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All eyes on China’s post-lockdown Twin Sessions

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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

Ma Tianjie is China Dialogue managing editor in Beijing. Before joining China Dialogue, he was Greenpeace's Program Director for Mainland China where he was a regular commentator on China's environmental challenges contributing to a range of media organisations. He holds a master’s degree in environmental policy from American University, Washington D.C.

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East Asia

Is China on the brink of a food crisis?

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It is not a secret that the current COVID-19 pandemic has been affecting people all around the globe. The virus touched almost all spheres of regular life – i.e. it resulted in temporary or permanent closure of businesses, a rise in the unemployment rate, inability to physically spend time with family and friends. Such drastic changes in times of uncertainty significantly impacted the well-being of the world population. Moreover, Food and Agriculture Organization of the United Nations (FAO) warned about the emerging food shortages worldwide. According to FAO statistics, global food prices have been on the rise for four consequent months, hitting their maximum in September 2020. China – the place where the virus originated – is one of the states that have been seriously affected by the disruptions, including production and distribution of food.

In his speech on August, 11 Chinese leader Xi Jinping did not admit any food shortages. However, he promoted food security through the campaign “operation empty plate,” thereby encouraging people to stop wasting food. It is interesting to note that Mao Zedong introduced a similar food campaign before the 1959 Great Chinese Famine. Meanwhile, there has undoubtedly been a significant increase in food prices in China. Many experts claim that China is on the brink of a food crisis that has been manifested as a result of lockdowns, infected livestock, and poor weather conditions. It is difficult to give any predictions or estimations about the future food situation in China because the country does not share enough of its data with the rest of the world, yet it is possible to answer the question why the state faces food difficulties.

Average food prices increase

The National Bureau of Statistics of China reported that, on average, food prices have increased by 11.2% compared to 2019. The price level of vegetables increased by 6.4% in one month; egg prices soared by 11.3% within the same period. Pork prices grew the most, by 52.6% compared to the last year’s statistics. Why is it important?

Firstly, many workers and their families who faced loss or decrease of income or remittances became food insecure. That, in turn, has had social repercussions for the overall level of crime, health concerns among adults and infants, high death rate, different demographic and economic challenges. Furthermore, international trade will also suffer: due to the lack of labor force Chinese imports in foreign countries will seemingly increase in price.

Secondly, China, along with other countries, was in a period of recession earlier this year. Food insecurity will cause difficulties in coming out of this financial downturn.

The impact of lockdowns on food supply chains

One of the main factors contributing to the declining agricultural productivity and spiking food prices in China is the restrictions on personal mobility and transportation of goods. In January Chinese authorities adopted measures to limit mobility within the country; they imposed “city lockdowns, traffic control, and closed management of villages and communities.” Such restrictions impacted food supply chains. For the production part many workers experienced difficulties getting to work that created a shortage of physical labor. That is why some crops were not picked, others were not even planted. As a result, the supply of agricultural goods decreased. On the other hand, at the beginning of the year, the demand for them also fell as restaurants and bars were closed. Thereby, many crops went to waste, while farmers did not make enough profit to purchase the seeds and fertilizers for the next season. It is a problem because businesses continue to open up, raising the demand and prices on crops. Immobility also impacted the distribution of seeds and fertilizers to the farms that disrupted the plantation season. Furthermore, the distribution of agricultural goods to grocery stores became difficult. Particular inconveniences associated with the restrictions on mobility all added up to the spike of prices on crops.

African Swine fever outbreak

Another factor impacting the emerging food crisis in China is the failure to rebuild last year’s loss of pigs due to the infection. Chinese porcine farms were hit by the African swine fever outbreak that infected and killed a large number of pigs (40% of total Chinese pigs’ population), decreasing the supply but increasing the prices on pork in 2019. According to China’s National Bureau of Statistics, pork prices were 52.6% higher in August this year than the year before, while corn prices – the main porcine fodder – increased by 20% compared to last year. Chinese farmers failed to improve the situation in 2020 due to severe flooding. The increased amount of precipitation caused considerable losses of corn and thus the inability to feed pigs. China began to import crops from abroad – particularly, corn from the US. As the United States Department of Agriculture (USDA) stated, China had been importing 195,000 more tonnes of American corn than the year before.

Shuttered diplomatic relations between China and Western states

Some experts claim that Chinese diplomatic relations with such Western countries as Australia, the US and Canada shattered due to the fire of four ballistic missiles on the Indian border on August, 26. These states are China’s major food exporters. If their diplomatic relations with Beijing worsen, then the trade has a high chance of being negatively affected as well. In other words, Chinese imports of crops have the risk of becoming more expensive, meaning that the prices of pork and other goods might rise even more.

