Earlier this month, Beijing hosted the so-called “Two Sessions” gathering of officials from all over the country. There were some 3,000 delegates of the National People’s Congress (NPC), the country’s nominal legislature, plus an additional 2,000 members of the Chinese People’s Political Consultive Conference (CPPCC), an advisory body. Though mostly a rubber stamp for the decisions of Xi Jinping and the close allies he put into place earlier, the announcements made in the last few weeks make clear Chinese leadership’s priorities and plans.
President Xi talked a lot about putting people first. All leaders do, communist or elected. He described the people as the decisive force for building China. He added that by people he meant all peoples and ethnic groups in China. Despite this predictable boiler plate, the plans he and his fellow speakers advanced placed their emphasis elsewhere – on the military and on what could be called the international contest for technological dominance.
Goals for overall economic growth and development were modest, especially by Chinese standards. The government forecasts 5.0% real growth this year and the creation of 12 million new urban jobs to bring the unemployment rate below 5.5%. Although this growth expectation is fast by the standards of most developed economies, it constitutes the acceptance of a major slowdown in the pace of advance in China. It is especially modest in the wake of three years in which the Chinese people suffered the lockdowns and quarantines associated with Beijing’s zero-Covid policies.
Xi and company may even be setting things up to revise their growth expectation downward. This announced figure is already slower than the International Monetary Fund’s (IMF’s) 5.2% real growth estimate for 2023. And Beijing is surely aware that its original 5.5% growth estimate for 2022 far exceeded 3.0% growth that actually occurred, a number that some independent sources claim overstate last year’s reality. However 2023 actually turns out, these projections reveal a chastened leadership in Beijing.
However much Xi stressed people’s needs, his specific economic plans seek less the kind of growth that would help everyday Chinese and more an obsession with gaining for China a global advantage in technology. He told the delegates about Chinese dominance in artificial intelligence (AI), cloud computing, semiconductors, and hardware. consumer needs were not even mentioned either by Xi or the state planner, the National Development and Reform Commission (NDRC). Instead, China’s leadership announced a 50% jump in funds for chip development and related technologies and increasing 5G base stations some 30% to 2.9 million by the end of the year. Beijing looks for foreign investment to help with this and the general push to advance Chinese technology. Premier Li Keqiang spoke of encouraging such investment flows by offering foreign investors “national treatment” and more freedom of action than in the past, but other than these general promises, his remarks offered few specifics. Given America’s growing suspicion of Beijing, Europes and Japan’s as well, this part of the plan might be harder to achieve than Li expects and so also the nation’s general goals in technology.
The sessions did touch on green issues, but these remarks turned almost exclusively on technological advances and especially energy independence. In other words, they are as much a part of China’s desire to outperform the west and in time do without its technological input than they are efforts to dial back CO2 levels or pollution generally. Parallel to this single-minded focus on competitiveness was the clear emphasis the sessions gave to military matters.
Beijing told these thousands of delegates that it plans to continue its efforts to “complete national defense and military modernization by 2035.” It has budgeted a 7.2% boost in military spending this year. That figure exceeds the 5.7% overall growth in government spending, indicating another year in which the People’s Liberation Army will increase its share of the overall budget. The relative increase in military outlays extends the gap between Chinese defense spending and that of the next 13 Indo-Pacific countries combined. Clearly, Beijing plans to continue to challenge the United States and its allies in the western Pacific. Premier Li did however offer one welcome note of conciliation. He spoke of China’s reunification with Taiwan but stressed “peaceful development of cross-Strait relations.”
Aside from a few specifics, there was little new to come out of these otherwise important meetings. Xi avoided the stress he has in the past placed on centralized decision making, but the economic and military emphasis of the meetings make clear that the trend will continue and continue to serve military efforts at competition with the west and its allies. Meanwhile Li’s otherwise welcome remarks on keeping the peace in the Taiwan Straits deserve a pinch of salt given China’s recent bellicose actions in this area.