Scant mention of Belt & Road Initiative and abandoning of annual GDP target indicates managing internal affairs dominates leaders’ attention. Decisions taken during the National People’s Congress meeting suggest the Communist Party is putting emphasis on providing jobs and social stability.
The notion that China will emerge stronger from the crisis and seek to fill the void in global leadership left by a retreating United States has become conventional wisdom among Western commentators. Judging by the long-delayed meeting this year of the National People’s Congress, though, Chinese leadership is more focused on managing its own economic woes than leading the world.
Beijing holds its conservative maxim that no matter how complicated the international situation has become, China must prioritise the management of its own affairs. This resonates loud and clear at this time of crisis.
The new national security law in Hong Kong caused a blast of explosive responses from the West. Yet, China’s critical domestic priority remains to revive a struggling economy amid mounting unemployment. Soft power, pandemic diplomacy and the ambitious Belt and Road Initiative were not the focus of the meetings.
Instead, Chinese leadership presented a grim assessment of the domestic and international economic landscape, as foreshadowed in previous Politburo meetings. It also abandoned the annual GDP target, which has not occurred since it first announced the number.
A staggering GDP target alone is no longer seen as a panacea to surmount all challenges faced by China in a post-Covid-19 world. Instead, stabilising soaring unemployment to create an extra 9 million new jobs, eradicating absolute poverty and increasing cash flow to smaller companies trumped everything else.
Without proper jobs, ordinary Chinese could potentially turn into a hugely disruptive force to challenge societal stability, as has happened in other parts of the world. Facing a collapse of global demand and a transitioning economy less dependent on exports, can the Communist Party guarantee everyone a salary? Beijing has begun to encourage export-led manufacturers to focus on selling to a domestic market, but this transition will take time.
The party has always been a master of storytelling to its own population and often presents its story with a sprinkle of populism.
The populism in President Xi Jinping’s plan is driven by his vow to eradicate absolute poverty by the end of 2020. In a precarious time like this, it is essential for Xi and his team to prevent a perception of failure in managing the economy from becoming widespread among anxious ordinary Chinese.
Such an approach is backed by a consensus within the party, to give the impression the government’s key policy agenda is swiftly and triumphantly moving forward.
Ironically, modern Chinese society is shaped by two Germans at opposite ends of the political spectrum, from Karl Marx’s idea of social equality to Karl Lagerfeld, worshipped by the super-rich for his extravagant taste.
Beijing recognises the acute anxieties from the grass roots of society as the country appears to have gone from being one of the world’s most equal societies to one of the world’s most unequal. This will get worse because of the pandemic.
At the “Two Sessions” meetings, Beijing proposed new public-private partnerships to deregulate certain sectors and increase borrowing available to smaller enterprises. Such steps represent a welcome improvement but are unlikely to raise sufficient revenue or appeal strongly enough to US President Donald Trump to decisively alter the course of the Sino-US confrontation. Relations between Beijing and Washington are, meanwhile, going from bad to worse.
Behind an exuberant chorus of pandemic diplomacy performed by senior Chinese diplomats, there has been a sombre tone on international challenges posed by the pandemic inside the power corridors of Beijing.
The gigantic Belt & Road Initiative was rarely referred to in policy announcements and neither was fresh state capital raised for the plan. It signals a scaling back to serve China’s age-old foreign affairs priority, creating a stable external environment for domestic economic development and a return to a self-serving periphery diplomacy with a focus on its immediate neighbours.
Beijing needs to choose its priorities, narrow down its objectives and focus on delivering existing projects. Along with slimming its priorities, Beijing must improve the quality of belt and road projects by working with other stakeholders.
Since joining the World Trade Organisation, China has created jobs and wealth while the rest of the world has enjoyed a wider choice of products and services at lower prices. All good things must come to an end, though.
China is no longer seen as a benign force, and neither does it wish to bail out the world through a massive stimulus. Challenges to China’s economic model are increasing, as witnessed by the ongoing tussle between the world’s two largest economies.
What sets these NPC meetings apart is that it is a signpost, for the nation and the world, to the direction of a self-reliant China in a post-pandemic world. As the centenary of the Communist Party approaches, it must tell a convincing story that its policies would work for everyone inside China.
That story is not about a victorious conclusion in fighting Covid-19 but rather a continuation of the party to legitimise its own rule by providing jobs and social stability. This is much easier said than done.