Severe flooding and drought

Finally, worsened weather conditions – some parts of China experienced drought, others were hit by flooding – led to a decrease in crops and a significant increase in food prices. Southern, Central and Eastern China underwent a period of heavy rain and the worst flooding in the last hundred years. Excessively high water levels in major Chinese rivers, including the Yangtze River, resulted in the evacuation of 15 million people in July 2020. Moreover, the flooding destroyed 13 million acres of agricultural land, which is estimated to cost at least $29 billion of economic damage. In the meantime Northern (Xinjiang province) and Southwest (Yunnan province) China have gone through a period of severe drought. In April 2020 nearly 1.5 million people in Yunnan province were caught in an emergency situation: shortages of drinking water, damage of hundreds of hectares of crops and livestock. Consequently, the supply of many agricultural goods and pork decreased, which spiked the prices on these goods.

Chinese long-term prospects toward food security

To conclude, immobility, African swine flu, worsened weather and security conditions led to the growing food shortages and increasing food prices in China. This being said, the Chinese government has been working on that problem. It has taken special measures to ensure sufficience of agricultural goods by investing in various disaster relief funds for different crops, particularly rice and wheat. For example, Chinese authorities allocated 1.4 billion yuan to save the agricultural harvest in Hubei province. Due to the substantial loss of agricultural products, China has also increased its imports. General Administration of Customs reported that China’s grain imports rose by 22.7% in July 2020 compared to the previous year. Meanwhile, the Chinese leader took a gentle approach to solve this problem. He did not announce the issues related to the insufficient number of crops; instead, he adopted a program for encouraging people to be more frugal with their eating habits. The Chinese Academy of Social Sciences followed the same path as it denied anticipation of a food crisis in the short-term perspective, yet warned about possible food shortfalls by 2025 if no agricultural reforms take place. As of now, China is not on the break of a food crisis; however, its shuttered prospects for long-term food sustainability are subject to dangerous repercussions.

From our partner RIAC

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East Asia

China and Mongolia: A Comprehensive and Never-Ending Strategic Partnership

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Mongolia is an exceptional country when it comes to Eurasian geopolitics, linking China with Russia, two great countries in terms of military and economic capabilities, geographical area and population. In June 2016, the China-Mongolia-Russia Economic Corridor (CMREC) was announced in order to consolidate friendly relations and promote economic exchanges for the success of the Belt and Road Initiative. Many reports indicate the great position of Mongolia on the Chinese economic map as a pillar of the modern Chinese initiative. Mongolia is a major economic partner of China, and the Chinese administration aspires to forge permanent relations of cooperation and coordination with Mongolia by virtue of its common geography and strategic location, in order to open up through it to Russia and other Mongolia is a key economic partner of China, and the Chinese administration aspires to forge permanent relations of cooperation and coordination with Mongolia by virtue of its common geography and strategic location, in order to open up through it to Russia and other international partners.

Mongolia is rich in natural resources, for example the mining industry provided up to 30% of GDP and almost 90% of exports, but its economy is not as developed compared to China. Some economic reports indicate the great economic benefit to Mongolia from the China-Mongolia-Russia Economic Corridor. Mongolia is expected to witness unparalleled economic growth in terms of international economic cooperation, which will positively affect the national economy. The Mongolian economy depends heavily on China’s investment; data of the two largest ports in Inner Mongolia Autonomous Region in northern China indicates enormous economic benefits. In the chart below, the continued economic progress achieved in Inner Mongolia is shown. In addition, rail trade increased by 16 percent year-on-year to 11.2 million tons in 2017. In the same year, 570 trips were made on the China-Europe railways passing through Ernhot (a county-level city of the XilinGol League, in Inner Mongolia Autonomous Region, located in the Gobi Desert along the Sino-Mongolian border, across from the Mongolian town of Zamyn-Üüd).

The Belt and Road Initiative aims for mutual profit, cooperation and peaceful communication. China shares an ancient cultural history with Mongolia, long common borders, and economic cooperation that has never stopped. The strategic geographic location of Mongolia makes it a priority for China on the new Silk Road, in addition to the richness of natural resources and livestock that China needs.

The Mongolians are a horse-loving people, a country known for its large number of horses. Mongols without horses are like birds without wings. Despite globalization and the great economic progress in the neighbor (China), as well as the cold weather and difficult geography, the Mongolians did not abandon their traditions and the Mongolian way of life still exists today. In Mongolia there are herders of horses, camels and cattle to benefit from milk, meat, wool, etc. During the pandemic in China, for example, President Battulga set up what is known as “Sheep Diplomacy” where Mongolian President donated 30,000 sheep to China. This initiative indicates the Mongolians’ positive intentions towards the Chinese and the desire to open up more. In this context, I would like to point out that China is a big importer of meat and the Chinese demand for meat is constantly increasing, as shown in the chart below. Here is a great opportunity for Mongolia to increase its exports of meat to the Chinese market.

