China’s ongoing two sessions, the biggest annual event on the country’s political calendar, understandably are attracting huge attention both at home and abroad, particularly because it is the first two sessions in the post-COVID-19 era, which are expected to shed light on the country’s strategies to facilitate economic recovery and the return to normalcy.
The post-pandemic world, figuratively speaking, is an athletic arena wherein every government is trying its best to outmatch its competitors. This is a competition that China must not lose. To ensure the best chance to win, there must be sound strategies to facilitate the whole recovery process as well as socioeconomic development in the coming years.
“It was the best of times, it was the worst of times.” Sound and comprehensive strategies are all the more imperative given the current world situation. President Xi Jinping has repeatedly noted that the world is witnessing changes unseen in a century. These colossal changes have been exacerbated by the COVID-19 pandemic and the Russia-Ukraine conflict. Whatever development strategies the two sessions are coming up with, they must fit in with the current global circumstances, as well as China’s current economic conditions.
The anti-pandemic restrictions imposed in the past three years have helped minimize the number of casualties but also inflicted damage on the country’s economy. The recovery gained pace after the anti-pandemic measures were gradually removed. The longer-term picture, however, is by no means rosy as the prospect of the global economy does not look too promising.
Furthermore, there is a worrying phenomenon that the new national strategies must address — general cautiousness among residents toward consumption. Data recently released by the People’s Bank of China show that renminbi deposits increased by 6.87 trillion yuan ($995.6 billion) in January alone, representing a 12.4 percent year-on-year increase. Of the increase in deposits, household deposits increased by 6.2 trillion yuan, a new monthly record high. The increase in deposits, seen by some experts as some sort of “precautionary savings”, is not conducive to the economy picking up momentum.
From a broader perspective, we can appreciate that China needs all-around strategies for socioeconomic development, with an enhanced emphasis on high-quality development leveraging innovation and new technologies that serve as the primary driving force.
Looking back to the past decades since the founding of the People’s Republic of China in 1949, we can realize that the “high-quality development” strategy is a natural choice. In the early years of national development, all resources were prioritized to build a relatively complete industrial system and a self-reliant national economy in the shortest time possible. The keyword back then was “survival”. “High-quality development” was basically an unheard phrase back then.
After the initial stage of development, the emphasis started to shift toward socialist modernization through reform and opening-up. With that new direction in place, China’s economy entered a stage of accelerated growth, with its potential gradually and continuously being released. Along with time, the scale of China’s economy became larger and larger while its development model was upgraded and transformed in response to the shifting actual situation. And General Secretary Xi Jinping’s report at the 19th National Congress of the Communist Party of China noted that the country’s economy “has been transitioning from a phase of rapid growth to a stage of high-quality development”. Finally, the circumstances for a strategy of “high-quality development” have been in place.
While its rapid growth over the past several decades has catapulted China’s economy to second place in the global ranking, it is still plagued by the problem of unbalanced and inadequate development. In China’s economic structure, some areas are already in advanced stages, while others are rather inefficient and outdated. And the economic development is facing bottlenecks or constraints. For example, resources and environmental constraints are being stretched to the limit.
For the economy to overcome those constraints, achieve sustainable growth and remain competitive in the long run, the transition to high-quality development must be accelerated.
In his report on the work of the government delivered at the first session of the 14th National People’s Congress on Sunday, Premier Li Keqiang proposed, among his various recommendations for the work of government in 2023, that the central government will “effectively pursue higher quality growth”, continuing to reduce energy consumption per unit of GDP and the discharge of major pollutants with a priority on controlling fossil fuel consumption with the aim of steadily improving the quality of the eco-environment. He also suggested that policies to be introduced this year should be kept consistent and targeted, and they should be carried out in more coordinated way to create synergy for high-quality development.
“High-quality development” entails more attention to optimizing the country’s economic structure and addressing the supply-side issues. Thus, Premier Li also recommended in his report that the central government will continue to deepen supply-side structural reform.
The author is a radiologist, a co-founder of the Hong Kong Coalition, and a council member of the Chinese Young Entrepreneurs Association.
The views do not necessarily reflect those of China Daily.