Two Sessions-2023: Blue Print for a Prosperous Future

April 18, 2023

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One of China’s most significant annual political assemblies, the “Two Sessions,” offers a crucial window for the international audience to fathom China’s development accomplishments, objectives, governance framework, diplomatic convictions, and global endeavors. It also provides the international community with a clear picture of the whole-process of people’s democracy in China. By combing political and financial goals, and through the process of consensus-building, this platform allows public opinion from bottom to top to be part of policy making. 

The “Two Sessions” is short for the annual meetings for the National People’s Congress, the primary legislative body in China, and the National Committee of the Chinese People’s Political Consultative Conference, the top political advisory body, normally starting in early March. In addition to economic goals and policy orientation, it usually sets the tone for geopolitics. 

In the past, the Two Sessions have seen a growing debate relating to human security, employment, entrepreneurship, education, healthcare, housing, and other livelihood-related issues which Chinese people worry about most. This year, major reforms were expected from the Two Sessions. After the zero-COVID restrictions were eased in December 2022, it was the first Two Sessions to be largely unruffled by the pandemic. As expected, Two Sessions-2023 demonstrated how the state would provide political and policy support for China’s economy and people’s livelihood, which have been harmed by the COVID-19 pandemic. Major policy announcements frequently came out of the annual event. It focused on social development, a more equitable distribution of national income, raising the standard of living for Chinese citizens, achieving the goal of creating a prosperous society in all respects, promoting a balance between urban and rural areas, combating inflation, promoting stable economic growth, and intensifying efforts to narrow the economic gap between the rich and the poor, among other concerns. Its special focus was on creating meaningful plans to combat the growth and escalation of unemployment, which came about as a result of many firms ceasing operations when COVID-19 broke out. 

As per policy planning by Two Sessions-2023, the provincial representatives stressed the significance of their investigation into the requirements of private financial markets in their provinces. After determining the rate of unemployment, they focused on those who lost their jobs during the pandemic. For provincial representatives, it is crucial to protect the underprivileged, marginalized groups, as well as the impoverished, who had been adversely impacted by the pandemic. Compared to prior generations, China’s Gen Z was significantly more concerned about job stability (62%), and chances for a better lifestyle (56%), according to a Wyman study done in October and released in December 2022. Nevertheless, China’s development is still bumpy and meager. Currently, it is concentrated on meeting people’s fundamental requirements. Moving forward, the emphasis will be on providing individuals with a life that is of higher quality. As per Two Sessions-2023 guidelines, China will particularly increase its potential for technological and scientific advancements, establish cutting-edge industrial infrastructure, and move towards green growth. In this case, increasing the confidence of ordinary people and improving their living conditions should be the first step. During the Two Sessions-2023, the deputies reviewed strategies to lessen the burden on small and medium-sized businesses, aid in the market’s recovery, broaden and enlarge the pool of potential employment prospects, and place an exception on the service sector. In spite of that, the international community has concerns over how China will coexist with the rest of the world after the pandemic. The following debate tries to look at some of the important variables to be discussed and considered while chalking out a future map for economic growth and a better livelihood in China. These variables are resilient economic growth, viable small and medium-sized enterprises (SMEs) and livelihood development. 

 

(i) Sustainable Economic Growth

In spite of unexpected factors such as an increasingly challenging global environment, COVID-19, and natural disasters, China’s economy has risen at an average annual rate of 4 percent during the last three years, much faster than the world average of roughly 2 percent, and has thus maintained its top spot among the major economies of the world. It is still promising and vibrant, and continues to contribute significantly to the expansion of the global economy. However, five crises, namely, employment, exports, private investment, real estate, and debt defaults have affected China’s economy during the pandemic, leading it into a downward spiral. Hence, the most consequential goal for the year of 2023 is the GDP growth. The growth targets are flexible, though. It ought to be between 5% and 6%. This year, the Chinese economy is expected to fully resume normal operations. All spheres of life are entering a time of recovery as transportation, tourism, entertainment, catering, and other industries continue to revive, and this year’s economic growth is predicted to be stronger than forecasted. However, even while China is progressively recovering, the government will find it difficult to accomplish the goal of 5-percent growth. One of the reasons could be the deteriorating global economic environment, which may have a bad impact on exports and export-related manufacturing. Additionally, the declining external market will be a challenge. The triple pressure of decreasing expectations, supply shock, and demand contraction is still rather significant, and the foundations for the nation’s economic recovery are still insufficient. Nonetheless, setting reasonably steady economic growth targets and speeding up the construction of a new dual circulation development model are thus important to boost consumption, stabilize growth, and calm expectations. Moreover, achieving effective quality improvement and fair quantity increase should be given high priority this year. 

The Two Sessions members have presented a number of recommendations for the nation’s economic recovery, including strengthening China’s financial system reforms and directing financial institutions to better support small businesses, innovation, and development. In accordance with international norms, the Chinese government also intends to continue creating a business environment based on markets and the rule of law that levels the playing field for private businesses and supports entrepreneurship.

