Nyligen avslutades Kina sin\n13:e Nationella Folkkongress, n\u00e4rmare best\u00e4mt sin andra sittning under\ninnevarande mandatperiod. Detta \u00e4r en betydelsefull sammankomst med n\u00e4rmare\n3000 delegater fr\u00e5n hela landet. De viktigaste bidragen kom fr\u00e5n partichefen\noch presidenten Xi Jinping och premi\u00e4rminister Li Keqiang. Deras tal,\nkommentarer och ordval borde regelbundet granskas av svenska och alla andra\nutl\u00e4ndska Kina-analytiker. <\/p>\n\n\n\n
Man kan nog definiera\nNationella Folkkongressen som Kinas parlament med en enda \u00e5rlig sammankomst\nunder den 5-\u00e5riga mandatperioden, det vill s\u00e4ga varje v\u00e5r (i mars) under 10-14\ndagar. <\/p>\n\n\n\n
\u00c5rets resultat av sammankomsten\nkan klassificeras p\u00e5 f\u00f6ljande vis efter egen s\u00f6kprocess (hittade exempel och\nformuleringar \u00e4r i den engelska versionen):<\/p>\n\n\n\n
- med relativt konkreta resultat och\/eller\nuttalanden<\/em><\/li>
- med n\u00e5got mindre konkreta resultat och\/eller\nuttalanden samt uppmaningar<\/em><\/li>
- med uppmuntran eller uppmaning till snar b\u00e4ttring\n<\/em><\/li>
- med mer allm\u00e4nna slutsatser och\/eller\nuttalanden.<\/em><\/li><\/ol>\n\n\n\n
Denna kategorisering visar mer\nkonkret att det faktiskt togs upp en hel del kritiska framtidsfaktorer vid Nationella\nFolkkongressens senaste m\u00f6te. Ett n\u00e4mnv\u00e4rt antal obesvarade fr\u00e5gor kvarst\u00e5r\nemellertid, exempelvis <\/p>\n\n\n\n
\u00a4 hur l\u00e5ngt man har kommit med uppfyllelsen av de viktigaste m\u00e5len fr\u00e5n Tredje Plenumet i oktober 2013 (med utv\u00e4rdering 2020),
\u00a4 hur en hel del m\u00e5lkonflikter kan komma att bem\u00f6tas och hanteras,
\u00a4 hur s\u00e4nkningarna av bankernas kassakvoter och d\u00e4rmed efterstr\u00e4vad st\u00f6rre utl\u00e5ning kan matchas med den enorma privata och offentliga skuldb\u00f6rdan. <\/p>\n\n\n\nDet l\u00e4tt reducerade\nBNP-tillv\u00e4xtm\u00e5let f\u00f6r 2019 (6-6 \u00bd %) kommer sifferm\u00e4ssigt att klaras. Jag tippar\np\u00e5 6 \u00bc %. \u00c4ven under 2020 kommer tillv\u00e4xten knappast att underskrida 6 %. Men\nhur kommer den verkliga eller underliggande tillv\u00e4xten att se ut? Kommunistpartiets\n100-\u00e5riga jubileum \u00e5r 2021 till\u00e5ter inget annat \u00e4n goda statistiska resultat\n\u00e4ven vid slutet av perioden. Vid officiell ber\u00e4kning av BNP enligt k\u00f6pkraftsparitet\n\u00e4r Kina redan v\u00e4rldens st\u00f6rsta ekonomi – sk\u00e4l nog att sk\u00e4rpa den sv\u00e5ra Kinaanalysen.<\/p>\n\n\n\n
Hubert Fromlet<\/em><\/strong> Affiliate Professor at the School of Business and Economics,
Linnaeus University (Linn\u00e9universitetet)<\/p>\n\n\n\n————————————————————————————————————–<\/p>\n\n\n\n
English version<\/em><\/strong><\/p>\n\n\n\n
The 13th <\/sup>National People\u2019s Congress (NPC) with its second\nsession – a very important political event in China – has been concluded on\nMarch 15. The NPC is a kind of parliament and to some extent a legislative\ninstitution. The term of the NPC lasts for five years with one big annual\nconvention every spring (March) in Beijing, gathering around 3000 invited delegates\nfrom all over the country. <\/p>\n\n\n\n
For China analysts, it becomes increasingly important to analyze the\ncomments and statements by China\u2019s top politicians, particularly those made by the\nPresident of China and also General Secretary of the Communist Party of China,\nXi Jinping, and by the Prime Minister Li Keqiang. This includes reading their\nmessages also between the lines – which indeed is tricky but can be very\nfruitful. Li certainly has a great deal of economic competence. <\/p>\n\n\n\n
Main focus on the economic\ndevelopment and outlook<\/strong><\/p>\n\n\n\n
