Welcome to a special edition of Asia Daily focused on China’s annual Two Sessions (lianghui) meetings! For the next week, The Asia Cable will be providing daily news and commentary updates surrounding the National People’s Congress and the Chinese People's Political Consultative Conference as China sets its legislative agenda for the next year. Tomorrow’s schedule can be found here.
News
Xi Jinping tells scientists to fight the tech battle well. During China's significant political gathering, President Xi Jinping tasked the nation's scientific community with excelling in technological advancement amidst global competition. Xi's address is a key element of China's strategic emphasis on science, technology, and education as foundational pillars for the country's resurgence and self-sufficiency in critical technologies. This initiative reflects China's ongoing efforts to foster innovation and economic growth in response to international challenges. Sylvie Zhuang, South China Morning Post, March 6
'No serious mass political incidents' in Tibet last year, says senior official. A Tibet official reported no significant protests in Tibet last year, emphasizing efforts on national unity and ethnic solidarity. This comes amid ongoing international concerns over human rights and cultural assimilation in the region. The official highlighted economic development and Mandarin's prevalence, promising continued Sinicisation of Tibetan Buddhism. International calls for rights protections contrast with China's assertions of stability and economic support in Tibet. Laurie Chen, Reuters, March 6
China’s 5% GDP growth target demands ‘hard work’, leaders insist while flagging hopes and risks. Chinese leaders have set a 5% GDP growth target for the year, emphasizing the need for diligent efforts amidst various challenges. This goal reflects a cautious optimism, balancing the country's aspirations for economic recovery with the recognition of significant internal and external risks. Achieving this target will require focused strategies to navigate the complexities of the current global economic landscape. Frank Tang, South China Morning Post, March 6
There is ample room for China's monetary policy: central bank governor. Pan Gongsheng, the governor of the People's Bank of China, highlighted the flexibility in China's monetary policy, emphasizing a balanced approach between growth and risk management. With an average banking reserve requirement ratio at 7%, there's scope for adjustments to support economic stability and development. The central bank plans to utilize a range of tools to maintain liquidity, stabilize prices, and support high-quality economic growth. Xinhua, March 6
Xi Jinping says while China pursues ‘new productive forces’, it must avoid economic bubbles. At China's annual parliamentary sessions, President Xi Jinping emphasized the importance of advancing new productive forces to catalyze growth, cautioning against creating economic bubbles and irrational investments. He highlighted the balance between innovation and the preservation of traditional industries, amid efforts to strengthen China's position in the global technological race without compromising economic stability. Frank Chen, South China Morning Post, March 6
Hong Kong CPPCC delegates must be ‘100%’ committed to supporting Article 23 security law, says top state leader on city affairs. Vice-Premier Ding Xuexiang emphasized the importance of full commitment from Hong Kong's CPPCC delegates to supporting the enactment of Article 23 security legislation. This directive aims to maintain national unity and strengthen ethnic solidarity within the region. The call for unwavering support underscores the significance of this legislation in Hong Kong's legal and political landscape. Natalie Wong, Willa Wu and Zhao Ziwen, South China Morning Post, March 6
China hails 'favourable' economic conditions, despite trade woes. Despite challenges such as a real estate crisis, weak exports, and high youth unemployment, China's leadership is optimistic about achieving strong economic recovery this year. At the annual "Two Sessions," officials projected a "favourable" outlook, emphasizing the consolidation of economic recovery amidst "hidden risks" and a complex international environment. The government aims for around 5% GDP growth, highlighting efforts to support the economy through state interventions and acknowledging the difficulties ahead. Channel News Asia, March 6
Long Form
Xi Jinping's "New Quality Productive Forces": Meaning, Significance, and Implementation. Xi Jinping introduces "new quality productive forces" as a key focus during the deliberation of the Jiangsu Province delegation at the 14th National People's Congress. This concept champions the integration of scientific and technological innovation with traditional industries to drive high-quality development. It reflects China's strategic shift towards a sustainable economic model that leverages high-tech, efficiency, and quality. The approach underscores the importance of local adaptation and the avoidance of a one-size-fits-all model, promoting a diversified, modern industrial system. Highlighting Jiangsu Province's role, the initiative aims to strengthen emerging industries and upgrade traditional ones, fostering an ecosystem of innovation and high-end, smart, green development. Jiang Jiang, Li Huiyan, Rosie Sun,
, March 5Round-Up of China's 2024 Work Report. China's 2024 work report, as summarized by Jens Presthus, suggests a continuation of the political determination of GDP growth, aiming for about 5% to meet key performance indicators like job creation. The report indicates a shift towards reducing local government powers in favor of a more centralized investment model, with a 700 billion RMB investment pool favoring effective projects. Despite limited direct support for boosting household demand, there are notable initiatives such as public housing investment and potential reforms to the hukou system, which could, in the long run, enhance domestic consumption. The "new quality productive forces" and a focus on manufacturing and technological breakthroughs underscore China's strategic pivot to high-tech industries amidst geopolitical tensions and competition. The unchanged stance on real estate reflects Beijing's intent to recalibrate the sector towards providing affordable housing. These policy directions have implications for slower growth, changing consumer preferences, commodity prices, and global inflationary dynamics, amidst China's evolving macroeconomic landscape. Jens Presthus,
, March 6China's 2024 Government Work Report: Insights and Interpretations. The 2024 Government Work Report, presented at the opening of the Second Session of the 14th National People's Congress, underscores China's strategic adjustments in response to complex internal and external challenges. Highlighting a commitment to high-quality development, the report sets a GDP growth target of around 5%, emphasizing innovation and education as key drivers. Special attention is paid to maintaining a 3.0% deficit ratio, reflecting a significant central government leverage and a proactive fiscal stance aimed at sustainable development. The report candidly addresses China’s economic dilemmas, including the need for effective demand and risk management, while advocating for a balanced policy approach that considers market entities' perspectives. Notably, the report suggests a move towards dismantling the hukou system, potentially enabling millions to contribute more significantly to urban economies. Amidst a backdrop of global uncertainties and domestic pressures, the report's focus on scientific advancement and regional economic optimization reveals China's navigational strategy towards resilience and growth. Jia Yuxuan, Zichen Wang, Jiawen Zhang,
, March 6Round up of China's 2024 Work Report. The analysis of China's 2024 work report reveals no surprises in economic strategy, emphasizing education and potential hukou system reforms. It critiques the politically determined GDP growth targets, highlighting their disconnection from real economic drivers. The shift from local to central government control suggests a move away from investment-led growth, though skepticism remains about measures to boost household demand. Notably, the potential hukou reforms could enhance migrant workers' consumption power, with commitments to improving parental leave and childcare services. The focus on manufacturing and technological advancements is seen as a response to geopolitical tensions and internal challenges, while the unchanged real estate policy indicates a continued push for affordable housing over market speculation. Jens Presthus,
, March 6Chinese premier's canned press event and maiden report card - what clues do they reveal about China? Premier Li Qiang's speech at China's National People’s Congress emphasized economic growth targets and effective policy communication. The absence of a traditional press conference highlights a controlled approach to policy information and reinforces the premier's role as an implementer of the Chinese Communist Party's decisions, indicating a consolidated power structure under President Xi Jinping. Channel News Asia, March 6,