The reading of Mongolian history indicates that this country has passed through periods of prosperity. Mongolia may be a good example of power and rule, as its borders extended to many countries during the rule of Genghis Khan (1162-1227), the man whom the Mongolians consider their historical leader and has turned into a hero and a national symbol. The Mongolians did not abandon their land despite the cold weather and difficult geography, indicating that they are a deeply rooted people with land. Mongolia, with its vast territories and few people, has turned into a meeting place for Russia and China, and a strategic center for Chinese economic expansion. Therefore, it is impossible for the Chinese administration to abandon the partnership with Mongolia.

The Mongolian economy is heavily dependent on livestock, and the number of pastures has increased significantly since the Soviet era because of the transfer of ownership to the people. However, the government is still not able to provide all services to citizens “the government has failed to promote education and health care and veterinary care in pastoral communities, so there is no longer any incentive to stay in rural areas” said Sarol Khuadu, an official at the Institute for Environmental Research in the Mongolian capital. The policy, which no longer places much emphasis on the countryside, has led to the transfer of large numbers of citizens to the capital and to engage in the world of money and business.

Unfortunately, the Mongolian government is not working seriously to support citizens in remote areas. The conditions of life are not good and the loans granted are high interest, in addition to the weather that adversely affects their businesses. In order to help the poor and rural people, in cooperation with national governments, humanitarian, development and scientific partners, FAO has developed an early warning approach by monitoring risk information systems and turning warnings into proactive actions. International organizations contribute to permanent humanitarian and social assistance in Mongolia.

Mongolia’s strategic policy through the “Mongolia Steppe Road Program 蒙古国“草原之路” is largely in line with the belt and road initiative, which is a road connecting Mongolia, China and Russia. Consequently, Mongolia, a country that mainly depends on the agricultural sector, will be a center for economic communication between China and Russia, and thus will witness a great economic development. The Steppe Road Program aims to boost Mongolia’s economic standing and create an advanced network of infrastructure for communication with China and Russia and build an oil and gas pipeline. In 2014, during his historic visit, Chinese President Xi Jinping raised the level of relations between the two countries to “Comprehensive Strategic Partnership Relations”. Since then, bilateral cooperation has begun to move faster.

China has never abandoned Mongolia; it is a country of advanced strategic location as a bridge between Asia and Europe, in addition to the important agricultural sector in Mongolia which benefits China greatly, not to forget to mention the China-Mongolia-Russia Economic Corridor which has become an important part of the belt and road initiative and a key component of Sino-Russian cooperation.

The relationship between China and Mongolia today is an ideal example of the bilateral relationship between two neighboring countries. Cultural, economic, political and tourism communication is in continuous progress between the Chinese and Mongolians, and the Belt and Road Initiative will push this communication forward. The Chinese aspire to increase free trade areas and economic connectivity through a developed infrastructure network.

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East Asia

Chinese Smart Power

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China is a unique country as it holds a world with Chinese Characteristics. China has rapidly transformed from an underdeveloped country to a key player in international politics.

Mao Zedong stated- “Political Power grows out of the barrel of the gun” reflects a perspective of hard power but Hooghe stated that the Chinese havechanged and do not even like the idea of smart power as it holdsa hard power component in it. President Hu Jintao in the 17th Party Congress favored smart power as he believed that China needs to keep a balance between hard power and soft power to avoid other countries create a coalition against China.

China becomes a difficult country to analyze as it holds a strong Confucian face-saving culture and does not like being criticized butits opponents continue to demonize it.

China understands the scene in international politics and prepares a centralized plan to acquire politicaland economic gains.

In 2005, China tried to gift two pandas to Taiwan which was refused by Taiwan as Taiwan consider this would violate the 1963 Convention on International Trade of Endangered Species of Wild Fauna and Flora.

China had argued that the transfer of Panda would remain an internal transfer within China even when the Taiwanese wanted to acquire two pandas that were appealing to its public theyfailed to acquire them. This could have helped China to gain the legitimacy of its one-China policy without provoking any actor.

The concept of soft power can be far more complex, as it could be a process to gain legal recognition without provoking a hostile population. The American production of Kung Fu Panda helped China in enhancing Panda Diplomacy.

Chinese more effectively controls Hollywood with Chinese investment and as American producers’ make an effort to be screened in Chinese theatre by being accepted in China’s quota for moving screening in Chinese theatre.

Tiktok which now is in a position of being banned in the United States indicates that the government is forced to take measurements due to the rising popularity of Chinese application in the American market.

