This political ritual remains immutable. Every year in early spring, the annual session of the National People’s Congress opens for a week in Tiananmen Square in the heart of Beijing. And like every year, the 3,000 Chinese deputies from all the provinces of the country will unanimously ratify, without any possible challenge, the decisions of the Chinese Communist Party (CCP) in power, in the very solemn setting of the People’s Palace. Against a backdrop of giant red flags, the event should also be an opportunity to further cement the influence of leader Xi Jinping, who will aim for a new five-year term in the fall after 10 years at the head of the second world power. .
China’s growth is running out of steam
As tradition dictates, the opening speech for the session on Saturday March 5 will be delivered by Premier Li Keqiang, 66, who is expected to announce the Chinese economy’s growth targets for the current year. Weighed down by the coronavirus pandemic that appeared at the end of 2019 in the city of Wuhan and which had paralyzed its economy, China had given up in 2020 on setting an annual growth target. Overall recovered from Covid, the 6% growth target for 2021 was largely exceeded to reach 8.1% last year.
However, financial analysts from several investment banks anticipate a slowdown in this growth due to the slowdown in real estate. With construction, these two sectors account for more than a quarter of Chinese GDP and the setbacks of major real estate groups will impact growth figures. “The worst is yet to come” warned Agence France-Presse an analyst from the investment bank Nomura. Julians Evans-Pritchard of Capital Economics predicts a target of 5.5%, which would make it the lowest figure for China since… 1990.
Beijing presents itself as a potential “peacemaker” between Moscow and Kiev
Beyond economic stability, which is imperative to avoid the slightest social destabilization, China also knows that it will have to manage the coronavirus pandemic and especially the Omicron variant which is being deployed at low speed in around ten provinces of the country ( and very seriously in Hong Kong where more than 100 people are dying daily at the moment). On the epidemic front, China continues to follow a “zero Covid” policy, contrary to many countries which opt for coexistence with the virus and lift restrictions. If this strategy made it possible to recover quickly from the first wave, it is “today a brake on consumption” underlines the economist Ho Woei Chen of the Singaporean bank UOB.
China depends on Ukraine for grain imports
Finally, it will be necessary to pay attention to the speech of the Chinese Minister of Foreign Affairs Wang Yi scheduled for Monday, March 7. He is expected to present China’s overall diplomatic orientations for the coming year and address his ally Vladimir Putin’s war in Ukraine. This Russian invasion of Ukraine raises fears of a spike in food prices on which China has become very dependent for its imports. So far, Beijing does not condemn the Russian invasion and positions itself as a potential “peacemaker”, calling on the two parties to negotiate. This scenario does not seem to be in the plans of the Russian president who is likely to intensify his offensive in the coming days.