China's Two Meetings: First Impressions

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The highlight of China’s political year is usually the “Two Meetings” or Liang Hui, China’s Parliament, the National People’s Congress (NPC) and the China People’s Political Consultative Conference (CPPCC). This year was the first time that Li Qiang, China’s premier since last year March, did the honours to read out the government work report (GWR). In Parallel, the Planning Report and the Budget Report were submitted for review to the NPC. The GWR, duly approved by the communist party’s Politburo meeting of February 29, contained few surprises. It revealed the projected GDP growth target of “around 5 percent” and offered some modest macroeconomic policies to support this (Table 1). This support will be needed, as the consensus forecast of Focus Economics, a research firm, put the average expectation among banks and other analysts at 4.6 percent, the same as the IMF projection in January this year. Provincial governments, which have already published their forecast in the past couple of months, projected on average a growth rate of 5.4 percent, with few provinces below 5. This suggests that the “around 5 percent” had already been agreed at the Central Economic Work Conference of the Central Committee of the Communist Party of China (CPC) in December last year. Early reactions on the target call it “ambitious” and this is likely to have been intentional. One of the key and intractable problems the government has been struggling with is the expectations of people and investors ever since the COVID-19 lockdowns and regulatory crackdown on internet platform companies and others…