Written by: Niv Schwartz and Jonathan Levit
The third session of the 13th National People’s Congress (NPC) opened at the Great Hall of the People in Beijing on May 22, 2020. The Premier of the NPC acknowledged that China’s economy faces “difficult factors” and “uncertainties” due to the novel coronavirus, which has sharply reduced global demand and dampened economic activities. The epidemic has not yet come to an end and the tasks China faces in promoting development are immense. China must increase its efforts to minimize the losses resulting from the virus and fulfill the main goals for economic and social development this year.
Before we delve into the 2020 Government Work Report we must review the successes from 2019. The goals and tasks set aside in 2019 were all accomplished. First and foremost, the economy remained relatively stable. China’s GDP reached 99.1 trillion yuan, the unemployment rate dropped below 5.3%, and 13.52 million new urban jobs were created.
Now let’s take a look at the highlights of the 202 Government Work Report delivered by Premier Li Keqiang:
This year, China will prioritize stabilizing employment, ensuring living standards, winning the battle against poverty, and achieving the goal of building a moderately prosperous society. China has not set a specific target for economic growth this year. The country will face many factors that are difficult to predict in its development due to the great uncertainty regarding the COVID-19 pandemic, the world economicenvironment, and the trade environment. Many of the newly established goals have been adapted to ensure shocks like COVID-19 do not hamper China again. Two main targets mentioned in the report include the pursuit of a more proactive and impactful fiscal policy as well as a flexible and prudent monetary policy. These new implementations will allow for funds to be allocated for COVID-19 control and strengthen the overall employment-first policy with comprehensive measures.
The report highlighted the desire to adopt a more aggressive implementation of macro policies and a greater focus on stabilizing the employment of enterprises through the decrease of taxes and fees, reducing enterprises’s production and operating costs, increasing financial support to support businesses, and increasing employment. These efforts will save enterprises more than 2.5 trillion yuan throughout the year, ensure that small businesses have better access to loans, and greatly increase employment. In addition to supporting macro business, the report also outlines ways to increase the development and speed at which it happens. Through many advanced reforms, upgrading smart manufacturing, creating new competitive strengths in the digital economy, subsidizing business startups, and fostering an enabling environment China will see much more development and progress in the coming year. Later in the report, the government highlights expanding domestic demand and accelerating the transformation of the economic development model
To accomplish this, the Chinese government has to deepen the supply-side structural reform, focus on the wellbeing of its citizens, and boost consumption. Most importantly, China must expand its effective investment. Priority will be given to new infrastructure and new urbanization initiatives and major projects, which will not only boost consumption and benefit the people, but also facilitate structural adjustments and enhance the sustainability of gro and agricultural harvests as well. The goal is to alleviate the hardships for those living below the poverty line and increase agricultural harvests. By channeling greater amounts of energy and resources into poor counties and villages much of the poverty can be eradicated. Rural revitalization will create more jobs and make bad areas of China much more habitable.
Nearing the end of the report promoting a more liberal open-door policy and stabilizing basic foreign trade is covered in great detail. China will be more committed to opening its borders wider to the world. By doing this China’s industrial and supply chains will become more stable further enhancing reform and development. The last and most important topic covered in the report is the efforts to make life better for those living in China. The government indents to clean up many areas of Chinese life that have been problematic in the past. These issues include health care, basic medical services, education, and improving basic living needs.
These monumental changes would help uplift Chinese society and bring the country to the forefront of stability. With so much uncertainty there is no saying when these changes will be implemented, but the Chinese government has shown a strong dedication to making the situation much better in China.