Connect with us

East Asia

China’s great geostrategy for trade and defense

Giancarlo Elia Valori

Published

on

The primary policy line of the People’s Republic of China, above all at sea level, is to defend its strategic and military interests, but anyway without undermining the trade routes and economic relations between China and its neighbouring countries.

 Just think about the Spratly issue, but also about the Chinese position on the ownership and nationality of the Senkaku Islands, as well as about the pressure made on China by India in 2017 to block the road that China had planned and designed on the border with Bhutan.

 From this viewpoint, China’s tensions in its neighbouring countries have immediately affected Japan, the Philippines, Malaysia and Vietnam.

 We should also recall, however, the naval confrontation with the United States in May 2009, especially with the USNS Impeccable and Victorious, for the right to operate in the 200 nautical miles off the Chinese Special Economic Zones.

 The United States does not like at all China’s protection of its regional seas, but it will be hard to change China’s mechanism of full protection of its coasts, which partly inhibits the use of old and traditional checkpoints, from Malacca to the Paracel and Ryuku Islands – all areas in which the United States could impose a blockade on the  trade and military flows of China’s vessels.

 This is still the first goal of China’s regional naval security.

 This is one of the primary strategic features of the Belt and Road Initiative, i.e. to get out of the Eastern maritime region and, hence, credibly offset the inevitable imbalance of the Chinese strategic formula on its regional seas with a significant geo-economic presence on Central Asia’s Heartland.

 As well as to provide China with a possibility of military (but also geo-economic) countermove capable of blocking the opponent on the sea or, alone, on its land borders.

 Therefore the aim pursued by China is its full security and absolute freedom of manoeuvre, within the “first circle” of peripheral islands, but with the possibility of projecting a significant interdiction power beyond this limit.

 One of the essential strategic meanings of President Xi Jinping’s Belt and Road Initiative is that, at geo-financial and economic levels, the Chinese leaders are well aware that the global financial crises – the past ones, but also those looming large – make the Chinese economy too vulnerable to global flows.

  This is even more severe if you have planned a neo-mercantilist and export-oriented economic development, as the Chinese leaders have done since Deng Xiaoping’s Four Modernizations.

 At that time there was no other alternative option.

 We also need to consider the tensions in Tibet and Xinjiang, which have also a geo-economic significance.

 It should be recalled that in 2000 the Chinese government launched a “Great Development Program for Western Regions” to finally establish a close connection between the land areas of Xinjiang and the Tibet region – which is essential for China’s nuclear defence and intelligence -and the coastal areas’ economic development.

This is also a very useful logical pathway to understand the Belt and Road Initiative well.

 Also at military level, which – in the Chinese logic – is closely linked to political decision-making, so far all the 2008 and 2009 “White Papers” of the Chinese Armed Forces have always emphasized the rule of the “three functions and a role”.

 It is a rational and operational criterion, which envisages that the Armed Forces should: a) provide the strength to enhance the Party’s leading role, which has always been  the first aim of the People’s Liberation Army (PLA); b) provide support to take advantage of this period of great strategic opportunities for China; c) also provide support for the defence of China’s national interests; and, finally, d) play an important role in maintaining world peace and promoting global economic development.

 These are not empty words. These are programs.

 Reading between the lines, it is said that – beyond the regional seas and networks outside its borders – China will operate in such a way as not to create definitive tensions with its competitors or allies.

 Therefore what we need to know is that currently the CPC has the urgent need to define a stable economic development for China.

 Thirty years ago the CPC leaders argued – and history has proved them right – that the war between the superpowers would never occur, in line with Mao Zedong’s thinking, whereby imperialism “was a paper tiger”.

 A regional, Soviet, Euro-American and partly Middle East paper tiger, in which no one had any interest in firing the first shot.

 At the time, however, China was already thinking about  Asia, Africa, the “Third World” devoid of “capitalists” or Soviet “revisionists”, left as breeding ground for a new growing great power, which had not been ruined by the crazy Cold War, namely China.

 Now – and this is also implicit in the Belt and Road Initiative – the current Chinese leaders obviously think that additional 30 or 40 years of peace and development are needed to enable China to really become a stable and great power.

