Focused Policy Coverage : China’s Two Sessions 2020
The Two Sessions refer to the annual meetings of the Chinese People’s Political Consultative Conference (CPPCC) – an advisory body of over 2,000 members – and the National People’s Congress (NPC), China’s top legislative body. They are China’s most important annual political meetings, highlighted by the delivery of the Government Work Report by Premier Li Keqiang, which lays out the government’s agenda, key targets and policy priorities for the following year.
The key points below are some highlights from the two sessions being held in Beijing on May 21st -28th, 2020.
- In the Work Report, the government opted not to set a GDP growth target for the year because of the high level of uncertainty caused by COVID-19 and its impact on the global economy. This is the first time the government did not set an annual target since that practice started in 1990. Last year, China had a growth target of 6-6.5 percent, which it ultimately achieved by reaching 6.1 percent growth. Li stated that the government will take strong measures to support employment, but there remains uncertainty over how far they will go to stimulate the economy. It may also be a signal that the government is prepared to accept a low level of growth in 2020.
- A fiscal stimulus package of almost RMB 3.6 trillion (CAD $688 billion) was focused on issuing bonds to support China’s economic recovery following the COVID-19 disruption. These bonds, as a key source for infrastructure funding, will target investments in “new infrastructure” such as 5G networks and new energy vehicles charging stations. Beyond stimulating growth, government planners are hoping the stimulus will help sustain employment levels and, as a result, social stability. The government is seeking to create nine million new urban jobs in 2020.
- “Employment” is listed as the highest priority and was mentioned 62 times in the Work Report. One measure is to finance skills training to stabilize employment. Over 2020 and 2021, more than 35 million vocational skills training opportunities will be provided, and enrollment in vocational colleges will grow by 2 million. This will help more people improve their skills and secure higher-value jobs.
- Various ministries such as the National Development and Reform Commission (NDRC) and Ministry of Finance have addressed in their reports that Xiongan will fully implement the New Area development plan as region tied closely to Beijing’s municipal development and administration. They will accelerate the construction of major projects, promote the reformation of institutional mechanisms, modernize governance systems, and strive to create an innovative development demonstration zone.
- Despite the economic disruption of COVID-19, Li’s work report reiterated the goal of eliminating rural poverty in 2020. The priorities of the report included accelerating the implementation of regional development strategies, including the Beijing-Tianjin-Hebei region, the Yangzi Delta region, and the Sichuan-Chongqing economic circle. Poverty alleviation, rural development, and improving ecological environmental management also rank highly in the priorities the government will focus on for the year ahead.
- China will begin the renovation of 39,000 old urban residential communities, improve public facilities and develop community services. The total investments of the improvement for the old urban residential community can reach 4 trillion yuan (CAD 800 billion). Approximately 7 million households will benefit from the renovation.
- The report reaffirmed China’s commitment to further opening up and pledged to take measures to boost foreign trade and foreign direct investment. The extensions of existing tax policies and foreign trade incentives such as lower compliance costs for imports and exports and support the domestic sale of export products provide essential support to foreign companies. The announcement of the shortening of the negative lists for foreign investments and mention of new pilot free trade zone is also likely to garner a more open investing and operating environment.