The second meeting of the 14th National People's Congress of the Communist Party of China (CPC) opened on the morning of March 5. Premier Li Qiang delivered his first government work report since taking office. The report mainly reviews China’s economic and social developments last year and outlines this year’s policy direction and blueprint, focusing on China’s goals for economic and social development and work plans.
Li Qiang stated that China sets its target for economic growth at about 5% this year, which is about the same as that in last year and consistent with the views of most experts and scholars in Europe and the U.S. China is facing a less than optimistic outlook this year. The internal and external environments of China have not seen significant improvement. Besides the increasingly complex, severe and uncertain external environment, China also needs to overcome bottlenecks in the domestic circulation, including insufficient effective demand, overcapacity in some sectors, lackluster social expectations and certain risks and hidden problems. Moreover, this year’s reports of local Two Sessions revealed that seventeen provincial-level governments (provinces, municipalities and regions), including Shanghai and Guangdong, failed to achieve their economic growth targets for 2023. Sixteen provincial-level governments lower their GDP targets in 2024, while eleven set the same targets as last year. Hainan and Tibet have set the highest GDP targets of around 8%. The lowest is Tianjin’s 4.5%. Most governments at the provincial level set their growth targets at around 5%. Consequently, China’s growth forecast of 5% is relatively close to reality. This also makes the so-called “effectively upgrade and appropriately expand China’s economic output” more plausible and convincing.
In regard to how to achieve the above goals, Li Qiang continued the narrative presented at the Central Economic Work Conference at the end of last year, reiterating that China will pursue progress while ensuring stability, consolidate stability through progress and establish the new before abolishing the old. The work report laid out China’s ten major tasks for this year, including striving to modernize the industrial system, invigorating China through science and education, expanding domestic demand, continuing to deepen reform, pursuing higher-standard opening up, ensuring both development and security, making sustained efforts to deliver in work relating to agriculture , rural areas and rural residents, promoting integrated development between urban and rural areas and advancing coordinated development between regions, enhancing ecological conservation as well as ensuring and improving the people’s wellbeing. Compared with the report delivered by the outgoing former premier Li Keqiang last year, the latest one has similar contents with only some modifications of narratives and sequence of priorities. Nevertheless, narratives like developing new quality productive forces and pursuing high-quality development may indicate important strategies to highlight Xi Jinping's political achievements in the future.
Moreover, according to the Statistical Communiqué of China on the 2023 National Economic and Social Development released by China’s National Bureau of Statistics on February 29, China's GDP increased by 5.2% year-on-year in 2023. The contribution of the final consumption expenditure and the gross capital formation to GDP growth rate was up by 4.3 percentage points and 1.5 percentage points respectively, while that of the net exports of goods and services to GDP growth rate dropped by 0.6 percentage points. These numbers indicate that expanding domestic demand has a relatively obvious effect amid weakening external demand, especially as the contribution of consumption to GDP growth is still modest. That was why Xi Jinping presided over the 4th meeting of the Central Financial and Economic Affairs Commission to study the issues of large-scale equipment renewal and trade-in of old consumer goods on February 23, ahead of the Two Sessions. Then the executive meeting of the State Council deliberated and adopted the "Action Plan for Promoting Large-scale Equipment Renewal and Trade-in of Old Consumer Goods" on March 1. China clearly hopes to encourage private sector investment and household consumption to accelerate the cultivation of new quality productivity and achieve high-quality development. Despite the above favorable policies, the revision and enactment of the Anti-Espionage Law last year and the subsequent revision of the "Law on Guarding State Secrets" on February 27 this year have shown an unfriendly attitude toward private and foreign enterprises. The growth of household income also lacks new momentum. China may encounter difficulties in expanding private consumption.
Li Qiang's work report also touches on religion, national defense, Hong Kong, Macao and Taiwan, diplomacy and other issues. He reiterated that China will implement the CPC’s overall policy for the new era on resolving the Taiwan issue, adhere to the one-China principle and the 1992 Consensus, resolutely oppose separatist activities aimed at Taiwan independence and external interference, promote the peaceful development of cross-strait relations and deepen integrated cross-strait development. The rhetoric repeats the same old lines. However, under the leadership of the CPC Central Committee, it is not surprising that no fresh narrative was presented as Li Qiang stated that the current State Council, when taking office, made clear that it would fully implement the decisions and arrangements of the CPC Central Committee while remaining action-oriented and doing solid work. Moreover, Li Qiang will not hold a press conference in accordance with past practice after the annual National People’s Congress meetings, indicating the State Council’s weakened status and importance. Even if Li Qiang has great ambitions, he would not dare to make undrafted comments in his first work report.
China has defined 2024 as a critical year to accomplish the goals and tasks listed in the 14th Five-Year Plan. According to the interim assessment report of the 14th Five-Year Plan presented by Zheng Shanjie, chairman of the National Development and Reform Commission (NDRC), on December 26 last year, progress in sixteen of the twenty major indicators in five aspects—economic development, innovation, people's well-being, ecology and security—are basically in line with or faster than expectations. Four indicators, including reducing energy consumption and carbon emissions, are lower than projections. Meanwhile, China vows to resolutely follow the guidance of Xi Jinping thought on socialism with Chinese characteristics for a new era and act on Xi Jinping's economic thinking. China also touts achievements like integrated development in the Beijing-Tianjin-Hebei region to promote Xi Jinping's personality cult with high-profile propaganda. It is obvious that China continues to use political thinking to address professional issues, and the so-called “must adopt a problem-oriented approach" is in essence a lie.
（Sheng-Tai Hsu, Contract Research Fellow of the Institute of Chinese Communist Studies）
（Excerpt translated to English by Cindy Li）