 Hence in terms of current strategic doctrine, so far China has adapted to fight what the Chinese strategists call “a war and a half”. This means that it can and must successfully wage a major war on its own borders, in addition to effectively resisting attacks carried out around other Chinese borders.

 We also need to consider the stable Indian garrison of 60,000soldiers in Southern Tibet, in addition to the very recent Quad 2.0 alliance between the United States, India, Japan and Australia, established precisely to counter the Belt and Road Initiative.

  In this case, we have the whole range of potentialities and contrasts facing the Belt and Road Initiative.

 Obviously it should also be recalled that at least 22% of Japan’s and Australia’s foreign trade currently depends on China.  Hence it is very unlikely that regional and military tension will turn into a real clash.

 In its future strategic planning, however, China is preparing to resist an Indian land invasion from the South-East and to simultaneously lead a victorious regional naval confrontation, especially in Taiwan’s peripheral area or in the South China Sea.

Certainly present-day China is simultaneously carrying out the Belt and Road Initiative (BRI) and the Regional Comprehensive Economic Partnership (RCEP), with the ten ASEAN countries and the six ones with which ASEAN has further free trade treaties, as well as with the China-ASEAN Free Trade Area. The United States, however, has already created its anti-BRI commercial and economic network with the US-Mexico-Canada Trade Agreement (USMCA), and then with the probable reformulation of a  proposal from the old Trans-Pacific Partnership (TTP) or with the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

 Hence, while the United States is rebuilding its geo-economic centre of gravity in Asia – that it considers to be of primary military and commercial interest – obviously China has turned to Africa, where currently the United States is not particularly engaged.

 A Zen game of void and full, where everyone represents both characteristics.

 At political and technological levels, the United States is causing severe trouble to China, particularly with the recent creation of a special agency called Review of Controls for Certain Emergent Technologies, an office for “dual use” control regarding biotechnologies, Artificial Intelligence, advanced navigation and positioning systems, data analysis and above all big data, robotics and biotechnology.

 This is, in fact, the broader scene of the clash on Huawei and 5G which, as we can imagine, is much more important than the simple organization of an evolved Internet network.

 For example, in the 2018 US Cyber Strategy it is argued that the USA must “win two cyber wars simultaneously”, which are clearly wars against the Russian Federation and, above all, against China.

 Hence, should the United States led by President Trump fail to fully win their current trade war with China, it could use the cyber leverage to redress the global balance of power, with a clear support action taken by the other NATO countries – an action which is necessary from the political and military viewpoints.

 One will be used in the absence of the other  – the greater the Chinese commercial presence in the leading sectors, the greater the tendency and likelihood of a cyber war against China.

 And the other way round.

 There is more, however, in relation to the clash between the United States and China and, hence, in relation to the necessary and logical shift of China to a closer bond with the EU, its individual Member States and the rest of the world.

 For example, The National Defense Authorization Act of 2019, published on August 13, 2018, focuses on the operations of the Chinese ZTE corporation, while the US government is prohibited from purchasing all Huawei’s materials –  as is now well-known – but also the products of Dahua, which deals with video surveillance, as well as the products of Hytera, which manufactures advanced radio systems and, finally, of Hikvision, the current largest producer of video surveillance systems in the world.

 As has long been happening, in all the US government official documents China is also seen as a dangerous competitor of almost equal rank and power.

 Is it a realistic project? The answer is both yes and no. At technological level, probably in the future. At financial and commercial levels, not yet.

Nevertheless the matter here is tuer dans l’oeuf, namely to nip in the bud.

 It should also be recalled that, again in August 2018, US President Trump announced 25% additional tariffs and duties on 50 billion US imports/year from China and later 10% additional tariffs and duties on other 200 billion Chinese goods exported to the United States. Last September further duties on Chinese exports to the USA were announced to the tune of additional 267 billion dollars.

 Last autumn, at the UN General Assembly, the United States made public the “alleged” China’s influence operations against the Republican Party (only?) in the midterm elections while, at the same time, Terry Branstad – the  US ambassador to China since 2017, a “friend of President Xi” and former Governor of Iowa twice –  published an article condemning China’s “influence operations” in Iowa.

