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What to watch for as China’s major political meeting of the year gets underway

March 3, 2024
in Business
What to watch for as China’s major political meeting of the year gets underway
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Author of the article:

The Associated Press

The Associated Press

Ken Moritsugu

Published Mar 03, 2024  •  Last updated 6 minutes ago  •  4 minute read

BEIJING (AP) — One burning issue dominates as the 2024 session of China’s legislature gets underway this week: the economy.

The National People’s Congress annual meeting, which opens Tuesday, is being closely watched for any signals on what the ruling Communist Party might do to reenergize an economy that is sagging under the weight of expanded government controls and the bursting of a real-estate bubble.

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That is not to say that other issues won’t come up. Proposals to raise the retirement age are expected to be a hot topic, the state-owned Global Times newspaper said last week. And China watchers will parse the annual defense budget and the possible introduction of a new foreign minister.

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But the economy is what is on most people’s minds in a country that may be at a major turning point after four decades of growth that propelled China into a position of economic and geopolitical power. For many Chinese, the failure of the post-COVID economy to rally strongly last year is shaking a long-held confidence in the future.

A CEREMONIAL ROLE

The National People’s Congress is largely ceremonial in that it doesn’t have any real power to decide on legislation. The deputies do vote, but it’s become a unanimous or near-unanimous formalizing of decisions that have been made by Communist Party leaders behind closed doors.

The congress can be a forum to propose and discuss ideas. The nearly 3,000 deputies are chosen to represent various groups, from government officials and party members to farmers and migrant workers. But Albert Wu, an expert on governance in China, believes that role has been eroded by the centralization of power under Chinese leader Xi Jinping.

“Everyone knows the signal is the top,” said Wu, an associate professor at the National University of Singapore and a former journalist in China. “Once the top says something, I say something. Once the top keeps silent, I also keep silent.”

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Nonetheless, the reports and speeches during the congress can give indications of the future direction of government policy. And while they tend to be in line with previous announcements, major new initiatives have been revealed at the meeting, such as the 2020 decision to enact a national security law for Hong Kong following major anti-government protests in 2019.

A TARGET FOR GROWTH

The first thing the legislature will do on Tuesday is receive a lengthy “work report” from Premier Li Qiang that will review the past year and include the government’s economic growth target for this year.

Many analysts expect something similar to last year’s target of “around 5%,” which they say would affirm market expectations for a moderate step up in economic stimulus and measures to boost consumer and investor confidence.

Many current forecasts for China’s GDP growth are below 5%, but setting a lower target would signal less support for the economy and could dampen confidence, said Jeremy Zook, the China lead analyst at Fitch Ratings, which is forecasting 4.6% growth this year.

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Conversely, a higher target of about 5.5% would indicate more aggressive stimulus, said Neil Thomas, a Chinese politics fellow at the Asia Society Policy Institute.

There will be positive messages for private companies and foreign investors, Thomas said, but he doesn’t expect a fundamental change to Xi’s overall strategy of strengthening the party’s control over the economy.

“Political signals ahead of the National People’s Congress suggest that Xi is relatively unperturbed by China’s recent market troubles and is sticking to his guns on economic policy,” he said.

A NEW FOREIGN MINISTER, MAYBE

China’s government ministers typically hold their posts for five years, but Qin Gang was dismissed as foreign minister last year after only a few months on the job. To this day, the government has not said what happened to him and why.

His predecessor, Wang Yi, has been brought back as foreign minister while simultaneously holding the more senior position of the Communist Party’s top official on foreign affairs.

The presumption has been that Wang’s appointment was temporary until a permanent replacement could be named. Analysts say that could happen during the National People’s Congress, but there’s no guarantee it will.

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“Wang Yi enjoys Xi’s trust and currently dominates diplomatic policymaking below the Xi level, so it would not be a shock if Wang remained foreign minister for a while longer,” Thomas said.

The person who has gotten the most attention as a possible successor is Liu Jianchao, a Communist Party official who is a former Foreign Ministry spokesperson and ambassador to the Philippines and Indonesia. He has made several overseas trips in recent months including to Africa, Europe, Australia and the U.S., increasing speculation that he is the leading candidate.

Other names that have been floated include Ma Zhaoxu, the executive vice foreign minister. Wu said it likely depends on whom Xi and Wang trust.

“I don’t know how Wang Yi thinks about it,” he said. “If Wang Yi likes somebody like Liu Jianchao or likes somebody like Ma Zhaoxu. And also Xi Jinping. So it’s more about personal relations.”

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