China’s Two Sessions
The main annual meetings of the Chinese parliament, Two Sessions, which involves the legislative and political bodies of the country, the National People's Congress and the Chinese People's Political Consultative Conference, ended in Beijing on March 13.
Xi Jinping was confirmed for his third term as president of the People's Republic after the party congress that had proclaimed the extension of his term as secretary. A new premier, Li Qiang, former party leader in Shanghai and a person close to the president throughout his political career until the State Council, was appointed.
The new premier, Li, is from Rui'an, a town in the Wenzhou prefecture, Zhejiang province, born in 1959. He grew up in the region with the highest economic development in the country and served as the leader of all areas of eastern China, party leader of Jiangsu, head of the Shanghai municipality, and governor of Zhejiang, where he collaborated with Xi. He studied management engineering and obtained a master's degree in business and administration from the University of Hong Kong. He is considered an economic reformer, close to entrepreneurs like Elon Musk and Jack Ma, and is known for bringing Tesla's investment to Shanghai.
The new premier's task is to achieve the economic objectives declared during the National People's Congress meeting with the government work report. The two sessions aim to outline the country's development strategies; during the meetings, the deputies meet to deliberate on legislative texts concerning themes likes technological innovation, education reforms, public health, and economic targets. In particular, the estimates of GDP growth at 5 percent, inflation and consumer price index at 3 percent, and urban unemployment rate at 5.5 percent were confirmed.
Some of the reforms concern the real estate sector, particularly affected by the Evergrande crisis, which aims to deliver unfinished projects in 2023 and repay a debt of over USD 300 billion. Other strategic sectors include national security, which is allocated a significant share of the GDP, and the financial sector, with particular attention to the development of capital markets and mechanisms useful for maintaining financial stability.
In addition to the confirmation of Xi Jinping's third term as president and the appointment of the new premier, the members of the State Council were officially announced, which substantially extended the almost entire heads of every Chinese ministry to a new term. Among the reconfirmed leaders are Yi Gang, governor of the central bank, and Liu Kun, head of the Ministry of Finance, who have managed to maintain inflation rates much lower than Western countries and whose contribution is necessary for currency policies that promote the yuan as a global currency alternative to the US dollar and the euro.
Beijing's economic strategies are relevant domestically and in international relations, as China is the top trading partner for 120 countries, including the United States and the European Union.
Parallel to the political meeting, Chinese customs confirmed the trade data in the first months, with an initial decline in exports and imports, but China's surplus rose to USD 116 billion in January-February 2023, compared to USD 109 billion in the same period last year.
On the one hand, trade towards advanced economies has decreased, while trade with emerging regions has increased: Southeast Asia, South America, and Russia. Despite reducing global exports, Beijing increased exports to Singapore, the Philippines, Thailand, South Africa, and Brazil.
China's top trading partners remain ASEAN with USD 138 billion in trade, the European Union with USD 123 billion, and the US with USD 101 billion. The trade surplus with the United States reached USD 41 billion in the first two months of the year.
China is renewing its leadership and preparing for upcoming political and economic events, including the Boao Forum in March, considered the Asian Davos, which hosts government leaders and entrepreneurs from the Far East and is based in China, and the Haikou consumption fair in April, where Italy is the guest of honor with its own pavilion, as well as bilateral meetings and economic missions with major partners, including Emmanuel Macron and Giorgia Meloni, whose official visits to China are planned in the coming months.
The new Premier Li Qiang concluded the parliamentary sessions with a press conference on March 13, confirming at the end of the National People's Congress that China aims for a more balanced development and an improvement in the quality of life as its primary objective, with attention to unemployment, per capita income, education, healthcare, environment, and technological development.
Li confirmed the commitment to achieve the 2023 economic targets despite the current complexity, thanks to the country's positive outlook. He also confirmed that the assumptions of decoupling with the United States are unrealistic considering the interdependence of the two markets and that the government will strive to provide further incentives and attraction policies to private companies.
Furthermore, the Chinese premier emphasized the importance of China's role in global governance.