 The United States has also put great pressure on El Salvador to avoid it breaking with Taiwan. Later, however, the United States exerted further very strong pressures on the IMF, with a view to stopping funds for Pakistan that would partly be used to repay old Chinese loans to the country.

 Also President Trump’s move to withdraw from the INF Treaty – which apparently concerns, above all, the Russian Federation – anyway puts also China under military pressure.

 Nevertheless, there is the stick and also the carrot for the future US friends in Asia: last August, in fact, US Secretary of State Mike Pompeo proposed a package of financial aid for Asia to the tune of 300 million dollars, to which other 133 million dollars would be added, albeit only for specific support to private companies operating in the region.

 The BUILD Act has created a new US government agency, namely the U.S. International Development Finance Corporation, with as many as 60 billion dollars of US funds  already available abroad, above all to Asia – a very evident response to the Belt and Road Initiative.

 Hence what will the United States do in the future, considering that the bilateral clash with China is now seen as structural?

 Surely, the battle over duties will continue and it is now possible that, in only two other moves, all Chinese imports to the USA will be heavily and selectively taxed.

 In any case, the United States will try to hit the companies that are most active in the Chinese project known as Made in China 2025.

 The current Chinese leaders’ project is modelled on the German one, known as Industry 4.0, and is already focused on the general technological upgrade of Chinese public and private companies, with the predetermined increase of components and spare parts manufactured nationally from 40% in 2020 to 70% in 2025.

 There is also the construction of centres for productive innovation – that is already at an advanced stage – which will be 15 in 2020 and 40 in 2025. There will also be a change and a significant strengthening of internal intellectual property rights.

Innovation will be mainly focused on: 1) a new information technology; 2) robotics and the automated production of consumer goods and capital equipment; 3) aerospace and aeronautics; 4) hi-tech shipping; 5) railways; 6) vehicles with new energy and motion systems; 7) energy; 8) agricultural technologies; 9) new materials; 10) biopharma and advanced biomedical technologies.

 In the official Chinese documents, there is no mention of “autonomous innovation “in all these sectors – as was the case in previous projects as from 2006 – and it is not here just a matter of innovation, but of entire production processes.

 Autonomous innovation is internal activity and here the Chinese government makes us understand that there is a global research and experimentation activity open to collaborations with the EU, Japan and Korea.

 Hence, where possible, the United States will hit exactly in these sectors, by avoiding – to any possible  extent – any kind of technology transfer or, in any case, any transfer ofad hoc scientific information.

 Furthermore, in the future, the United States will have the opportunity of convincing both Japan and the EU to implement practices against China featuring sanctions and open trade restriction, not only at technological level. Certainly Italy will harshly experience this kind of  operations, whether they are known or not to our intelligence Services.

 How will China respond to these practices? Probably with a hard and close dialogue, although with some significant concessions to the United States.

 Furthermore, in the framework of China’s technological upgrade program, its leaders will have the chance to increase the non-State sphere in China’s production system. Finally China will look for new foreign markets. This is the first CPC’s response.

 Most likely, the Chinese leaders will also avoid the additional burden of public debt on companies and, above all, they will largely limit the growth of real estate speculation.

 In all likelihood, China will spend a lot of money on productive investment – as already envisaged in its 2025 Plan – and will look for new external markets, above all (but not only) with the Belt and Road Initiative.

 It should be recalled that currently the BRI countries account for 27.3% of the total Chinese foreign trade with the United States alone.

 Moreover, China will soon develop excellent regional free trade agreements, such as with the Regional Comprehensive Economic Partnership and the enlarged ASEAN.

 Furthermore, nothing forbids to reach a great agreement with India.

  In the future, however, China’s trade interest will be, above all, in Japan and South Korea.

 Meanwhile, the United States can carefully assess the  military and commercial cost of an all-out economic war against China, which will certainly not be irrelevant.

