The Two Sessions, the main annual gathering of China’s legislature, is always a tightly choreographed event with no risk of unruly debates or any possibility that delegates will reject proposals approved by the Communist Party. The party leadership went a step further in tightening control at this year’s meeting by cancelling the traditional closing press conference by premier Li Qiang.
The decision was regrettable, not least because the annual press conference was a rare chance for Chinese and foreign journalists to question a senior leadership figure on a wide range of topics. It was also a missed opportunity for China’s premier to reassure investors by explaining more fully his government’s strategy.
In a report delivered at the meeting, Li set an ambitious economic growth target for 2024 of around 5 per cent of GDP. The sharp recovery after the end of Covid lockdowns has struggled to retain momentum amid an enduring crisis in the property market, indebted local governments and weak consumer confidence.
Xi Jinping has identified what he calls “new productive forces” as the key to replacing construction and the other traditional motors of China’s economic growth with high quality, high technology production. This means integrating artificial intelligence (AI) into existing industries and investing more in semiconductors, quantum technology and life sciences.
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China has already gained a dominant position in the production of electric vehicles, solar panels and battery cells. And in the absence of measures to stimulate domestic consumption, overcapacity in these industries will make the export market vital to Chinese manufacturers.
This year has seen a rise in exports to other parts of the Global South but the climate for Chinese exporters to the European Union and the United States has become cooler. A trade war would be costly for all sides but more evidence of Beijing’s commitment to boosting domestic demand would ease worries in Brussels and Washington about an impending flood of imports.
