How China’s Parliament Aims to Rejig Economy After Covid Zero

How China’s Parliament Aims to Rejig Economy After Covid Zero

Updated: 1 month, 2 days, 12 hours, 3 minutes, 44 seconds ago





China’s parliament — the National People’s Congress — is meeting for the first time since the end of Covid Zero to hear how the country’s top leaders plan to restart the country’s growth engine. Then the roughly 3,000 deputies will give their ceremonial seal of approval — no surprise — to everything proposed. Still, the annual session is worth watching in that it provides a chance to see China’s future leaders in action. Li Qiang, who’s poised to become the premier and is already the Communist Party’s No. 2 after President Xi Jinping, and the new foreign minister, Qin Gang, may even meet the press. The meeting, in the Great Hall of the People in Beijing, starts Sunday and is expected to run a week or so.

1. What’s on the agenda?

Last year’s Covid outbreaks and restrictions ended abruptly after the controls hit economic growth, caused the budget to blow out and led to a wave of anti-lockdown protests. Even after reopening, there are still lingering effects from hurt investor sentiment, dented consumer confidence and isolation from the rest of the world. The NPC will review the government’s performance and listen to the economic and policy goals set for the year to aid the recovery. Crucially, the legislature will formally name new officials to government posts, including the the premier, vice premiers and other economic and financial leadership roles including market regulators, likely in the final days of the session. The NPC runs alongside the Chinese People’s Political Consultative Conference, an advisory body of party delegates and people from the arts, business and legal worlds. Together, they’re known as the Lianghui, or “Two Sessions.”


2. Why are the personnel changes important this year? 

Having filled the party’s top ranks with his allies at a twice-a-decade congress last October, Xi is seen as the most powerful Chinese leader since Mao Zedong. The likely appointment of more people from his coterie to high posts stokes concern about a lack of voices at the apex of power willing or able to question the leader. It could also mean a further blurring of the boundary between the state and the party.

3. Who’s likely for the new lineup? 

Premier Li Keqiang and Vice Premier Liu He are expected to be succeeded by Xi allies Li Qiang and He Lifeng, respectively. The premier has traditionally been an important economic role overseeing all government ministries, including the central bank, though the role’s influence has diminished under Xi. The vice premier is responsible for economic policy. The NPC also will appoint the central bank governor and finance minister. People’s Bank of China Governor Yi Gang is widely expected to step down, with veteran banker Zhu Hexin potentially in line to take his place. China is also poised to name regulatory veterans known for their strict campaigns against financial wrongdoing as new chiefs of the country’s banking and securities watchdogs, Bloomberg News has reported.


4. What is the rest of the agenda? 

The NPC will vote on an amendment to a law governing the legislative process and system, and examine reports from the supreme court, the top prosecutor, and the top legislature committee. In addition, it will likely vote on a plan to revamp party and government institutions, which will be debated ahead of time during a party plenary session. 

5. What does institutional change mean? 

China’s institutions were last overhauled in 2018 to consolidate the party’s power and give Xi more direct control over the country. The changes included a merging of the nation’s insurer and bank regulators that expanded the central bank’s authority, and an international development agency for Xi’s pet project, the Belt and Road Initiative. There are already signs that Xi could be strengthening his influence yet again, with the authorities planning to revive a powerful committee to coordinate financial policy. 


6. What are the new government’s priorities? 

On top of the list is to help the economy recover from the doldrums of last year, when Covid, a property downturn and a broad crackdown on private technology and education businesses pushed growth to the second-worst level since the 1970s. Now that Covid controls have been dropped, Beijing wants to stabilize the real-estate market and prevent it from triggering a crisis in the banking sector or among local governments that rely on land sales for a bulk of their income. The authorities also are looking to promote domestic investment and consumption in the face of waning global demand for Chinese goods and growing US technology sanctions. In the longer term, China is set to devise ways to reduce income inequality, lift productivity to lower the impact of a shrinking population, and enhance national security and make the nation more self-reliant.

7. What is Xi facing going in? 


Challenges remain. His government’s credibility was bruised from the drastic Covid Zero U-turn, with citizens feeling more emboldened to speak out. The economic recovery that has followed the Covid reopening is lopsided, despite a rapid rebound in mobility and demand for services, as weak property sales and exports keep weighing on the industry. On foreign policy, China’s tensions with the US worsened following the uproar over a Chinese balloon, while its partnership with Russia is becoming increasingly costly on the global stage.   

8. How will this compare to recent NPCs?

This year’s NPC is part of a broader show of the country’s return to normalcy after three years of strict virus rules. It’s kicking off March 5, the standard date, as compared to 2020 when the NPC was pushed all the way back to May because of the pandemic. This year’s meeting is also expected to return to the usual length of more than a week. NPCs in 2020, 2021 and 2022 were shortened and held for just one week.

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