 This is context in which we can see the weak and tired interests of the European Union, which does not know its destiny and hence will not have one. The same applies to Italy which could use the potential of the Road and Belt Initiative, but will not be in a position to do so and, above all,  will have no way out of the US strategic, military and financial pressure.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

Continue Reading
Comments

East Asia

Predicting the course of US-China relations in the post Covid-19 era

Ayush Banerjee

Published

on

Authors: Ayush Banerjee and Dhritiman Banerjee*

The coronavirus pandemic is a natural threat to the geopolitical order. And it is needless to state that this majorly affects the currently international paradigm in a manner that the world has not seen before. Although there have been a few instances where pandemics have shaken the mortality rates, no pandemic has spread this amount of sheer panic among the public at large. This is largely due to the growing interconnectedness and the advent of the cyberspace. Just as the internet has influenced the lives of the most privileged public, data has been influential in academics and politics alike. However, this argument has its own set of problems that continue to affect public-politic relations in ways more than one.

In the same regard, one of the most strained and keenly debated relations in international politics is that between the United States of America and the People’s Republic of China. In the context of the virus itself, the virus originated in Wuhan, a province in China while the most number of fatalities have resulted in the United States of America. This idea fuelled with the new world media at the public level created an atmosphere of tension on such platforms. On Twitter notably, there were several instances of a tweet naming Covid-19 as ‘Chinese Virus’ spread like wildfire. This sparked a major controversy even at the diplomatic level. Even Donald Trump momentarily subscribed to the idea and deliberately worded his speech to use the phrase ‘Chinese/China virus’ to refer to Covid-19 at least 20 times between March 16th and March 30th 2020. The US Secretary of State- Mike Pompeo went on to accuse China of its lack of transparency, even scrapping a joint G7 statement after its members refused to refer to the virus as the ‘Wuhan virus.’ China has remained apologetic ever since. Hence, it can be rightly inferred that the relationship shared between China and USA have strained ever since the Covid-19 outbreak.

However to predict how the outbreak might jeopardise the current paradigm of world politics we must look no further than the Phase One Trade deal signed between the two countries. This deal previously ended an 18-month long trade war between USA and China. Through this deal, China committed to purchasing $200 billion additional foreign goods and services in the sectors of agriculture, energy and manufacturing. However, it is evident that in the post-Covid19 era, it will be rather implausible for China to adhere to the terms of the deal due to reasons more than one. The IMF estimated the reality of an unprecedented economic slowdown in which China is expected to grow at only 1.2% this year. Several reports suggest that investors are planning to pull out their investments from Chinese industries to fit in with the Western bandwagon.

The outbreak turned pandemic coupled with the authoritarian nature of China’s response to the entire situation has had a detrimental effect on their domestic economy creating various tremors in the anticipation of demand for various products and services. For instance, the 12 most Covid-19 affected countries account for over 40% of the Chinese exports. Nations like India and Italy that also make that list of twelve may voluntarily pull out of importing to China as they are set to gain from deferring of investments. These nations are also top suppliers of intermediate goods for the Chinese economy. The Chinese economy is quite dependent on external demand stimuli from the US and most western European states such as the United Kingdom. Therefore, until the point in time the US and EU economies completely recover from this pandemic, Chinese policymakers are bound to hold back domestic stimulus efforts as it will only have little effect if the global economy is in shambles.

The Chinese economy has crippled down considerably due to the ongoing trade war that has led to a disproportionate ratio of debt to the annual Gross Domestic Product. This ratio reached an overwhelming 248.8% by the end of March 2019 and it has only increased ever since. China has also been forced to restructure the debts of the Belt and Road initiative (erstwhile OBOR). This restructuring meant that the capital owed to China as loans by the contributing states have been readjusted to affect the projected collection considerably. As Covid-19 nearly decimates the economy of most developing nations, it is becoming increasingly difficult for these states to pay their loan back to China within the stipulated timeframes. Thus adding to the stress on the Chinese economy at large.

There has already begun a region-specific boycott of Chinese goods and industries, especially in conservative parts of USA, among the southern districts. Instances of racial abuse against ethnic Chinese communities have been on an unfortunate rise. These are all deterministic factors of public consciousness, if not, public opinion for the future that lies ahead of us. This reaction has already seen international spillovers and investors have become more anxious about investing in Chinese companies.

