Economic Growth Rate Forecasted Conservatively at 5% Range
Second-in-Command Li Chang and Other Top Officials Officially Confirmed
Attention on Specific Market-Friendly Policies
The third-term leadership led by Chinese President Xi Jinping will officially take office starting with the upcoming Two Sessions (the National People's Congress and the Chinese People's Political Consultative Conference), which open on the 4th of next month. Through the Two Sessions, key appointments within the cabinet, composed of Xi's close associates, will be finalized, and specific economic growth targets are also expected to be announced.
According to local media such as China Central (CC) TV on the 27th, the 14th first sessions of the Chinese People's Political Consultative Conference (CPPCC), a state advisory body, and the National People's Congress (NPC), which is equivalent to our National Assembly, will be held on the 4th and 5th of next month respectively at the Great Hall of the People in Beijing. While the rough outline of Xi Jinping's third-term leadership was revealed at the 20th National Congress of the Communist Party of China (CPC) last October, the upcoming Two Sessions will disclose major appointments such as the Premier, Vice Premiers, State Councilors, Chairman of the NPC Standing Committee, Chairman of the CPPCC, and Governor of the People's Bank of China, the central bank, along with organizational restructuring of the Party and government.
The most anticipated point is the economic growth target for this year, which current Premier Li Keqiang is expected to announce in his work report at the NPC opening ceremony on the 5th. Local experts predict that, considering the possibility of a resurgence of COVID-19, global economic slowdown, and market sentiment, a conservative target in the 5% range will be set. Although the government plans to designate this year as the first year of 'With-Corona,' promoting consumption and normalizing real estate policies, the base effect is expected to be limited.
Looking at the economic growth targets already announced by regions, only five areas set higher targets than last year’s 5.5%: Shanghai (above 5.5%), Chongqing (above 6%), Xinjiang (around 7%), Heilongjiang (around 6%), and Hainan (around 9.5%). Major provinces such as Guangdong and Jiangsu, which account for 40% of China’s total economic size, have set targets around 5%, actually lower than last year. According to the Korea Trade-Investment Promotion Agency (KOTRA), the weighted average target of the 31 provinces and cities is 5.6%, down from 6.1% last year. The actual national economic growth rate last year was only 3.0%.
Attention is also focused on the budget size allocated to key areas affecting international relations, including defense and science and technology, especially amid ongoing U.S. containment efforts and rising tensions over reconnaissance balloon issues. This is expected to provide insight into China’s future strategy. Additionally, a moderate monetary policy stance to support economic recovery, easing of real estate restrictions, and business-friendly policies are also expected to be confirmed at this Two Sessions.
The specific appointments of the new leadership are expected to show little change from the outline revealed at last October’s Party Congress. Li Chang, ranked second in the Communist Party Central Politburo Standing Committee, is expected to become Premier, with Ding Xuexiang, He Lifeng, Liu Guozhong, and Zhang Guoqing taking the four Vice Premier positions. Wang Xiaohong (also Minister of Public Security), Li Shangfu (also Minister of National Defense), Wu Zhenglong (also Secretary-General of the State Council), Xian Yiqin, and Qin Gang (also Minister of Foreign Affairs) are expected to be appointed State Councilors. Zhu Hexin, chairman of CITIC Securities, is slated to be the new Governor of the People's Bank of China. He Lifeng, known as Xi’s trusted 'economic strategist,' is expected to serve concurrently as Vice Premier and Party Secretary of the People's Bank of China. Additionally, Zhao Leji, ranked third in the Party hierarchy, is expected to become Chairman of the NPC Standing Committee, and Wang Huning, ranked fourth, is anticipated to be the new Chairman of the CPPCC.
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