Premier Li Keqiang promises stable growth and more opening up
Mar-16-2021 By : fcccadmin
The annual sessions of the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC) ended on March 10 and 11 respectively, followed by the press conference by Premier Li Keqiang, like last year conducted via video link, with the Premier answering questions at the Great Hall of the People and journalists watching a large video screen in the Media Center 9 km away.
Premier Li said that securing jobs remained the government’s top priority in maintaining social stability. China is facing mounting pressure to generate jobs this year, including providing employment for 14 million people – among them 9 million college graduates. “We believe that through the steady recovery of economic growth, more jobs will be created, and more jobs will promote the stability and improvement of the economy,” he said. He argued that a 6% GDP growth target was not low as it was equivalent to about 8% growth at the start of the 13th Five Year Plan in 2016. Higher growth would be possible, but China wants to achieve high-quality and sustainable growth, he said. Large fluctuations would not be good for long-term stable growth. “Walking quickly for a moment does not mean one is walking steadily. It is only with a steady pace that we will be firm in our steps,” Li said.
China’s economy is already deeply integrated into the world economy and will continuously open up further in the interests of both China and the world. The growing domestic market will offer huge opportunities for foreign companies. China will continue to uphold free trade built on WTO rules, shorten the list of areas off limits to foreign investment, and continue to push for opening up of industries and services. We will make China an important destination for foreign investment and a big market for the world, Premier Li told domestic and foreign journalists. With 260 million elderly people, China’s “aging industry” in particular can be a huge “sunrise industry” for foreign companies, Li said.
The government did not flood the market with large amounts of liquidity. The CNY2 trillion stimulus package ensured the people’s basic living standards. There will be no quantitative easing or policy change, but micro and small enterprises would be supported and tax and fees be cut. Sixty million businesses were started in urban areas in the past five years. In the second half of last year, the number of businesses increased to 130 million, creating 200 million jobs. Premier Li said the government would further streamline administrative procedures to ease the burden on businesses. Funding for education and health care will be increased to ensure that the children of migrant workers can go to school in urban areas and township and county hospitals are upgraded.
Premier Li said China made breakthroughs in scientific innovation but still lagged behind in basic research. “Over the years, China has made major breakthroughs in technology and innovation. It has also developed rapidly in the field of applied innovation, but there are indeed deficiencies in the field of basic research,” Li said. The country would increase funding for basic research and try to make progress step by step. Scientific development requires international cooperation and decoupling would do no country any good, Li said. A national science center is to be set up in Xian, according the city’s Mayor Li Mingyuan. “The center – which aims to help solve major scientific problems and clear bottlenecks in cutting-edge technologies – will play an important role in improving China’s global competitiveness in the sci-tech sector,” the Mayor said.
Answering a question on the origin of the coronavirus, Premier Li Keqiang said that it was a “complex scientific issue” and called on all parties to join hands to beat the virus. On the state of U.S.-China relations, the Chinese Premier said that “healthy development of U.S.-China ties is in the interest of people in both countries”, and that he hoped “to see dialogue between the two countries in various areas and on multiple levels. There are many areas where the U.S. can work with China.” Yang Jiechi, Director of the Foreign Affairs Commission of the CPC Central Committee and Chinese State Councilor and Foreign Minister Wang Yi are scheduled to meet U.S. Secretary of State Antony Blinken and National Security Advisor Jake Sullivan in Anchorage, Alaska on March 18 and 19 for the first face-to-face high-level talks between leaders of the two countries since U.S. President Joe Biden took office in January.
In a break from a decades-long tradition, the 14th Five Year Plan (2021-25) did not set a specific GDP growth target for the five-year period, but instead stresses other indicators, including the unemployment rate, energy consumption and carbon dioxide emissions, in line with the aim to improve people’s livelihood and the quality of development. The plan has 192 chapters and includes detailed plans for the next five years. It mentions that growth would be kept in a “reasonable range” and an annual target would be set based on the specific conditions each year. In the 13th Five Year Plan (2016-20) a growth target of above 6.5% on average was set. While GDP growth was maintained above 6.5% in the first three years, the Covid-19 pandemic brought the five-year average to around 5.7%. For the first time, the plan contained a special section on food, energy and financial security. The plan contains 20 main indicators covering a wide range of areas, including eight obligatory targets, with seven focusing on ecological protection and security. On food security the plan said that China would keep 120 million hectares of cultivable land to ensure the food supply.
This overview is based on reporting by the South China Morning Post, the China Daily, Shanghai Daily and Global Times.