According to Deepanshu Mohan, the world may experience radical shifts in the global political economy post-Covid19 based on two factors namely, the relative degree of economic recovery in the affected nations and the existing domestic political scenarios in such nations. He further states that in the post-Covid19 era, protectionist trade policies are likely to increase in the developed nations who in the name of ‘supply security’ may disentangle trade relations with China which will inversely affect the current geopolitical world order. Donald Trump could also make the pandemic a focal point in the 2020 election campaign and therefore aim to capitalise on the anti-China fervour in the US and thus strain relations even further. There lies evidence for this as well. Trump recently presented his anguish towards China being categorised as a ‘developing’ state under the World Trade Organisation list and due to the low contributions of China to the World Health Organisation. Although this may seemingly appear appropriate accusations, this is far from the whole truth. The USA, themselves have cut major proportions of its funding capacity towards the United Nations especially concerning peacekeeping and security operations.

Minxin Pei, on the other hand, stated that the Covid-19 outbreak has led the average American to view the Chinese political system with chronic scepticism as Americans blamed the repressive Chinese political system for the pandemic with the Harris poll indicating widespread American dissatisfaction with the alleged Chinese cover-up of the virus. This poll also showed overwhelming support for US punitive measures on China and the removal of US investments and businesses from China. These developments could lock the two countries into a cycle of escalation that could trigger another potential international diplomatic conflict leading to numerous security issues and economic degradation. USA and China remain the two largest economies in the world. Hence, it can be inferred that this fallout of diplomatic and economic ties between the two states might amount to significant damage in the entire global political order and the globalised system of economies and markets. In the US itself, the number of jobs created since the recession in 2008 has been washed away in two weeks.

The trade war between the two economic giants had already shaken the world before the outbreak. And the prevalent fault lines will only widen in the post-Covid19 era just as a global economic slowdown is expected. Thus, it is imperative for the world economy that this US-China relation remains amicable and stable. However, the available narratives indicate a significant detour from the ideal stability that USA and China should normatively maintain to protect the global economy from crumbling down like biscuits. The USA has resorted to legislations that are actively anti-China in terms of financial relations and international trade while China has strengthened its protectionist response system both politically and economically during this outbreak.

The Covid-19 outbreak has not acted as an impediment to Chinese aggression in the South China Sea region either. China has recently renamed 44 features in the disputed region, a decision that is considered illegal under international law. This has been time and again criticised by the US Secretary of State Mike Pompeo. With increasing US-China missile competition a reality in the region post the abrogation of the INF treaty, the post-Covid19 era will likely see more prominent conflicts in the South and the East China Sea regions which is a strategically important waterway for both the countries alongside other nations such as Japan, Vietnam, Philippines and India.

*Dhritiman Banerjee is an undergraduate student at the Department of International Relations at Jadavpur University, Kolkata, India. He has recently published for the Millenniumpost, a Kolkata based newspaper as well as contributed to publications like the Geopolitics and South Asia Monitor. His interests lie in International Relations in general and Strategic Studies in particular.

Continue Reading

East Asia

Political unrest in Hong Kong and Global Pandemic

Published

on

Things started from a murder of a girl in Taiwan ending up into an unseen scenario in Hong Kong. Rising tensions in the region of China and Hong Kong, situation is getting worse. First of all the episode of extradition bill and now becoming the series of different surprises, the advent of National Security Bill is not acceptable among the Hong Kong citizens. According to the 1984 Sino-British Joint Declaration, Hong Kong is ought to be the autonomous and free liberal region along china being constituted as a “one country, two systems.” As per this treaty, China is violating International law: which is a direct threat to its soft policy and international image.