On top of it, China’s Belt and Road Initiative (BRI) turns 10 this year. This initiative has already sparked about $1 trillion in investment over the past 10 years, developed more than 3,000 cooperative projects, produced 420,000 local jobs, and assisted in lifting roughly 40 million people out of poverty. This year, the third Belt and Road Forum for International Cooperation will take place in China. China intends to take this opportunity to collaborate with all pertinent stakeholders for a more successful Belt and Road collaboration. The country continues to have high resilience, enormous potential, and remarkable vitality, all of which are excellent economic fundamentals.

Last but not least, the 45^th anniversary of China’s reform and opening-up is being celebrated this year. China promises to widen its doors to the outside world and welcome foreign investors in future.

 

(ii) Viable SMEs

In China, small and medium-sized enterprises (SMEs) account for the majority of output, urban employment and tax revenues but are hit hardest by the pandemic since the year 2019. They account for about 80% of total employment and 70% of corporate revenue in China, making them a critical driver of any economic recovery even though the country’s most well-known private-sector companies are tech giants like Alibaba and Tencent. The government’s current challenge is to restore confidence in the private sector, which is necessary to increase household spending and private investment, and SMEs can play a major role in the process. In fact, the Chinese government has been implementing policies on national and regional level to support SMEs for years. Neutrality in policy making and major programs like “Made in China 2025” ensure that all businesses receive the same treatment regardless of private or state-owned ones, and, to promote innovation and entrepreneurship, China’s domestic policies and supporting agendas are largely in favor of SMEs. There is a need to make sure that innovating SMEs may also receive funding from specialized funds. 

While China’s economy is predicted to grow more broadly in 2023, private businesses will have more room to operate and the private sector will embrace new development prospects. China has to strengthen the foundation for the growth of the digital economy and accelerate the integration of industry and the digital economy. 

 

(iii) Improved Livelihood

In regulating economic losses and protecting people’s livelihoods, China has already done well. The Chinese people’s basic livelihoods have been guaranteed during the pandemic too. Though, young people in China are still concerned about jobs as it is considered that a stable employment is critical to people’s livelihood. The main goals of the Two Sessions this year are to stabilize growth, create jobs as employment-first strategy, and support private firms. Together with other measures, support will be increased especially in terms of employment services and technical training. Fortunately, the number of college graduates joining the workforce this year has reached a record high of 11.58 million, which is positive since young people can rejuvenate and revitalize the society.

For education, the Chinese government has maintained annual budgetary spending at more than 4% of its GDP and kept a considerable increase in per-student spending. The nine-year compulsory school retention rate increased from 93.8 to 95.5 percent. For rural and non-working urban inhabitants, annual government subsidies for basic medical insurance increased from 450 yuan to 610 yuan. The basic medical insurance program approved the reimbursement of a bigger number of critically needed medications. China has also consistently increased the minimum basic old-age benefits for rural and non-working urban people as well as basic pension payments for retirees. There is still a long way to go to deliver a well-to-do life to old Chinese people.

This year’s Two Sessions meetings’ top priority is to reach an understanding on creating plans how to address the current state of recession and economic slump following the pandemic, which adversely affected the public’s income level. A new development model in the health sector is also being created, with an emphasis on the encouragement of high-quality advancement and improved coordination of the prevention and control of upcoming epidemics. The Two Sessions meeting has shaken up strong confidence, steady growth, and opening of new chapters as keywords for 2023 after three years of enduring the difficult test of COVID-19. The ongoing economic recovery in China will be a strong ally in stabilizing the labor market. The Chinese economy will continue to improve and offer dependable support in stabilizing employment as long as epidemic prevention policies are optimized, adjusted, and implemented further along with several other measures. Moreover, the BRI has facilitated economic growth and already improved people’s livelihood along the routes. 

From the above analysis, it can be concluded that 2023 is the year of the new journey and the Two Sessions reflected the nation’s people-centric democracy. Its economy will continue to grow and the quality of public life will improve in this new journey. The Sessions have provided great confidence and energy to the whole nation to keep marching forward. A Harvard-vetted study shows that over 95% of the Chinese people are satisfied with their government’s performance. This seems to fit very well with China’s whole process democracy as Xi Jinping said that “the Chinese style modernization does not follow the beaten track of colonial plunder or the crooked path of hegemony, rather the correct path of peaceful development in the world.” The Chinese government has made a commitment to the idea that no one should be left behind, whether this means overcoming poverty, creating an all-around community that is moderately successful, or continuously advancing common prosperity.

However, the government needs to act according to people’s aspirations, since most ordinary people do not pay attention to GDP growth or figures, but they are concerned about their daily livelihood situations such as housing, employment, income, education, medical services and environment. In order to raise happiness levels and promote a sense of achievement and security among the public, the government must make significant investments in areas that have an impact on people’s quality of life, such as education, employment, health care, and the social security system. In short, it needs to put people’s interests above all else. Last but not least, as China develops into a dynamic agricultural country, the central government should aim to support new businesses and new business models in rural areas to stimulate agricultural and rural growth.

 

 

 

 

 

 

 

This article is from the March issue of TI Observer (TIO), which is a monthly publication devoted to bringing China and the rest of the world closer together by facilitating mutual understanding and promoting exchanges of views. If you are interested in knowing more about the September issue, please click here:

http://www.taiheinstitute.org/Content/2023/03-31/2124231553.html

 

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