Premier Li Keqiang announces 2021 GDP growth target of “above 6%”
Mar-09-2021 By : fcccadmin
Chinese Premier Li Keqiang announced an “above 6%” GDP growth target in his Government Work Report, delivered at the opening session of China’s parliament. Last year no growth target was set due to the impact of Covid-19. The annual sessions of the National People’s Congress (NPC) and the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) started on March 4-5 and will close on March 10-11. China witnessed a V-shape GDP growth last year, as GDP in the first quarter saw negative growth of 6.8%, before climbing to 3.2%, 4.9% and 6.9% in the succeeding three quarters, with China realizing a 2.3% GDP growth last year. The “above 6%” target shows that China is emphasizing the quality of growth, rather than only fast development. “In setting this target, we have taken into account the recovery of economic activity. A target of over 6% will be well aligned with the annual goals of subsequent years in the 14th Five Year Plan period (2021-25), and will help sustain healthy economic growth,” Premier Li said. The targets, including GDP and other economic indicators set in the work report this year, are relatively conservative as policymakers are still concerned about the negative impact of the pandemic, Dong Dengxin, Director of the Financial Securities Institute at the Wuhan University of Science and Technology, told the Global Times.
Topping the agenda of the two sessions this year are discussions on the 14th Five Year Plan (2021-25) and the long-range objectives through 2035. China is aiming to become a mid-income country and double its 2020 GDP in 2035, requiring an average annual growth rate of between 4.7% and 5% in the next 15 years. Economists and institutions have predicted that the Chinese economy could grow over 8% in 2021, due to a low base in 2020 and further recovery momentum.
During the 14th Five Year Plan period, the country will accelerate the new development paradigm of “dual circulation”, where domestic and foreign markets boost each other, with the domestic market as the mainstay. It will help reshape the country’s competitive edge in international cooperation and competition, and contribute to its development in a more robust and sustainable manner. The new development paradigm does not mean China will develop behind closed doors, but it will push the country’s opening-up to a higher level and allow it to build even closer economic connections with the rest of the world and create broader market opportunities for other countries. Shan Hui, Chief China Economist for Goldman Sachs Research, said the key thinking is that China wants to focus on ways to make its economy more balanced and more resilient. He added that technology, consumption and environmental protection are three important fields on which China will place greater emphasis in the 14th Five Year Plan.
China’s defense budget will increase by 6.8% to CNY1.36 trillion this year, according to China’s Ministry of Finance. It is the sixth consecutive year of single-digit growth, and is only slightly higher than the 6.6% increase in 2020, which was the lowest growth since 1988. China has kept its defense spending at around 1.3% of its GDP in recent years, which is far below the average global level of 2.6% The target for the fiscal deficit-to-GDP ratio this year would be “around 3.2%”, compared with “above 3.6%” last year. Nearly CNY3.65 trillion of local government special-purpose bonds will be issued this year, down from the CNY3.75 trillion last year. The central government’s transfer payments to local governments will increase this year to more than CNY8.3 trillion. China is planning to create 11 million jobs in 2021, a jump from the 9 million in 2020.
Premier Li Keqiang outlined specific opening-up measures for this year, the start of the 14th Five Year Plan period, including further reducing the negative list for foreign investment, opening the service sector in a well-regulated way, formulating a negative list for cross-border trade in services and advancing the development of the Hainan Free Trade Port. The Premier said that innovation remains at the heart of China’s modernization drive. The country will work faster to enhance its strategic scientific and technological capability, with its R&D spending projected to increase by more than 7% annually and account for a larger share of GDP than in the past five years. The Premier said the country will promote the steady growth of imports and exports this year, increase credit support to small and medium-sized foreign trade firms, and encourage the development of new trade forms such as cross-border e-commerce. China will also work to make the Regional Comprehensive Economic Partnership (RECP) agreement come into force as soon as possible, facilitate the signing of its investment deal with the European Union, and accelerate its free trade negotiations with Japan and South Korea, he added.
As China implements the dual-circulation paradigm and steps up efforts to expand its domestic market, which already has more than 400 million middle-income residents, progress in opening-up has provided global businesses with huge investment opportunities, Zhang Xiaotao, Dean of the School of International Economics and Trade at the Central University of Finance and Economics in Beijing, said. Iris Pang, ING’s Chief China Economist, said China is expected to become “more interlinked” with the rest of the world as the country implements the dual circulation paradigm in the 14th Five Year Plan period. Artificial intelligence, quantum information technologies, brain sciences and other frontier sciences will receive more support. China will also help turn Beijing, Shanghai and the Guangdong-Hong Kong-Macao Greater Bay Area into global science and innovation hubs, the report said. Last year, China saw a stream of scientific and technological breakthroughs, including the Tianwen 1 Mars mission, the Chang’e 5 lunar mission and the Fendouzhe deep-sea manned submersible, according to the annual Government Work Report. “Basic research is the wellspring of scientific and technological innovation,” Premier Li Keqiang said. “So we will ensure the stable functioning of funding mechanisms for basic research and boost spending in this area by a considerable sum.” Central government expenditure on basic research will increase by 10.6% this year.
