Chinese President Xi Jinping attends the opening session of the Chinese Peoples Political Consultative Conference, at the Great Hall of the People, in Beijing, on March 4.Kevin Frayer/Getty Images
China has cancelled the premier’s news conference that traditionally helps kick off the annual National People’s Congress, the rubber-stamp parliament meeting in Beijing this week, amid major headwinds threatening the world’s second-largest economy and uncertainty about the country’s direction.
Since 1993, the country’s premier has held a news conference at the outset of the NPC, taking questions from both state and foreign media. Such events were always carefully stage-managed, with questions vetted in advance, but they were also the only access even Chinese media had to a top official.
On Tuesday, Premier Li Qiang, China’s No. 2 official, will present a government work report at the NPC, in which he will analyze the past year and lay out an agenda for the year to come, including a key GDP growth target. But NPC spokesman Lou Qinjian said Monday that the premier’s traditional news conference has been cancelled for the foreseeable future. Instead, lower-ranking ministers – even less likely than Mr. Li to go off script – will speak to the media on specific topics this week.
No reason was given. Mr. Li is a close ally of Chinese President Xi Jinping, who hand-picked him for the No. 2 role. But in the past decade, the role of premier – the nominal head of government, with responsibility for the economy – has been significantly downgraded, with economic decision-making centralized under Mr. Xi.
Those decisions have been raising significant questions of late, as China faces numerous economic challenges.
China’s economy has slowed drastically from the runaway growth it enjoyed during the 2000s and 2010s. It has struggled to bounce back from the pandemic, when the country was largely closed off to the rest of the world. Property sales are way down, and consumer and producer prices are in deflationary territory.
On the bright side, sustained government intervention appears to have finally stabilized the stock market, after Chinese and Hong Kong equities lost $8-trillion in value over the past three years.
Ethnic minority delegates arrive to attend the opening session of the Chinese People's Political Consultative Conference.Andy Wong/The Associated Press
Like foreign observers, many Communist Party cadres are watching the NPC closely, having spent months reading the tea leaves of pronouncements as a collapsing housing market and massive local government debt drag on provincial budgets. Direction on priorities should have come at a high-level economic summit known as the Third Plenum, which is usually held a few months after the start of a new leadership term but has been repeatedly delayed for unclear reasons.
“Everybody is still waiting,” said Nis Grünberg, the lead political analyst at the Berlin-based Mercator Institute for China Studies (MERICS). “People are thirsting for some economic direction or planning.”
For decades, the party used strong economic growth to justify its tight control over Chinese politics. There is now widespread public anger over the state of the economy – youth unemployment is particularly high – in a country with a poor safety net for those whose savings have been wiped out by property or stock market slumps.
On Tuesday, Mr. Li is expected to announce a growth target of “around 5 per cent” and a deficit-to-GDP ratio of 3 per cent, with some mild stimulus measures and words of encouragement for foreign investors, who have pulled large amounts of capital out of the country in recent months.
A stimulus could help take some of the weight off ordinary households and help boost domestic spending, something Beijing has long tried to do, but analysts do not expect any major intervention, pointing to Mr. Xi’s repeated warnings against such action and his distaste for so-called “welfarism,” which he says “encourages laziness.”
“The clear indicators, when you look at where capital has been actually flowing for the last several years, have been very consistent,” said Jacob Gunter, an economic analyst at MERICS. “It’s flowing away from households, from investment in real estate and such, and flowing towards the supply side of the economy, into fixed-asset investment, industrial upgrading and industrial expansion.”
Beijing, he said, is focused on “forcing down this bitter medicine” to address perceived long-term risks to the stability of the party state, even at the cost of short-term economic pain.
Bus hostesses hold up signs to guide delegates after the opening session of the Chinese People's Political Consultative Conference.Ng Han Guan/The Associated Press
“From Xi Jinping’s perspective, he has a finite amount of resources available to him in terms of capital that you can allocate to different actors to achieve different goals,” Mr. Gunter said. “The problem with putting money toward households and consumers is they might buy the wrong things or might just save their money. They might invest more in real estate, and those are not the more geopolitically oriented and long-term strategically oriented goals that Beijing has in mind.”
Previewing his work report in January, Mr. Li said China has “withstood external pressure and overcome difficulties at home to achieve progress in boosting high-quality development.”
The latter slogan has been used dozens of times by top officials in the past year, but its meaning is not exactly clear. State media have referred to “scientific and technological innovation” as being key to high-quality development, which lines up with efforts to boost sectors such as domestic chip production, but Mr. Xi has also described the term as the “hard truth of the new era,” suggesting it encompasses more fundamental – and potentially difficult – reforms.
As well as economic measures, the agenda for this year’s NPC includes items such as the defence budget – expected to increase once again amid tensions with the United States and in the South China Sea – and some social issues. This may include raising the retirement age and more incentives to have children.
One thing that is not on the agenda is personnel appointments. Observers had predicted the meeting might be used to announce a replacement for former foreign affairs minister Qin Gang, who was removed from that role last July.