 Secondly, the role of United States in Hong Kong is mainly concerned about the large number of U.S. Nationals working there especially at naval ports and their security. While on the national level the sustainability of democratic values and freedom in Hong Kong to whom these acts of China’s Communist party are challenging. United States being the global hegemon owns the responsibility to protect and keep the check on practice of international laws and its violation in any region of the world. Although the whole global community is concerned about the present situation of Hong Kong and its upcoming outcomes. States sign treaties and agreements on the basis of one’s predetermined political and social culture and works accordingly, so following the current scenario the Protest in Hong Kong is going to be game changing event. If the bill passed, Hong Kong will be a Chinese administered territory like another small city of Chinese Communist party but on the other hand if failed to pass this bill Hong Kong can have a victory to win the democracy and write the fate of their state in a new way.

Furthermore, the wave of global pandemic in the form of COVID 19 has already questioned the worth of human security. Millions of people are dying due to this disease originated from Wuhan, China. World is already questioning the Chinese role. Above all the differences, we all are human beings living in the world of chaos. Divisions led towards the more divisions. There is a dire need to fight collectively to this coronavirus. Being humans, we need to apply the only global value that is being human fellow. Social distancing is the new normal now but Hong Kong’s political situation is getting more anti distance campaign due to the political unrest. China needs to slow down the process. Human security needs to be the priority. Although to raise the voice of Hong Kong’s people social media can be a better platform. Let’s shake hands for peace rather than division.

Continue Reading

East Asia

All eyes on China’s post-lockdown Twin Sessions

Published

on

Even though parts of the country are still battling a minor rebound of Covid-19 cases, the general message is clear: China has emerged from the abysmal months of lockdown and is ready to resume business. This was made clear to the entire nation on 29 April with the announcement of new dates for the “Twin Sessions” meeting, the country’s most significant annual political and legislative affair, involving the National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC).

Starting from 21 May, thousands of legislators and political advisors will gather in Beijing’s Hall of the People to discuss and vote on pressing issues facing the country. The gathering, which should have happened in early March, was postponed for more than two months this year due to Covid-19. Now its restart, reportedly cut short from a two-week event to just one week, is widely considered a reflection of the top leadership’s confidence that a level of normalcy can be restored in Chinese society.

Despite the reassuring symbolic meaning of the Twin Sessions, the social and economic landscape is bleak as China begins its slow recovery from Covid-19. The country’s economy shrank 6.8% in the first quarter of 2020, and a full recovery is far from a certainty given the ongoing nature of the global pandemic. The unemployment rate has risen in the same period. The world will be watching how the Chinese government addresses these challenges through the outcomes of the annual conference. Measures will not just shape the trajectory of the Chinese economy but also global objectives of economic recovery, fighting climate change and achieving long-term sustainability. Here are a few key items to watch for at the Twin Sessions.

Economic growth target

At every year’s Twin Sessions, the Chinese premier will make a formal report to legislators about the government’s work in the past year and, more importantly, lay out key economic and social development targets for the coming year. These targets include rates of GDP growth, unemployment, Consumer Price Index (CPI) change reflecting inflation, and poverty reduction. By the end of the meeting, legislators will vote to adopt those targets to make them binding for the executive branch. That is the order of business in a normal year.

In a year of pandemic, the severe disruption to economic and political processes have made setting the 2020 targets a contentious business. Now all eyes are on Premier Li Keqiang’s Report on the Work of the Government as the country enters the last week of May without a clear idea how the central government plans to set the speed for the economic engine this year.

This is a year of paramount importance for the Party. By the end of 2020, the country’s GDP is supposed to achieve a doubling from 2010 levels, a key political commitment made by the Party to Chinese society. The growth rate needs to hit about 5.5% this year to secure the objective. But Covid-19 has knocked the economy off track by a wide margin.

Prominent Chinese economists have weighed in. Justin Lin, a top economic advisor and former Chief Economist at the World Bank, recommended a moderate target of 3% to avoid maxing out China’s monetary and fiscal policy tools. As the economy shrank in the first quarter and is only mildly recovering in the second, China needs to achieve a 15% growth rate in the second half of 2020 to maintain the 2020 “doubling” goal. Lin argues that even if China is able to stimulate economic expansion to that level, it should opt for a slightly lower target to save some ammunition for next year. “It is totally acceptable to defer the (doubling) goal to next year,” he told the audience of a Peking University webinar on 15 May.