President Xi Jinping has underlined the need to fully and faithfully understand and implement the new development philosophy featuring innovative, coordinated, green, open and shared growth, and step up the building of the new paradigm in the new development stage. He made the remarks when taking part in discussions with fellow deputies from the delegation of Inner Mongolia at the NPC session. Efforts should be made to develop strategic emerging industries and advanced manufacturing, and advance infrastructure construction, Xi said. He underscored the importance of readjusting the region’s economic structure and upgrading the quality of development and highlighted the importance of technological innovation in developing industrial and supply chains. President Xi Jinping is an NPC Deputy representing Inner Mongolia.
In a press conference on the sidelines of the ”two sessions”, Minister of Foreign Affairs Wang Yi reiterated that multilateralism has always been China’s firm choice and that to solve world problems, the key is for all countries to insist on real multilateralism. Building small circles in the name of multilateralism is in fact “group politics,” multilateralism with one’s own interests taking precedence is still unilateral thinking, and “selective multilateralism” is not the right way, Wang said, without mentioning the U.S. China and Europe share extensive common interests and are not systemic rivals, Foreign Minister Wang Yi said, mentioning the improvement in China-Europe cooperation since last year, including the signing and taking effect of the China-EU agreement on geographical indications and the conclusion of negotiations on the China-EU investment treaty.
This overview is based on reporting by the China Daily, Shanghai Daily and Global Times.
NPC session adopts Civil Law, decides to proceed with Hong Kong security law
Jun-02-2020 By : fcccadmin
At the closing of the third session of the 13th National People’s Congress (NPC) on May 28 in the Great Hall of the People in Beijing, the delegates approved the Civil Law and adopted a decision to go forward with formulating national security legislation for Hong Kong. The NPC Standing Committee is entrusted with drafting the law, which will be included in an annex to the Basic Law of Hong Kong. The law will come into force upon promulgation, probably in August.
In a video press conference after the session, Premier Li Keqiang said that China is expected to achieve positive economic growth this year if security in the six key areas of job security, basic living needs, operations of market entities, food and energy security, stable industrial and supply chains, and the normal functioning of primary-level governments can be assured. China has set no specific target for economic growth this year due to great uncertainties. Instead, it has made practical plans to ensure more than 9 million new urban jobs, give full play to over 100 million market entities, and improve people’s livelihoods. Not setting a specific growth target does not mean economic development is not important, Li said. “We want to promote higher quality development,” he added. The policies and measures are designed to provide vital relief to businesses and revitalize the markets, with a particular focus on keeping jobs and protecting people’s livelihoods instead of undertaking large infrastructure construction projects. “This is because big change has taken place in China’s economic structure where consumption is now the primary engine driving growth, and micro, small and medium-sized companies now provide over 90% of all jobs in China today,” Premier Li said.
Li said money invested in the people will be able to generate new wealth, help protect and preserve tax sources, and make public finances more sustainable. Covid-19 has taken a heavy toll on the global economy in a way rarely seen before, Li said. “As China’s economy has become deeply integrated into the global economy, it is simply impossible for it to stay immune to the impact.” China will be able to fulfill the tasks and goals for the whole year and complete the building of a moderately prosperous society in all respects, Li said, adding that keeping China’s economic fundamentals stable will contribute to the whole world. China, a huge market for the world, is prepared to boost imports, Li said, noting measures to provide relief and revitalize the market are expected to further spur consumption. To facilitate foreign investment, China will further implement the foreign investment law, shorten the negative list for foreign investment, further open up the services sector, and improve the business environment.
On U.S.-China relations, Premier Li said that decoupling does no good to either side and will harm the world as the two countries are major economies and their ties are crucial. China and the U.S. must use wisdom to expand common interests and properly manage differences. U.S.-China relations are expected to deteriorate further as a Canadian judge ruled that the extradition case of Huawei Chief Financial Officer Meng Wanzhou can proceed and the U.S. is expected to further impose sanctions on China for implementation of the national security law in Hong Kong.