The 13th <\/sup>National People\u2019s Congress and its second session discussed\nactually a broad range of topics – topics, however, that were clearly dominated\nby concerns about the economy. Not everything was referred to Trump\u2019s\nprotectionism. Indeed, many bothering economic problems were described as\nhomemade. Other topics that were taken up – with direct or more indirect links\nto the economy – by important Chinese political leaders were, for example, education,\nhigh-quality development in different areas, environment protection (health), poverty,\nurbanization, corporate tax reliefs, etc. <\/p>\n\n\n\n
In a summarizing comment, Prime Minister Li Keqiang stressed that externally\ngenerated risks remain on the rise and that the real economy faces many\ndifficulties. He added that there still exist many hidden dangers in the\nfinancial and other sectors. Altogether, these concerns express quite clearly\nthe worries China\u2019s political leadership currently feels about the economy \u2013\nand it could also reflect a limited move to more transparency. This latter\nangle should be checked up more frequently in the future.<\/p>\n\n\n\n
Classification of applied communication<\/strong><\/p>\n\n\n\n
Below, I make an attempt to collect different comments or statements by\nprominent Chinese decision-makers during the NPC (mainly by the President of China,\nXi Jinping, quoted here as Xi, and by Prime Minister Li Keqiang, quoted here as\nLi; others are not quoted by name). Translated into the corporate language, Xi\ncan be described as the chairman of the board and Li as the CEO of China. To\nget some organization in the comments and statements from the NPC, I have\ndivided them in the following four different groups:<\/p>\n\n\n\n
Communication\nwith relatively concrete details:<\/em><\/strong><\/p>\n\n\n\n
\u00a4 \u201cMain tasks for 2019\u201d: cutting corporate burdens by reducing VAT, reduced corporate social insurance contributions, shortened list of FDI impediments, RMB 2600 billion investments in road, waterway and railway projects, increasing expenditure on education, cheaper rates for mobile internet services\u2026 (Li)
\u00a4 \u201cChina plans to reduce sulfur dioxide and nitrogen oxide emissions by 3 percent in 2019 \u2026\u201d (Li)
\u00a4 \u2026 credits by state-owned banks to SMEs should increase this year by 30 percent \u2026 (Li)<\/p>\n\n\n\nCommunication\nwith at least partial concretization: <\/em><\/strong><\/p>\n\n\n\n
\u00a4 \u201cThe standard for poverty reduction is to ensure that poor people have access to food and clothes and by the basic public services of medicine, education and housing \u2026\u201d (Xi)
\u00a4 \u201c\u2026 increasing downward pressure (on the economy) \u2026\u201d (Li)
\u00a4 \u2026 continued preferential policies for new energy vehicles \u2026 (Li)
\u00a4 \u2026 foreign firms will be able to transfer profits easily \u2026<\/p>\n\n\n\nCommunication\nstressing encouragement or urgent improvement:<\/em><\/strong><\/strong><\/p>\n\n\n\n
\u00a4 \u201c<\/em>There should be no retreat until a complete victory (against poverty) is won \u2026\u201d (Xi)
\u00a4 \u201cWe must crack down on those who try to contaminate poverty alleviation \u2026\u201d (Xi)
\u00a4 \u201c\u2026 promotion of China – U.S. trade negotiations \u2026\u201d (Li)
\u00a4 SMEs still have too limited access to money and the speed of innovation is still too modest \u2026 (Li)
\u00a4 \u201cGet fully prepared for the 2022 Olympic and Paralympic Games \u2026\u201d (Li) <\/p>\n\n\n\nCommunication with general comments and statements: <\/em><\/strong><\/p>\n\n\n\n
\u00a4 \u201cFinancial sector will open further \u2026\u201d
\u00a4 \u201cLocal governments are not allowed to raise new \u201chidden\u201d debt\u201d \u2026
\u00a4 \u201cFarewell to GDP as only performance indicator \u2026\u201d
\u00a4 \u201c<\/em>The government should build a fair, transparent and legal environment and create a good atmosphere for the development of private companies \u2026\u201d (Xi) .
