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China’s annual parliamentary contest – the National People’s Congress – begins on March 5 in Beijing and, for the second consecutive year, will be an almost virtual event because of Covid-19. Absent it will be the usual crowd of journalists from all over the world mingling with officials who run the world’s second largest economy. One thing that will not change: although the NPC is China’s main legislature, the Communist Party ensures that important decisions are made long before any proposal reaches the floor. The prospects for the economy will be discussed at the meeting that lasts 10 to 14 days, as well as the future of Hong Kong.
1. What is the purpose of the meeting?
The group sometimes uses the NPC to reveal major policy and personnel changes. Last year’s NPC confirmed plans to pass a bill establishing “a monitoring mechanism to ensure national security” for Hong Kong, weeks before China imposed controversial national security legislation on the city. But it is mainly a parliament that ratifies the decisions taken by other organs of the state – “a ceremonial legislature, ”according to Harvard University’s Ash Center for Democratic Governance and Innovation.
2. What’s on the agenda?
There will be a more detailed analysis of the economy, national and local budgets and the 14th Five-Year Plan, a high-level policy plan that covers the period 2021-25 and is likely to focus on the technology ambitions. As usual, the meeting takes place simultaneously with a meeting of China’s main political advisory body, the Chinese People’s Political Consultative Conference, a large group that includes independent members (the 2018 meeting brought technology entrepreneurs), as well as party delegates. Together, they are commonly known as Lianghui, or “Two Sessions”.
3. Anything else?
Changes in Hong Kong’s electoral system that would give Beijing more control could come at this year’s event. Although measures regarding the former British colony were not on the public agenda, Hong Kong leader Carrie Lam said in February that Beijing has “that act to resolve ”local elections and senior Chinese officials have discussed proposals with city officials. Another possible topic is that of China birth policy, which now allows couples to have two children after decades under the limit of one child. As the population ages faster than most developed economies, China is considering lifting all birth restrictions in the northeastern provinces.
4. Who is coming?
About 3,000 members of the NPC are expected, each with one thing in common: they need the blessing of the group to be present. Participants include President Xi Jinping and his six colleagues on the Politburo Standing Committee, other party and government leaders, business executives and military commanders. While some Chinese and foreign journalists based in the capital are arriving, there will be none from abroad. Press conferences, briefings and other interviews will be conducted using methods that include a video link. Foreign envoys will be invited to observe plenary meetings, and some reporters will be allowed to cover them in the Great Hall of the People, the traditional focal point of the NPC.
5. What is Xi facing?
A growing barrage of criticism from around the world on issues that include how China is dealing with the pandemic, crackdown on Uighur Muslims and their increasing control over Hong Kong through controversy national security legislation. There is concern about increasing Chinese military pressure on Taiwan’s democratic government, which Beijing sees as part of its territory. And China needs to restart ties with both Europe and the United States – and President Joe Biden – after four years of sour relations with Donald Trump. Xi also seeks to consolidate power before a possible third term as head of the Communist Party, after the second term expires next year.
6. What about the economy?
China will reveal its economic and budget goals, including defense spending. The government did not set a target for GDP last year and there is a chance that it could decrease it again this year because of the pandemic’s effect on growth. Economists expect GDP to grow by 8.4% in 2021, and most provinces have set a target of at least 6% for this year. In the long run, Xi’s goal of doubling the economy by 2035 requires slightly slower growth than 5% per year. For 2021, the authorities have signaled that they want to reduce the stimulus injected into the economy last year and reduce debt. The focus of the Five-Year Plan is likely to be China’s effort to become technologically self-sufficient in the face of growth competition with the US, especially in sectors such as computer chips. The US has blacklisted companies like Huawei Technologies Co., preventing them from protecting key components from American suppliers.
Recovery in 2021
China’s economy looks set to recover with the start of the new five-year plan
Source: Data compiled by Bloomberg
The Reference Shelf
- QuickTakes in the tough of China Hong Kong laws, hot spots for tensions with the US, and the Uighurs.
- The Brookings Institution’s take over US policy towards China under Biden.
- Bloomberg examines where a US-China confrontation can take place in the South China Sea, along with a fight for fish in the waters.
- China’s opinion on NPCs occupation.
– With the help of Karen Leigh, James Mayger and Jing Li