The National People’s Congress (NPC) said it would prioritize legislation on public health this year. It plans to revise the Wildlife Protection Law, the Law on the Prevention and Control of infectious Diseases, the Frontier Health and Quarantine Law, and the Emergency Response Law in 2020. Since the beginning of the Covid-19 outbreak, the top legislature has issued a decision to completely ban the illegal trade and consumption of wildlife, and to clarify epidemic prevention and control laws. China currently has over 30 laws on public health, but Zhang Yesui, Spokesperson for the third session of the 13th NPC, noted that there are still some weak links and shortcomings in the legal framework, and the NPC Standing Committee will further strengthen China’s public health legislation. Lawmakers are expected to review and approve the country’s biosecurity law this year, following a second reading in April, the Shanghai Daily reports.
NPC refrains from setting yearly GDP target, defense budget rises by 6.6%
May-26-2020 By : fcccadmin
No gross domestic product (GDP) target was set in Premier Li Keqiang’s work report to the yearly session of the National People’s Congress (NPC) in Beijing, which started on May 22. The country’s defense budget is to increase by 6.6% this year, the lowest rise in the past 20 years, as the economy suffered the shock of a 6.8% decline in the first quarter due to the effects of the Covid-19 pandemic.
For the first time since 1995 not setting a GDP growth target reflects the extraordinary circumstances China is facing, including factors “that are difficult to predict”. China’s decision does not mean it has attached less importance to economic growth, but instead shows the authorities are paying greater attention to high quality development, economists said after Premier Li Keqiang delivered his report.
Premier Li Keqiang said the nation will focus on “ensuring stability on the six fronts and security in the six areas” this year. China’s policy of “ensuring stability on the six fronts” refers to employment, finance, foreign trade, foreign investment, domestic investment, and market expectations. The policy of “security in the six areas” means safeguarding employment, people’s livelihoods, the development of market entities, food and energy security, the stable operation of industrial and supply chains, and the smooth functioning of society. By implementing those policies, “we will be able to keep the fundamentals of the economy stable”, Li said. The country plans to create more than 9 million new urban jobs to ensure that the surveyed urban unemployment rate is no more than 6%, and maintain consumer inflation at around 3.5%.
The convening of the two sessions – the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), postponed for 78 days from early March – indicates that the situation in China has largely returned back to normal and the Covid-19 epidemic has been brought under control. Except for the leaders taking their seats on the rostrum at the Great Hall of the People, all the more than 5,000 delegates attending the two meetings wore face masks, and had received two nucleic acid tests. Under the strictest epidemic prevention measures, when the delegates take their meals in their hotels, each one is seated at a separate table. During the opening sessions, a minute of silence was observed for the victims of the Covid-19 pandemic, which has claimed 4,634 lives in mainland China.
In his Government Work Report to the NPC session, Premier Li Keqiang said that ‘the epidemic has not yet come to an end, while the tasks we face in promoting development are immense.” He declared a “decisive victory” in the battle against the virus, but acknowledged the “great price” China has paid – a GDP contraction in the first quarter – which he stressed as “a price worth paying.” Premier Li prioritized ensuring job stability, basic living needs, business operations, food security and others areas. “We did not set a specific target, but that does not mean economic growth is not important or we will allow the economy to fall freely,” Liu Rihong, an official at the State Council who participated in drafting the report, told reporters, noting that the pace of economic growth will provide support to job security and livelihood, the Global Times reports.
The report contained more than 20 specific measures, including a decision to raise the deficit-to-GDP ratio above 3.6%, with a deficit increase of CNY1 trillion from last year. China will also issue CNY1 trillion in government bonds for Covid-19 control. The funds can only be used to ensure employment, improve basic living needs and protect businesses through tax and fee cuts. Additional tax breaks and measures could save businesses over CNY2.5 trillion this year. The report called for a significant cut in government spending, including a 50% cut to outlays on non-essential items.
China upheld its long-standing broader development goals of eradicating absolute poverty, and establishing a moderately prosperous society by doubling GDP from the 2010 level. “The Government Work Report highlighted China’s people-centered philosophy of development, and issues related to the people’s livelihood will be this year’s top priority,” Zhu Lijia, Professor of Public Management at the Chinese Academy of Governance, told the Global Times. The length of Li’s report is only half of last year’s and the shortest since the reform and opening-up policies were launched over four decades ago.
He Lifeng, Chairman of the National Development and Reform Commission (NDRC), said at the NPC session that the impact of the Covid-19 epidemic on China’s economy is significant but short-term and temporary. Premier Li also said that the government would continue to promote the development of the private sector and ensure private businesses have equal access to production factors and policy support. The country will review relevant regulations to abolish those that unfairly differentiate enterprises according to ownership forms. Deadlines will be set for government bodies to make overdue payments owed to private and small and medium-sized businesses. This overview is based on reports by the Global Times, China Daily, Shanghai Daily and South China Morning Post.
