China’s leader, Xi Jinping, aims to revive the economy and instill a government of loyalists to increase the Communist Party’s control over the economy and society. The annual meeting of the National People’s Congress (NPC) convenes on March 5th with 2,977 members in attendance, and while it is the year’s highest-profile political event, its lawmaking work is limited to endorsing ruling party decisions.
Xi and other leaders are emphasizing the need to encourage spending and investment after severe anti-virus controls ended in December. The workforce has been shrinking for over a decade, putting pressure on an economy that still relies on labor-intensive industry, and the economy faces challenges from weak global demand for exports and lingering US tariff hikes in a feud over technology and security to curbs on access to Western processor chips due to security concerns.
In October, Xi awarded himself a third five-year term as party general secretary, possibly making himself the leader for life, and while he has no formal role in the NPC, he looms over every event. He has called for the ruling party to return to its “original mission” as China’s economic, social and cultural leader and carry out the “rejuvenation of the great Chinese nation.” Xi has given no details, but he has stated that Beijing should encourage spending on electric cars, medical and elderly care, home improvement, culture and sports.
Premier Li Keqiang is expected to announce a growth target of 5% to 5.5% in a speech Sunday on plans for the year. However, the International Monetary Fund and some private sector forecasters expect much weaker annual growth, as low as 4.4%. The party has indicated it is winding down anti-monopoly and data security crackdowns on tech companies that wiped hundreds of billions of dollars off the stock market value of Alibaba, Tencent, and other industry leaders.
Still, it shows no sign of backing off a campaign to tighten political control over them. The industry was shaken anew in mid-February when Bao Fan, a star banker involved in some of the biggest tech deals, disappeared. His company announced that he was “cooperating in an investigation” but gave no details. The NPC’s more important function is to provide a platform to publicize government plans and give members instructions to take home to cities and provinces.
The meeting will also see a new government announced, giving Xi an opening to install his supporters as premier, finance minister, and central bank governor. Li Qiang, a former party secretary of Shanghai who has no government experience at the national level, is in line to succeed Li as premier and head of government, and Ding Xuexiang, who has acted as Xi’s chief of staff, is expected to become an executive vice premier despite having no government leadership experience.
Xi has promoted officials with whom he has a personal history in defiance of a party tradition that required leadership candidates to have served as Cabinet ministers or in other national-level posts. The official in line to succeed Vice Premier Liu He, a US-trained economist in charge of finance and banking, is He Lifeng, the chairman of the Cabinet’s planning agency, the National Development and Reform Commission, but he has no finance background.
The annual meeting of the NPC has started with Chinese leader Xi Jinping emphasizing the need to encourage spending and investment to revive the economy and a government of loyalists to intensify Communist Party control over the economy and society. The NPC’s lawmaking work is limited to endorsing ruling party decisions, but its more important function is to publicize government plans and give members instructions to take home to cities and provinces. The meeting will also see a new government announced, giving Xi an opening to install his supporters as premier, finance minister, and central bank governor.