As the world’s second-largest economy and one of the major engines of global economic growth, China’s national agenda is of tremendous significance to the world.
The country’s upcoming two sessions, the biggest annual event on China’s political calendar, understandably is garnering much attention both at home and abroad. While we have yet to have a full picture of what specific issues are to be addressed, we can foretell what aspects the two sessions are likely to focus on, judging from three major perspectives.
First, strategies related to the nation’s medium-to-long-term goals for socioeconomic development. With the goal of achieving the great rejuvenation of the Chinese nation through Chinese-style modernization having been set by the 20th National Congress of the Communist Party of China, practical policies and measures are expected to be formulated to underpin this cause. Second, strategies aimed at coping with the challenging external environment amid growing US blockage in technology and trade. Third, policies aimed at ridding the negative effects of the COVID-19 pandemic and catapulting the country’s economic growth back to the normal range, up from 2.2 percent in 2020 and 3 percent in 2022, the lowest figures since the country’s reform and opening-up process started some 40 years ago. Judging from these three major perspectives, we can foresee the following agendas:
“High-quality development” is expected to be a core topic in the two sessions, as it is the natural choice for China’s future economic growth.
Last year, China’s population shrank for the first time since 1962, suggesting that the problem of an aging population is chipping away at the country’s “demographic dividend”. Furthermore, China’s status as the “world factory” is being severely challenged as more foreign-invested and Chinese enterprises are relocating their factories to Southeast Asian countries because of rising production costs and tightening environment-protection requirements on the Chinese mainland. “High-quality development” is the only way to make up for the losses caused by the outward relocation of low-end and mid-end manufacturing industries. Meanwhile, after 40 years of reform and opening-up, China’s modern-service industry has reached the stage that is conducive to the country’s pursuit of “high-quality development”.
It’s worth noting that the Guangdong-Hong Kong-Macao Greater Bay Area will be the primary pilot zone for undertaking institutional opening-up. The three regions are separate customs territories that have their own social systems, legal systems and currencies; it is imperative that the institutional barriers be removed sooner rather than later to facilitate GBA development by allowing the free flow of factors of production within the city cluster. The institutional opening-up in the GBA will serve as a template for nationwide “high-level opening up”
“Stimulating domestic consumption” is likely to be another focus of the two sessions. The three-year-long COVID-19 pandemic has taken a toll on the mainland’s consumer market, with the total retail sales of consumer goods declining by 0.2 percent last year. But as the pandemic recedes, market sentiment is becoming bullish. And the central government is stepping up fiscal and monetary efforts to stimulate consumption, while businesses are also encouraging consumption with unprecedented promotion efforts.
“Strengthening industrial competitiveness” could be another focus. Although China has the most comprehensive production chain in the world, the absence of core technologies remains a weak link in the country’s production chain. Washington is doubling down on its effort to contain China and block its access to key technologies; the only way that China can bolster the competitiveness of its industries is to invent its own advanced technologies. This will require a multipronged approach including more investment in science and technology, elimination of outdated production capacity, creation of a technological innovation system, and institution of mechanisms to nurture talents.
The two sessions are also likely to put emphasis on promoting investments. China’s annual economic growth target has long been an indicator that the world pays close attention to. Provincial-level governments in China have recently announced their respective economic growth targets for 2023, with more than 60 percent of them setting the figure at 5.5 percent to 6.5 percent, close to the national growth rate of 6 percent before the pandemic struck. Investment is crucial to propelling the country’s economic growth back to the reasonable range. In the first two months of this year, local governments proactively facilitated investments by tackling problems in project sourcing, project funding and operations, as well as improving the business environment. But to boost investment, there is still the need for the central government to step up fiscal and monetary support.
“High-level opening-up”, or “institutional opening-up”, could also be emphasized at the two sessions. To this end, China will undertake three key institutional reforms: speeding up the process of amending existing laws and regulations to make them conform to international standards or practices; intensifying reforms in the areas of market access, market competition, industrial policy, intellectual property rights and the business environment for the sake of alignment with international practices; and facilitating market access for foreign investments by adopting the “Negative List” system and replacing the complicated approval system with a filing system.
It’s worth noting that the Guangdong-Hong Kong-Macao Greater Bay Area will be the primary pilot zone for undertaking institutional opening-up. The three regions are separate customs territories that have their own social systems, legal systems and currencies; it is imperative that the institutional barriers be removed sooner rather than later to facilitate GBA development by allowing the free flow of factors of production within the city cluster. The institutional opening-up in the GBA will serve as a template for nationwide “high-level opening up”.
Conceivably, the two sessions will also bring up the topic of improving people’s livelihoods and fulfilling their aspirations for a better life, which has been among the major policy goals of the annual Government Work Report.
Statistical data show that the number of university graduates on the mainland in 2022 exceeded 10 million for the first time in history, adding pressure to the job market. Uneven distribution of educational and healthcare resources has engendered many social issues. Therefore, issues related to employment, education and healthcare will surely be hot topics in the two sessions.
“Prevention and control of risks” should also be a focus. Over recent years, the central government has repeatedly emphasized the need to prevent systemic risks and disruptive blunders. China currently faces major risks in three areas. First, external security risks posed by the United States, which sees China as its major rival and is likely to stir up trouble over the Taiwan question. Second, financial risks arising from persistently high inflation in developed economies as a result of upward pressure on commodity prices. Third, the risk of a rebound in the pandemic remains as the COVID-19 virus continues to mutate.
The author is a Hong Kong member of the National Committee of the Chinese People’s Political Consultative Conference and chairman of the Hong Kong New Era Development Thinktank.
The views do not necessarily reflect those of China Daily.