China’s parliament to start its annual session in the second half of this week
May-19-2020 By : fcccadmin
In the second half of this week, the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) will hold their annual sessions, which were postponed from early March. The duration of the sessions will be shortened from about 10 days to one week. So-called “closed loop management” will be used, which means that all participants will have been tested for Covid-19 and will be separated from the outside world. They will be staying at specially reserved hotels and brought to the Great Hall of the People in busses. They will not be allowed to roam freely in the city or receive visitors. Hong Kong’s NPC Deputies and CPPCC Members will first go to Shenzhen in Guangdong province to undergo nucleic acid tests before flying to Beijing. The number of staffers accompanying them to Beijing, including Chinese reporters, will be reduced. Journalists can only conduct interviews by phone or video chat, the Global Times reports. This year, no foreign journalists have been invited to cover the two sessions.
There are two major decisions pending, which could result in trillions of yuan in extra economic stimulus, to be approved by the NPC: raising the deficit-to-GDP ratio and issuing special government bonds. Another major issue is which GDP growth target will be set, if one is set at all. Most economists interviewed by the Global Times said that the target should be about 3%, which would give a much-needed boost to business confidence and serve as a guide for economic policy. Instead of a growth target for the year 2020, China could set one for the two years of 2020-2021 combined, which could be set at 6%. Another heated topic – the annual fiscal deficit rate – will be raised to 3.5% or even 4% of GDP to drive up investment and consumption, experts said. The Ministry of Finance set the fiscal deficit target at 2.8% of GDP for 2019.
Despite deteriorating China-U.S. relations, the Customs Tariff Commission announced that a new batch of imported products from the U.S. will be excluded from punitive tariffs. Products on the list – 79 items including rare-earth metals, gold ore and medical disinfectant – will no longer be subject to additional tariffs from May 19, 2020 to May 18, 2021. On May 8, the Office of the United States Trade Representative (USTR) announced several new tariff exclusions for imported products from China, including medical items. Both countries are still struggling to implement their phase one trade agreement. Gao Lingyun, Expert at the Chinese Academy of Social Sciences (CASS) in Beijing, told the Global Times that both China and U.S. may face difficulties carrying out the trade deal because of the pandemic. China may have delayed purchases of some U.S. goods in the first quarter, while the U.S.’ ability to supply products to China has been constrained by the pandemic.
In a video address to the 73rd World Health Assembly (WHA), Chinese President Xi Jinping said that China supports the comprehensive review of the Covid-19 response and inquiry into the origin of the virus, if the investigation is conducted in an objective and impartial manner after the pandemic has been brought under control. The inquiry should be based on science and professionalism, led by the WHO and conducted in an objective and impartial manner, Xi said. He added that with enormous sacrifice, China has turned the tide on the virus and protected people’s lives. During this process, the country attached great importance to openness, transparency and responsibility. Xi also told the WHA that China will provide USD2 billion over two years to help with the Covid-19 response, set up a global humanitarian response system with the help of the UN, and make a Covid-19 vaccine a global public good. As the majority of countries believe the pandemic has not reached its end, collaboration in fighting the virus remains the top priority while it is still premature to launch an investigation and look into the source of the virus, Zhao Lijian, Spokesperson of the Chinese Foreign Ministry, told a press conference.
China’s consumer price index (CPI) and producer price index (PPI) continued to decelerate in April, indicating possible structural deflation, but providing room for stimulus measures. Food price increases eased due to sufficient supplies of fresh vegetables and increasing hog production and supplies, according to Dong Lijuan, Senior Statistician at the National Bureau of Statistics (NBS). The CPI rose 3.3% year-on-year in April, down 1.0 percentage points from March. The PPI slid 3.1% year-on-year in April, compared with a 1.5% fall in March. According to the NBS, food prices rose 14.8% year-on-year in April, down 3.5 percentage points from the previous month. The pork price rose 96.9% year-on-year in the month, down 19.5 percentage points from March. Non-food prices rose 0.4% year-on-year in April, down 0.3 percentage points from March. In the first four months of this year, the CPI went up 4.5% year-on-year.
After six new infected persons were detected in one community in Wuhan, city authorities decided to conduct a 10-day city-wide coronavirus testing of all its residents. Wang Zhonglin, Communist Party Secretary of Wuhan, said at a conference that learning from recent new cases will prevent a rebound and is the best way to ensure people’s health and safety. The city of Shulan in Jilin province and a district of Jilin city have been put in lockdown after 21 Covid-19 cases were detected. Travel in the area has been restricted.
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