China’s political leaders will soon give important messages

24 February, 2021

At the end of next week, China’s most important political decision makers and delegates from all over the country will come together in Beijing to join the National People’s Congress (NPC), the formal legislative organ of the People’s Republic and often in the West described as a kind of parliament. The NPC is always – both formally and informatively – an important event. This year, the NPC should be regarded as even more important than usual (more about this below). There are at least five outstanding ingredients the Chinese leaders probably will promote at the NPC as success stories of yesterday, today, and probably tomorrow:

¤  the elimination of absolute poverty in 2020 – indeed a major success;

¤  not the situation but the consequence of the political tensions with the U.S. and the EU, making it possible for China to demonstrate its capacity of increasing political and military power; exciting to watch what tone with the U.S will be applied;

¤  the superiority of China in the systemic fight against covid-19, and the achievement having been the only major economy with positive GDP growth in 2020; furthermore, I really would be surprised if the official GDP forecast for 2021 looked modest; 8 is the luckiest number in China, so I predict a GDP goal in 2021 at 8% (or somewhat lower, 7-8%);

¤  the new 5-year plan, possibly being presented again in a positive Communist Party (CPC) centenary spirit with more details – maybe including applicable plans how possibly to convert China into a high-income country;

¤  the strong vision of making it possible for China to double its GDP per capita by 2035 – hopefully explained by revealing details.

2021: A very special year – the centenary of the Communist Party of China

All these – in CPC sense – good news for the Chinese people will be embedded in a particularly positive way because of the 100th anniversary of the foundation of the Communist Party of China. This should be kept in mind when interpreting different NPC speeches starting on March 5.

It will be very interesting to observe how concrete or vague different objectives will be presented at the NPC – particularly when it comes to China’s high-tech future and the way to manage the objectives of the “Made in China 2025 plans” and beyond. What will the President of China and CPC Chairman Xi Jinping tell the NPC audience more concretely about the long-term objectives and projects until 2035? Hopefully more about envisaged social and environmental improvements. Certain official hints in this direction have already been made in a previous official outline for long-term goals until 2035.

Finally, I am very keen to know whether a reasonable evaluation of the reform plans from the Third Plenum of 2013 until 2020 will be presented (which originally was planned for 2020). Last year, I could not find any detailed evaluation.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board


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Transparency, openness and honesty in the fight against covid-19

16 February, 2021

This time, I am publishing only a short article – but in both English and Swedish, . The main objective is to point at the insufficient efforts of the government and  authorities to optimize transparency, openness and honesty in the Swedish fight against covid-19.

In my view, more can be done. This can be said about media as well. How many debate articles have so far been published with institutional angles as mentioned above? However, my main objective with these lines is not to criticize politicians, authorities or the press. My intention is rather to focus on an important scientific research area which until now has been completely underestimated by practitioners.

Swedish corona-transparency is still not convincing for an advanced economy. Too much is hidden, difficult to find or left out at press conferences. The same can be said about openness with several occasions last year of downplaying the covid-19 risks. Altogether, there is an obvious risk of deteriorating honesty gradings (see also Eichengreen et al below).

I am talking in this context about institutional economics, a research area that was awarded with the Nobel Prize at several occasions (Coase, North, Ostrom, Williamson). Douglass North (1920-2015) is often regarded as the father of New Institutional Economics.

Currently, professor Barry Eichengreen (Berkeley) belongs to the outstanding academics with a major institutional nexus. In 2020, he published in Finland – together with Aksoy and Saka – the following interesting lines related to our topic:

“…trust and confidence in government are important for the capacity of a society to organize an effective collective response to an epidemic. Yet there is also the possibility that experiencing an epidemic can negatively affect an individual’s confidence in political institutions and trust in political leaders, with negative implications for this collective capacity…”

Eichengreen et al describe exactly what I mean. Better awareness of the problems mentioned above by politicians, health authorities and media could move the fight against covid-19 a bit longer in the right direction.

This conclusion can also be applied to other advanced countries and emerging markets.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board


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About the understanding of the United States and China

26 January, 2021

Somewhat unexpectedly for many analysts, we notice currently some sharpening of the more or less permanently underlying psychological tensions between the United States and China. However, the pitch has become louder in recent days.

This is not really a surprise. Market expectations were too high in a sense that the new president of the United States would behave less challenging in the eyes of the People’s Republic – an interpretation I have been warning for in this blog right on the American election day (“Today, we do not know about the outcome of the American presidential election. We do not even know whether a possible President Biden would work for really improving relations to China – if yes probably not very quickly”; from November 3, 2020). Besides, it should not be overlooked that Democratic administrations historically have proved more protectionist than Republican.

The prominent role of psychology in both countries

The American psychology: The recent violation by Chinese fighter planes of what the U.S. calls “Taiwanese airspace” is, of course, a strong verbal provocation for the Chinese political leaders. Taiwan as a part of the People’s Republic is one of the most important issues for president Xi and his other leaders. Consequently, foreign governments are not welcome at all to regard Taiwan as some kind of independent. Furthermore, it should not be forgotten that the U.S. now considers China increasingly as a serious technological competitor. This is why the United States also under President Biden will keep quite some distance to China. He will not work ambitiously for fundamental improvements between the two strongest superpowers. Psychology plays a major role also in this context.

The Chinese psychology: The understanding of the Chinese position vis-à-vis the United States needs a lot of psychological application as well. Criticizing Beijing’s Taiwan policy or favoring Taiwan from abroad is regarded as a no go. A second important obstacle for normal Sino-American relations can be found in the fact that China in 2021 is celebrating the 100th anniversary of the foundation of the Communist Party. American verbal interference cannot be accepted. Chinese leaders want to meet their people and the whole world from a position of strength.

Here, the Chinese have a very important and prestigious event that does not allow for what the Chinese may call provocation or humiliation from the United States without reaction.

Conclusion: There is no room for (visible) improvements of Sino-American political relations for the time being, contrary to market expectations only a few days ago. Psychology plays a prominent role also in this context.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board


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