China is preparing for a big annual meeting to chart a growth strategy

BEIJING – The Chinese government plans to start an annual parliamentary meeting this week to approve national priorities for 2021.

The meeting of delegates, known as the “Two Sessions,” has overseen changes such as the abolition of President Xi Jinping’s terms of office in 2018 and the proposal for a new security law for Hong Kong last year.

The meeting, on the other hand, which is generally symbolic, is of particular importance this year, as it marks the beginning of China’s five-year development plan – the 14th in the country’s history – and the 100th anniversary of the Communist Party’s government. .

Authorities are expected to set out details on issues ranging from labor targets to the management of the semi-autonomous region of Hong Kong.

These comments will come as Beijing seeks to demonstrate the advances in development promises made in the country of 1.4 billion people and increase China’s competitiveness in a world impacted by the coronavirus pandemic and increasingly wary of the rise of the Asian giant .

The “Two Sessions” parliamentary meeting will begin on Thursday with the opening of the Chinese People’s Political Consultative Conference, an advisory body. The legislature of the National People’s Congress is scheduled to begin its annual meeting on Friday.

It is usually when the government publishes its economic work report, a document that collects GDP, employment, inflation and other growth targets.

Most economists do not expect the authorities to publish a GDP target this year, after making a rare decision not to do so at last year’s parliamentary meeting, which was delayed by about two months due to the pandemic. of coronavirus.

Li-Gang Liu, chief executive officer and chief Chinese economist at Citi Research, said in a note that if the report directly or indirectly sets a GDP target, the figure could exceed 7%. This is in line with the growth targets announced by different Chinese provinces and the commitment to double GDP relative to its level in 2010, Liu said.

As for monetary policy, while authorities have stressed that they will not abruptly reverse stimulus policies, “we expect China’s monetary policy conditions to visibly tighten this year,” Liu added.

China’s economy grew 2.3% last year, despite the shock of the coronavirus pandemic, as authorities rushed to control the virus’s internal spread and to support companies with reductions in cheaper taxes and loans. This GDP growth followed the expansion of 6.0% in 2019, according to official data.

In terms of employment, economists generally predict that China will try to create more than 10 million new urban jobs this year, up from 9 million last year.

The parliamentary meeting will also share details and approve China’s 14th Five-Year Plan. The development strategy of the world’s second-largest economy comes when it has reached historic trade agreements with Asia-Pacific neighbors, as it faces increasing pressure from the United States, which increasingly sees China as a competitor.

The plan’s emphasis on “increasing domestic demand, upgrading the supply chain, technological self-sufficiency and opening up domestic markets are the main tools to protect ourselves from external uncertainties,” Bruce Pang said. , head of macro research and strategy at China Renaissance. report.

In addition to specifications on how China could address national security issues in technology and energy, authorities are expected to establish plans for defense spending in 2021.

Details on how Beijing’s plans to strengthen control of Hong Kong could also come out of this year’s parliamentary session.

Late last month, Xia Baolong, director of the Hong Kong and Macao Affairs Office of the State Council and vice chairman of the Chinese People’s Political Consultative Conference, the political advisory body convened during the “two sessions” ), delivered a speech on how the electoral system should be changed so that only supporters of the central government would oversee the semi-autonomous region.

The parliamentary meeting is expected to last about ten days and include press conferences with Foreign Minister Wang Yi and Premier Li Keqiang.