\u00a4 \u201cChina wants to build world-class SOEs \u2026\u201d (Xi)
\u00a4 \u201cEnvironmental protection and economic development are closely integrated \u2026\u201d (Xi)
\u00a4 \u201cSocial sciences workers should do more field research \u2026\u201d (Xi)
\u00a4 \u201cCompanies should have more time for their business instead of dealing a lot with bureaucracy \u2026\u201d (Li) <\/p>\n\n\n\nIn certain cases, the borderline between the four groups may be nebulous. However, this is not a decisive point in this context. The main objective is to find out to what extent political comments from the NPC may have become more applicable for corporate (financial) decision-makers, analysts and academics with different kinds of interest in China. <\/p>\n\n\n\n
Conclusions from the 13th<\/sup>\nNPC<\/strong><\/p>\n\n\n\n
\u00a4 Altogether: more pragmatism and transparency at\nthis year\u2019s NPC – necessary also in the future.<\/em><\/p>\n\n\n\n
My own understanding is that the latest NPC obviously turned out to be\nmore open and transparent than all the previous sessions I have watched them since\nthe early 1990s. This time, a number of problems and necessary improvements\nwere taken up more or less distinctly by China\u2019s most influential political\nleaders. This hopefully starts a new trend which could mean some kind of\nprogress. For this reason, it will be interesting to observe whether this\nrecent impression has to be regarded as a temporary phenomenon or rather as a\nvisible initial step towards more (economic) transparency – indeed a change the\nworld outside China would appreciate. <\/p>\n\n\n\n
\u00a4 Make a difference between short-term and long-term developments! <\/em><\/p>\n\n\n\n
Certain comments in Sweden and abroad concluded recently – also during\nthe NPC – that current economic worries about China generally have been\noverdone and also the specific reactions on financial markets. This may have been\n– and probably is – a correct interpretation for the near future in a sense that\nno major economic accidents most probably will be reported from China any time\nsoon. It also seems to be the right conclusion that China really tries to work\nfor a solution of the trade war with the United States, as recorded from the NPC.\nHowever, it would be wrong to play down all the (other) risks and challenges that\nChina will be facing in a longer perspective. These more distant fears were\nalso expressed at the NPC and should be included in any well-founded analysis\nof the Chinese economy – the debt problem certainly included.<\/p>\n\n\n\n
\u00a4 The Chinese model needs adjustments.<\/em><\/p>\n\n\n\n
Only one year ago, Chinese political leadership still pronounced the\nsuperiority of their economic model with its politically determined term of a\n\u201csocialist market economy\u201d. However, functioning improvements of marketization\nalso assume more pluralism in different decision processes. Probably, China has\nto work more strongly in this direction \u2013 also in a social context. Legitimacy\nfor the political system in the past two or three decades was very much – and\ntoo much – related to achieved and expected high GDP-growth rates. <\/p>\n\n\n\n
In the foreseeable future – when GDP growth necessarily is confronted\nmore clearly with the \u201cnew normal\u201d of growth. Dampened GDP development and\nexpectations alone cannot satisfy major parts of the Chinese people anymore.\nInstead, social issues will increasingly gain momentum such as improvements of\nthe environment, better institutions (less corruption and bureaucracy), better\nsocial insurance and health care, acceptable pensions, future-oriented education,\nbetter food quality, etc. All this factors will become increasingly important.\nThus, a positively adjusted Chinese model for the future will have to include\nsizeable social progress – and still the ability to deliver reasonable GDP growth\nin order to keep unemployment roughly under control and to finance necessary\nsocial reforms. <\/p>\n\n\n\n
I would guess that really visible and felt social progress could be a\nmajor part of China\u2019s and Xi Jinping\u2019s way to a considerably revised content of\nthe old legitimacy mandate which mainly – or even only – was based on very\nstrong economic growth. It is certainly not by serendipity that Xi Jinping\nstrongly has been singling out \u2013 also at the NPC – that poverty has to be\ncombatted as efficiently as possible. It can be added that current official\nurban unemployment at around 5 percent does not look so favorable. And what\nabout rural unemployment? <\/p>\n\n\n\n
\u00a4 Improvements for the corporate sector \u2013 but more is needed.<\/em>
It can be noted that China\u2019s political leadership at this year\u2019s NPC has been increasingly focusing on conditions for the Chinese corporate sector, including lower taxes and social contributions but also better conditions for FDI. State-owned banks have been encouraged to lend more money to SMEs which so far have been depending too much on fresh money from the so-called shadow banks. Local governments are now expected to give better financial support to startups. These plans are certainly positive. However, considerably more has to be accomplished, particularly when it comes to private companies – and preferably more efforts and money should regularly flow to improved corporate conditions.<\/p>\n\n\n\n\u00a4 Financial reforms may be delayed further. \n<\/em>China\u2019s financial markets have been reformed in recent years – but\nnot very quickly. Focus should remain on further improvements of the domestic\nfinancial markets which – according to my own reading – has not been clearly\nemphasized during the NPC. Current problems in the Chinese economy should also\nmean that the complete opening-up of cross-border financial flows should – and\nmost probably will – take time. This conclusion should be particularly applied\nto cross-border trading of treasury bills, bonds and stocks. Full\nconvertibility of the RMB (yuan) is still not recognizable. <\/p>\n\n\n\n
\u00a4\u00a0 Trade deal with the U.S. remains difficult to achieve<\/em>
Sure, China wants a trade deal with the U.S. since China\u2019s exports really show a negative trend – but not at any price as explained repeatedly at the NPC. Financial markets should become more cautious with their spontaneous comments on American-China trade news. We may be more far away from a sustainable trade agreement between the two largest economies in the world than many (financial) analysts pretend these days. Who knows?<\/p>\n\n\n\n<\/figure>\n\n\n\n
Hubert Fromlet<\/em><\/strong>
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board<\/a><\/p>\n\n\n\n - med n\u00e5got mindre konkreta resultat och\/eller\nuttalanden samt uppmaningar<\/em><\/li>