China's 'Two Sessions' Opening Next Month... 'Second-in-Command' Premier Li Qiang's Debut
by Lee Sojin
Published 25 Feb.2024 14:02(KST)
Updated 25 Feb.2024 14:18(KST)
Likely to Maintain '5% Growth' Target
Interest in Defense Budget Increase and Taiwan's Position
On the 4th of next month, China's largest annual political events, the National People's Congress and the Chinese People's Political Consultative Conference (the Two Sessions, or Lianghui), will open. The CPPCC, a national advisory body, will convene at the Great Hall of the People in Beijing on the 4th, and the National People's Congress (NPC), the equivalent of the national legislature, will open on the 5th, both running until mid-month. These Two Sessions are the second meetings of the 14th term. Since last year's Two Sessions completed the lineup for Xi Jinping's third term, this year is expected to focus on domestic issues such as economic recovery.
The CPPCC is an organization responsible for the "united front" (solidarity and cooperation between the Communist Party and other groups) under the one-party system. It functions to establish a form of "co-governance" by cooperating with eight minor "democratic parties," engaging in political consultation, and proposing discussions on major national political policies as well as economic, cultural, and social issues.
The NPC is nominally the highest state authority with legislative, appointment, decision-making, and supervisory powers. In China’s one-party system led by the Communist Party, it effectively exercises the Party's full authority over state affairs. Legislation and personnel appointments are formalized through the NPC, which essentially ratifies the Party's decisions.
The biggest highlight of the NPC is the government work report delivered by the Premier of the State Council during the opening ceremony. This year's government work report will also mark the debut of Premier Li Qiang, successor to the late Premier Li Keqiang. Premier Li will present the annual economic growth target, directions for economic policy implementation, and sectoral budgets including the defense budget.
Last year, China set a growth target of around 5% at the NPC. Earlier this year, China announced that last year's growth rate was 5.2%, achieving the target.
Overseas economic analysis institutions have noted that while China's economy showed high growth due to the base effect of "with COVID" policies, this year, due to sluggish domestic consumption, a slowdown in the real estate market, local government debt issues, and deflation concerns, growth is expected to remain in the mid-4% range without significant changes.
However, Chinese authorities are widely expected to officially announce a growth target of around 5% again this year. Some local governments have lowered their growth targets compared to last year at regional people's congresses held before the NPC, but a 5-6% growth target remains the mainstream.
The Chinese Academy of Sciences' Center for Forecasting Science predicted a growth rate of around 5.3% for 2024 earlier this year. Major Chinese financial institutions also forecast a 5% growth rate this year.
The direction of economic policy is expected to emphasize the slogan of "new quality productive forces" (新質生産力), centered on the development of advanced industries recently stressed by President Xi Jinping, along with domestic demand stimulation measures such as encouraging consumption.
Additionally, support from the central government for real estate revitalization, easing local government debt burdens, and the "three new growth drivers" ? electric vehicles, batteries, and solar power ? is also expected to be highlighted.
The scale of the increase in the defense budget is another point to watch. Strategic competition between China and the United States continues. China has been increasing its defense budget for three consecutive years with the goal of achieving defense modernization by 2035. China's defense budget growth rates were 6.8% in 2021, 7.1% in 2022, and 7.2% last year. Currently, China is the world's second-largest defense spender after the United States.
However, if economic slowdown continues, there will inevitably be pressure to maintain the rapid pace of defense spending increases.
With Lai Ching-te, who has a "pro-US and independence" stance, set to take office as Taiwan's president in May, there is keen interest in what message China will send through the Two Sessions.
China has reacted sensitively to Taiwan contacts by the US and other countries following Lai's election victory. While China has been eager to reaffirm the "One China" principle, tensions across the Taiwan Strait continue due to recent incidents such as the death of fishermen near Kinmen Island, a frontline island of Taiwan. Nonetheless, China has expressed intentions to deepen exchanges with Taiwan, leaving room for stabilizing relations.
During the Two Sessions, the position of Foreign Minister, which was jointly held by China, is also a focus. Experts analyze that the return of the post to a former incumbent may be a temporary measure.
Meanwhile, Chinese-language media report that Liu Jianchao, head of the Communist Party's International Liaison Department, who has recently expanded his activities by meeting US Secretary of State Antony Blinken and others, is highly likely to be appointed as the next Foreign Minister.
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