China’s ‘two sessions’: key takeaways from the opening of the National People’s Congress

Teddy Ng, South China Morning Post

Posted at Mar 05 2021 09:41 PM

China’s ‘two sessions’: key takeaways from the opening of the National People’s Congress 1
A TV screen showing news over the opening session of the National People's Congress (NPC), is seen in Hong Kong, China March 5, 2021. Tyrone Siu, Reuters. 

Premier Li Keqiang kick-started China’s parliamentary session by outlining the economic growth target for the nation and pledging to stop foreign interference in Hong Kong.

In his 30-page government work report delivered at the National People’s Congress on Friday morning, Li said China still faced a series of challenges, ranging from lack of growth momentum to problems arising from the Covid-19 pandemic. He pledged measures to boost long-term growth, with a focus on innovation and tax cuts.

In addition, a full document on the nation’s 14th five-year plan was tabled to the legislature.

Here are the key takeaways from the opening of the NPC.

Guarding Hong Kong against foreign interference

Li said the central government would ensure the “comprehensive and accurate” implementation of “one country, two systems”, “Hong Kong people governing Hong Kong” and “high degree of autonomy”.

“We will resolutely guard against and deter external forces’ interference in the affairs of Hong Kong and Macau. We will support both regions as they grow their economies and improve people’s lives, so as to maintain the long-term prosperity and stability of Hong Kong and Macau,” he said.

Expanding on the plan to reform the Hong Kong electoral system, NPC Standing Committee vice-chairman Wang Chen said there were loopholes in Hong Kong that allowed foreign forces to interfere in the city’s affairs. Some even used their public office to call for such interference.

“The risks in the system need to be removed, and a democratic electoral system with Hong Kong characteristics needs to be established,” he said.

A growth target of “above 6 per cent”

Bracing for more fallout from the Covid-19 pandemic, Li said China’s GDP growth for 2021 would be “above 6 per cent”.

The Chinese economy still faced challenges, including weak domestic consumption and struggles for small and medium-sized enterprises, and the risk of unemployment was on the rise, he said.

To offset those challenges, Li said China would try to keep the urban unemployment rate at about 5.5 per cent, and aim for a consumer price index of about 3 per cent this year.

Included in government measures was an increase in the value-added tax payment threshold from 100,000 yuan (US$15,500) of monthly sales to 150,000 yuan.

Inclusive loans to micro and small businesses by large commercial banks will increase over 30 per cent this year.

In the coming five years, the government will raise the retirement age, which is currently 60 years of age for men and 55 for women.

A strong boost for national defence

Li said training for the People’s Liberation Army would be boosted, raising their readiness for battle. He said better coordination to address security risks was needed.

The military budget for 2021 would increase to 1.355 trillion yuan. The 6.8 per cent increase is slightly higher than the 6.6 per cent growth last year.

Earlier, analysts expected defence budget growth would be lower, at about 6 per cent, because China was still battling the Covid-19 pandemic.

A separate document on the nation’s upcoming five-year plan said measures had to be taken to ensure a strong military by 2027.

Those measures include upgrading weapons, focusing more on disruptive technology, and supporting the defence sector.

More spending for innovation R&D, and welcoming foreign talent

Li said grasping core technology and being self sufficient in technology was key to the country’s development.

“Basic research is the wellspring of scientific and technological innovation. So we will ensure the stable functioning of funding mechanisms for basic research and boost spending in this area by a considerable sum,” Li said.

A 10-year action plan to boost basic research would be formulated, and the central government’s expenditure on basic research will increase 10.6 per cent in 2021.

“We will enhance the capacity of enterprises to make technological innovation, unlock the creativity of talent, and improve the systems and mechanisms for making scientific and technological innovation,” he said.

China’s investment in research and development (R&D) will grow at an annual rate of at least 7 per cent over the next five years.

The five-year development plan said policies would be changed to allow more foreign talent to work in Chinese science institutions. China would also explore “science and technology immigration”.

Going green

The NPC opened amid smoggy weather in Beijing, with authorities classifying the air pollution on Friday as serious.

Li, who had previously described tackling air pollution as a war, said the battle against pollution would continue. Toxic air pollution and urban water pollution would be eliminated in the next five years, he said.

China will also implement climate control targets and expedite the shift towards a more environmentally friendly economy.

He said China would cut its energy intensity by 13.5 per cent and carbon emissions per unit of GDP by 18 per cent.

To serve China’s goal to be carbon neutral by 2060, Li said China would make an action plan to ensure carbon emissions peaked by 2030.

As part of the efforts, China would develop nuclear power in a “proactive and orderly” manner.

And projects to improve soil quality in 100 counties facing serious land pollution would kick off in the next five years.

Enforcing pandemic control

Li said efforts to contain the Covid-19 pandemic should not be relaxed, and the nation still had weak points.

He said measures were still needed to stop the emergence of cluster outbreaks, and the government should provide free vaccinations.

Authorities throughout China together spent more than 400 billion yuan (US$62 billion) on containing the coronavirus last year.

According to the budget and expenditure report, spending by customs authorities in this area forced general public expenditure up 8 per cent over the budget to 173.5 billion yuan.

On the diplomatic front, Li said China provided 220 billion masks, 2.3 billion pieces of protective gear and one billion test kits to other nations. China had also worked with others on vaccine development.

Accelerating China’s involvement in international trade

On the global trading regime and China’s global investment, Li said China would continue to promote its coronavirus-hit Belt and Road Initiative, the country’s signature investment and foreign policy initiative.

China will also improve the performance of its outbound investment amid growing concerns about its economic clout and increasingly aggressive diplomacy.

China is committed to deepening bilateral and multilateral economic cooperation and safeguarding the multilateral trading system, according to Li.

China aims to implement the Regional Comprehensive Economic Partnership (RCEP), a trade deal by 15 Asia-Pacific nations, and wrap up the signing of the China-EU Comprehensive Agreement on Investment.

“We will accelerate China’s free-trade negotiations with Japan and the Republic of Korea. China will actively consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. We will promote the growth of mutually beneficial China-US business relations on the basis of equality and mutual respect. China stands ready to work with other countries to achieve mutual benefits on the basis of greater mutual opening,” he said.

Pang Zhongying, an international relations professor at Ocean University of China, said China would still focus on ties with the United States, but at the same time would strengthen economic partnerships with the European Union, Asean and Japan.

“China is aware of the risk of losing the US market and cooperation, such as those in tech area, and is seeking alternative from other nations,” he said.

Additional reporting by Shi Jiangtao, Tony Cheung, Zhuang Pinghui and Zhou Xin

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