The government work report delivered by Premier Li Keqiang on behalf of the State Council at the Second Session of the 13th National People's Congress highlighted the government's willingness to deepen reforms to keep China's economy moving and to keep it insulated from economic turbulences coming from abroad. The challenge becomes greater because according to the World Bank, the global economy is expected to slow to 2.9 percent in 2019 because of weakening trade and reduced international investment.

The GDP growth target set by the Chinese government for this year is between 6-6.5 percent. It is a realistic goal and probably will be kept the following year when China is expected to achieve the first centenary goal of building a moderately prosperous society in all respects. This performance is still higher than the GDP growth rates predicted by the World Bank for high-income countries for 2019 and 2020, which is expected to be around 2 percent and 1.7 percent respectively.

The slowdown in the Chinese economy is being very smooth and this fact will allow the government to make some adjustments in its economic policy with a comfortable margin of maneuverability and predictability. A hard slowdown in the Chinese economy would be harmful not only to China but to the whole world. After all, China has become one of the largest investors in the world and is also the largest trading partner of more than a hundred countries and regions.

Facing a scenario of uncertainty about the future of the global economy, the government announced a series of measures to be taken and goals to be achieved. Three key measures are as follows: a cut in government spending; enhanced focus on the domestic market; and the goal of attracting more investments. In this sense, the government expects to reduce general expenditures by 5 percent, promote consumption growth through measures that increase personal income and consumption capacity of both the urban and rural population, and also increase state and private investment. To this end, the government has committed to expand public investment in infrastructure, allocating RMB 2.6 trillion in the construction of railways, roads, and waterways, favoring business and connectivity within the country itself. In addition, in order to create the conditions for financing key projects and defusing local governments' debt risks, China will issue 2.15 trillion yuan of special local government bonds. This creates an opportunity for private investors. Measures to attract foreign capital such as the reduction of controls on market access, shortening the negative list for foreign investment, and permitting wholly foreign funded enterprises to operate in more sectors are also worth highlighting.

For the general population, some of the most important targets are having a job, a house, and access to good health services. In these areas, for this year, the government expects to generate 11 million new urban jobs, maintain a stable housing market, and develop care services for the elderly and children, facing problems due to the demographic shift as the number of people in China aged 60 and above has reached 250 million and the country is having difficulties in maintaining a certain birth rate to ensure that population replacement is assured.

The challenges are countless in a country with the size and complexity of China. But the Chinese governance model has proven to be competent and effective in its method and execution. On the eve of celebrating the 70th anniversary of the founding of the People's Republic of China, the country today has an international dimension that gives it a position of one of the leaders of the world. It is not without reason that the report mentioned China's support for the reform of the World Trade Organization and the country's commitment to safeguarding economic globalization. This shows the Chinese government's willingness to exercise its leadership in defending multilateralism and international organizations, and also the inevitable relationship between China's domestic economic policies and the country's international performance. For this reason, Premier Li’s report at this Second Session of the 13th National People's Congress is a document that governments around the world should pay more attention to.

___________

Evandro Menezes de Carvalho is the executive editor-in-chief of the Portuguese edition of China Today magazine, and Coordinator of the Center for Brazil-China Studies of the Getulio Vargas Foundation (FGV), Brazil.

Related

Go to Forum >>0 Comment(s)