Premier Li Keqiang of China announced a plan for a consumer-led revival of China’s economy during the opening of the National People’s Congress (NPC) session on March 5, 2023. The announcement comes as the country faces significant economic challenges, including weak global demand for exports, lingering U.S. tariff hikes, and curbs on access to Western processor chips.
The government aims to boost domestic consumption and reduce the country’s reliance on exports and investment, which have been the main drivers of China’s growth over the past few decades. Premier Li’s plan includes promoting self-sustaining growth through consumption-led policies, investing in domestic technology and innovation, and supporting state-owned enterprises while promoting competition and innovation in the private sector.
The Chinese economy has been slowing down over the past few years, and the COVID-19 pandemic has exacerbated this trend. The government’s plan aims to stimulate economic growth by increasing household spending and reducing the country’s dependence on exports and investment.
In addition to the economic challenges, China is also facing political challenges, including President Xi Jinping’s emphasis on the ruling party’s dominance and the promotion of officials with whom he has a personal history. President Xi has consolidated power and is expected to continue to do so, which could have implications for China’s domestic and foreign policies.
The Ministry of Finance announced a 7.2% budget increase for China’s military wing, which is consistent with China’s growing military ambitions in recent years. This increase in military spending comes as China seeks to expand its global influence and assert its territorial claims in the South China Sea and other disputed areas.
The NPC session also discussed the importance of environmental protection and green development. China has been criticized for its poor environmental record and high levels of pollution, but the government has been taking steps to address these issues. Premier Li announced that the government would be investing in renewable energy and reducing carbon emissions, which is in line with China’s commitments under the Paris Climate Agreement.
China’s new leadership team faces significant challenges in reviving the economy and maintaining stability. The government’s plan to promote self-sustaining growth through consumption-led policies, investment in domestic technology and innovation, and support for state-owned enterprises could help to address these challenges. However, the role of state industry and the promotion of officials with personal ties to President Xi Jinping may also have implications for China’s future direction.