Eye on China is a weekly bulletin offering news and analysis related to the Middle Kingdom. This week, we cover Li Keqiang’s big speech and all the Two Sessions action; developments related to Huawei, China’s ‘mediation’ efforts and trade balance with India and much more.
I. Two Sessions
China’s annual political sessions, i.e., the meetings of the NPC and CPPCC, are currently underway in Beijing. It’s a time when there’s a lot of noise, with Here are the important developments so far that you should note:
- Li’s Speech: One of the big highlights of the NPC session is the Premier’s Government Work Report, the Chinese equivalent of the State of the Union. Here’s a breakdown of Li Keqiang’s speech (Unofficial translation/Official highlights):
- China is still in a period of “strategic opportunity.” There, however, is “profound change” in the “external environment.” There are “serious challenges caused by the growing pains of economic transformation.” China’s “innovation capacity is not strong.” And “there is still public dissatisfaction in many areas, such as education, healthcare, elderly care, housing, food and drug safety, and income distribution.”
- In terms of the last year, China’s GDP grew at 6.6% and is at RMB 90 trillion. 13.61 million new jobs were created. Surveyed unemployment rate is at around 5%. Service sector’s GDP contribution is around 60%. China’s total volume of trade in goods exceeded 30 trillion yuan, and utilized foreign investment totaled $138.3 billion. Rural poor population reduced by 13.86 million.
- Li spoke about all the key areas of interest going forward, i.e., maintaining growth in order to ensure employment; the three tough battles of managing risks, ending poverty and tackling pollution; and pursuing supply-side structural reform as the “main task;” all round opening up; pursuing innovation-driven development; coordinated development across regions.
- Key goals for 2019 are: GDP growth of 6-6.5%; Over 11 million new urban jobs; A reduction of over 10 million in the rural poor population; Personal income growth that is basically in step with economic growth; A drop of around 3% in energy consumption per unit of GDP.
- There’s a whole list of promises that Li makes and steps that he outlines in order to achieve the broad goals of the government. Expect more of what one’s seen in the past year, i.e., no large-scale stimulus, better targeting of investments, a range of tax cuts, subsidies and support for emerging industries, support for rural revitalisation and new urbanisation, etc.
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