How post-Covid-zero China’s parliament can revive the economy

The pandemic and restrictions came to an abrupt end last year after the containment measures hit economic growth, caused a budget surge and sparked a wave of anti-lockdown protests. Even after reopening, the effects of damaged investor sentiment, damaged consumer confidence and isolation from the rest of the world linger. The National People’s Congress will scrutinize the government’s performance and hear its economic and policy targets for this year to help the recovery. Crucially, the legislature is likely to formally appoint new officials to government positions in the final days of its session, including a prime minister, deputy prime minister and other economic and financial leadership positions, including market regulators. The NPC operates concurrently with the Chinese People’s Political Consultative Conference, an advisory body made up of party representatives and people from the arts, business and legal circles. Together they are known as the two meetings, or two meetings.

2. Why are the personnel changes this year important?

Xi Jinping, who filled the top ranks of the party with allies at the once-a-decade national congress last October, is seen as the most powerful Chinese leader since Mao Zedong. The potential for more appointments to senior positions in his inner circle has raised concerns about a lack of voices at the top of power willing or able to question the leader. It could also mean a further blurring of the lines between states and parties.

3. Who is the possibility of the new lineup?

Premier Li Keqiang and Vice Premier Liu He are expected to be succeeded by Xi’s allies Li Qiang and He Lifeng, respectively. The prime minister has traditionally been a key economic player, overseeing all government departments, including the central bank, though that role has waned under Xi Jinping. The Deputy Prime Minister is responsible for economic policy. The NPC will also appoint the central bank governor and finance minister. People’s Bank of China governor Yi Gang is widely expected to step down, with veteran banker Zhu Hexin likely to succeed him. China is also preparing to appoint a regulatory veteran known for his crackdown on financial misconduct as the new head of the country’s banking and securities regulators, Bloomberg reported.

4. What is the rest of the agenda?

The NPC will vote on legal amendments to legislative procedures and systems, and review reports from the Supreme Court, the Supreme Prosecutor, and the Supreme Legislative Council. In addition, it is likely to vote on plans to reform party and government institutions, which will be debated early at the party plenary session.

5. What does institutional change mean?

China’s institutions were last reformed in 2018 to consolidate the party’s power and give Xi Jinping more direct control of the country. The changes include the merger of national insurance companies and bank regulators, expanding the powers of the central bank, and an international development agency for Xi’s pet project, the Belt and Road Initiative. There are already signs that Mr. Xi may strengthen his influence again, with authorities planning to revive a powerful committee to coordinate financial policy.

6. What are the priorities for the new government?

Most important is helping the economy recover from last year’s slump, when Covid, a housing downturn and a broad hit to private technology and education businesses pushed growth to its second-lowest pace since the 1970s. Now that Covid controls have been lifted, Beijing hopes to stabilize the property market before it sparks a crisis in the banking sector or among local governments that rely on land sales for most of their revenue. Authorities also want to boost domestic investment and consumption in the face of weakening global demand for Chinese goods and heightened U.S. technology sanctions. In the long run, China will find ways to reduce income inequality, increase productivity to reduce the impact of population shrinkage, strengthen national security, and make the country more self-reliant.

7. What will Xi Jinping face when he goes in?

Challenges remain. His government’s credibility has been bruised by the Covid-zero U-turn, and citizens have more courage to speak out. Despite a quick rebound in demand for mobility and services, the post-Covid reopening recovery has been uneven as weak property sales and exports continue to weigh on the sector. On foreign policy, tensions between China and the United States have soured over the uproar over Chinese balloons, while a partnership with Russia has become increasingly costly on the global stage.

8. How does this compare to the nearest NPC?

This year’s NPC is part of a wider showcase for the country’s return to normality after three years of strict virus rules. It started on March 5, the standard date, while the 2020 National People’s Congress was postponed to May due to the pandemic. This year’s meetings are also expected to return to their usual length of just over a week. The 2020, 2021, and 2022 NPCs are shortened to only one week.

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