On the other hand, Ma Jun, chairman of China Green Finance Committee and a member of the People’s Bank of China’s monetary policy committee, has advocated for an outright abandonment of any economic growth target for 2020, citing concerns that chasing unrealistic targets will lead to massive stimulus measures in debt-driven infrastructure building that is often short-sighted and ill-considered.

A 13 May article by He Lifeng, the head of the National Development and Reform Commission (NDRC), China’s top economic policymaking body, indicates that the government may still choose to adhere to its original economic goal. “We should make sure we complete the task of building a moderately prosperous society,” he wrote. Doubling GDP by 2020 is a key component of that vision.

Stimulus package

The growth rate target is closely linked with how China determines the size of its economic stimulus package. According to the 2015 Budget Law, key components of the fiscal toolbox, including quotas for central government and local government bond issuance, must be approved by the National People’s Congress.

Liu Yuanchun, vice president of Renmin University, told Caijing magazine that to create 1% GDP growth, fiscal spending should reach 1.2-1.4 trillion yuan (US$170-200 billion).

By the end of April, the Ministry of Finance had front-loaded the local government bond issuance quota to the tune of 2.29 trillion yuan (US$320 billion), and before total annual quotas could be approved at the Twin Sessions. The majority of local government special bonds go into infrastructure projects such as railway construction and public transportation, whose carbon footprints will have implications for global efforts to address climate change.

Green legislation and planning

Covid-19 has triggered a national conversation about the relationship between humans and nature, as scientists have linked the novel coronavirus to human contact with wild animals. The conversation was quickly followed by legislative actions. On 24 February, the NPC Standing Committee passed a decision banning consumption of wild animals for food, leaving only limited exemptions for certain species commonly bred in captivity. The national legislature is expected to revamp the Wildlife Protection Law following the decision. According to a legislative plan released by the NPC Standing Committee, the law revision process will likely culminate in 2021. Therefore, this year’s Twin Sessions probably won’t see definitive progress on the Wildlife Protection law, even though legislators may use the platform to submit proposals and recommendations.

Meanwhile, deliberations on the 14th Five Year Plan (2021-2025) will start in earnest this year, ready for its delivery to the next Twin Sessions in 2021 for final approval. According to schedules released by national authorities, draft versions of sectoral 14th Five Year Plans (such as for renewable energy) should be available for comment in late 2020.  

In a critical year for China’s political and economic calendar, the pandemic has created unprecedented disruption. The coming week will demonstrate how China plans to pull itself back on track, with outcomes that will have far-reaching global consequences.

From our partner chinadialogue

Continue Reading

Publications

Latest

Tech News2 hours ago

Strengthen Inclusion and Empower the World’s Invisible Billion

The World Bank announced today the launch of the second Mission Billion Challenge for innovative solutions to increase inclusion and...

EU Politics4 hours ago

Enabling Europe to lead the green and digital transition

The Commission released today its latest report on the EU’s Science, Research and Innovation Performance, through which it analyses how...

Newsdesk6 hours ago

World Bank: Belarus’ Economy Can Face a Severe Shock

As a small, open, commodity-exporting economy, Belarus is heavily exposed to shocks caused by deep contractions in its main trading...

Americas8 hours ago

What do Donald Trump and ultra-conservative Pakistani imams have in common?

Authors: James M. Dorsey and Tehmina Qureshi* US President Donald J. Trump and ultra-conservative Pakistani religious scholars may have more...

Newsdesk10 hours ago

More Unified Approach to Public Procurement Needed to Boost Kazakhstan’s Economic Recovery

Kazakhstan has made significant efforts over the past two decades to bring its public procurement system closer to international standards,...

Diplomacy12 hours ago

Beyond Twiplomacy: Diplomacy and the Digital Fast Forward

The practice of diplomacy in the virtual space is geared towards amplifying foreign policy drives and messages and forms a...

EU Politics13 hours ago

Japan-EU Leaders’ meeting

H.E. Mr. Shinzo Abe, Prime Minister of Japan, H.E. Mr. Charles Michel, President of the European Council, and H.E. Dr....

Trending