China’s ban of the National Basketball Association (NBA) for a year also reflects China can force its opponents to maintain self-censorship for the sake of material incentives as mentioned by Ikenberry and Kupchan as a form of ‘external inducement’ leading to ‘policy change’ which would change the standard norm.

China has effectively used education as a medium to socialize with other countries which gets difficult to scrutinize by western powers.

The Former Prime Minister of Kazakhstan Karim Massimov and the President of EthiopiaMalatu Teshome had studied in China and later enhanced the relationship between their countries after they took offices. China’s 2008 defensewhite paper mentions4,000 military personnel from around 130 countries came to study in China for military education. China can combine educational diplomacy as a technique to enhance its military diplomacy and even use it to forge political allies.

Chinese Government operates Confucius Institutelike German use Goethe-Institut and France use Alliance Française to promote their languages.

The western world has worried as universities have started to impose regulations in favor of China after they operate Confucius Institute and even the students are likely to speak in a favorable tone to maintain a good image for the sake of acquiring a scholarship.

Dong and Chapman‘s research showed that 94.3% believed they had made the right choice coming to China, 91.6% believed that the scholarship would help in building a bilateral relationship between their countries, and 77.4% of people were satisfied studying in China.

China effectively funds various educational programs that educate smart or elite students from developing countries which generally hold a positive viewpoint of China as being emotionally connected to Chinese friends and tutors.

Chinese books such as Sun Tzu Art of War and Laozi’s book Dao De Jing have gained international attention which has allowed people to respect Chinese philosophy.

China is far more powerful than many scholars imagine and is more than just the factory of the world. China can use institutions such as cinematics, education, and various forms of arts in its favor.

China with heritages that include the Great Wall of China and Shaolin Temple has helped China to create a powerful image that is both precious and timeless.

China is one of the key three East Asian countries that has played a significant role in shaping international politics. The region is a strong contender in Olympics, have excellent cuisine,and are well recognized for their digital tools that are celebrated in around the world.

 ChinaJapanSouth Korea
PhysicalDiplomacyCuppings, Tai chiKarate, JudoTaekwondo
a) Olympics Medals608498337
GastrodiplomacyNoodles, DumplingsSushi, WasabiGimbap, Kimchi
Audio-visual diplomacyTiktokAnime, MangaK-pop
The Soft Power 30 (2019)Rank:27
Score:51.25
Rank:8
Score:75.71
Rank:19
Score:63.00
Economic Diplomacy   
a) Exports (2018)$2.59trillion Rank:1$713 billion Rank:4$617 billion Rank:5
b) BrandsXiaomi, AlibabaToyota, HondaSamsung,Hyundai
a) World Heritage Sites552314
b) Intangible Cultural Heritage402120
c) WEF, Travel & Tourism Competitive (2019)Rank: 13
Score:4.9
Rank: 4
Score:5.4
Rank: 16
Score:4.8
d) Revenue by Tourism (2018)$11 billion$45 billion$18.46 billion

The public generally does not have time to go into details of the report but would make a quick judgment by looking at the score and rank given by various organizations that would help build the national image.

The chart indicates China is surrounded by one of the most competitive neighborhoods which also contributesto building an environment that is boiling with soft and smart power.

China has an advantage in Travel and Tourism due to its massive as China has the highest World Heritage Site and Intangible Heritage List while South Korea and Japan are making more revenue through tourism.

China is also the world’s largest exporter and sits beside other major exporting countries creating a hot belt of traders. The culture of competing in sports help China in building a competitive culture with its neighbors.

The presence of South Korea and Japan are significant as these two are also very important countries with Confucian values.

China intends to develop its soft power to use and buildi) national cohesion, ii) a stable and reliable economy, iii) a trustworthy state, and iv) an ancient but vibrant country.

Chinese gallery, clinics, and restaurants serve as a place for gathering and sharing their rich heritage. They could feel blessed with Chinese culture as well as feel strong being the world’s largest exporter. The Chinese dream creates this cohesive attitude and legitimacy of the regime.

Stability plays a key role in obtaining and holding Foreign Direct Investment. Stability is also key to the continuity of growth and helps in generating wealth to purchase and maintain security instruments.

Trustworthiness has been extremely difficult for China with its historic secretive attitude specifically in case of its habit of not disclosing international health threats as quickly as possible as they feel threatened by mass panic and face-saving culture.

 In 2013 President Xi Jinping remarked that the Chinese Dream would benefit other countries and their peopleby connecting the idea of an ancient country with modern technology.

The amount of criticism China receives projects the fear of foreign countries associated with the Thucydides trap. However, China still needs to modernize itself to be accepted as an ancient but vibrant country.It still needs to learn from its mistakes to be seen as a trustworthy and stable country to build its smart power to its full potential.

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