trillion (£335 billion) of special funds directly to provincial and local governments, which — according to Premier Li — should be directed towards projects which improve people’s wellbeing and remove weak links in areas that are important to people’s lives.
What’s in it for British business?
According to the Work Report, progress has been made in “develop[ing] the underlying institutions for a market system… [while the government] continued [the] implementation of the three-year action plan for SOE reform and supported the development of private businesses.”
What’s more, the government has set to “deepen reform and opening up in all aspects” as its fifth policy goal for 2022, placing it behind only those referring to the 20th Party Congress later this year. All of this is in the spirit of “promoting stable growth of foreign trade and investment.”
One disappointing point, however, is that on the Foreign Investment Law, the Work Report states that it will be “fully implemented,” whereas in previous years there was the intention to see the areas within which foreign enterprises could not invest cut further.
What’s next
While the work report represents the official and curated view of the Chinese government, the Premier’s press conference — which will be held towards the end of the Two Sessions — usually provides a more open and outspoken channel to elaborate on some of the government’s policy targets for this year.
CBBC will keep monitoring the Two Sessions and keep you updated on all major announcements and policy proposals.
