Policy

Gray is the new black as Premier Li delivers his work report

Growth targets, Hong Kong and a jump in defense spending are outlined at the National People’s Congress

Mao Zedong had the Red Guard. Xi Jinping has the Gray Guard.

Sitting center-stage in China’s Great Hall of the People surrounded by the Communist Party inner circle, he was the master of not just all he surveyed but of an economic and military powerhouse. 

Premier Li Keqiang might have been doing the talking, presenting his 2021 Work Report, but Xi with his pepper-streaked hair was the undisputed big boss at the National People’s Congress.

In a country where image is everything in politics, the ink-black dyed hair of aging Politburo members is no longer in vogue. Gray is the new black. 

It is far cry from Mao’s destructive student army of Red Guards that ran amok in the late 1960s. But it does illustrate the cult of Xi.

Still, Premier Li bucked the “gray trend” when he delivered his 60-minute long work report in front of  NPC delegates. Mind you, it did seep into sections of his speech. 

“[China] will promote the growth of mutually beneficial China-US business relations on the basis of equality and mutual respect China stands ready to work with other countries to achieve mutual benefits on the basis of greater mutual opening,” he said in typical gray Party cliches.

Work Report facts:

  • China has set a growth target of around 6% this year.
  • In 2020, GDP growth was 2.3% despite the damage caused by the Covid-19 pandemic.
  • China was the only major economy to expand amid the global lockdown.
  • Up to 11 million urban jobs will be created this year – the same figure as 2019.
  • Urban unemployment is expected to be 5.5%. It was 5.2% in December.
  • Defense spending will edge higher from last year to 6.8% or 1.36 trillion yuan (US$210.1 billion).
  • Research and development spending will increase by more than 7% during the next five years.
  • But Basic research will jump by 10.6% in 2021.
  • R&D companies will get preferential lending rates and massive tax breaks of up to 75%.

What was said: “A target of over 6% will enable all of us to devote full energy to promoting reform, innovation, and high-quality development. The projected targets for growth [and] employment should keep the economy performing within the appropriate range. These targets are also well-aligned with the annual goals of subsequent years in the 14th Five-Year Plan period, and they will help sustain healthy economic growth,” Li said.

Reaction to the news: “China unexpectedly set a GDP growth target, but at a relatively low level. I am worried that the low GDP target could signal a possibility that the government includes a scenario for the comeback of Covid,” Iris Pang, the chief economist for Greater China at multinational bank ING, wrote in a note as reported by the CNN network.

Another viewpoint: “The risk to the Chinese economy [in 2021] is a consumption slowdown,” Yao Yang, the director of the China Center for Economic Research at China’s Peking University, said, adding that China’s overall unemployment rate could be near 20%.

Delve deeper: Li made it clear that there will be reform to the electoral system in Hong Kong as reported by chinafactor.news earlier this week. He also warned that Beijing would crack down on “interference” from “external forces” in the city. As for Taiwan, Li reiterated the “one-China principle.” But he added: “China would deter any separatist activity seeking Taiwan Independence.”

China Factor comment: Apart from the usual headlines about growth targets, what really stood out was confirmation of the plan to destroy Hong Kong’s electoral system with Communist Party “patriots” replacing pro-democracy candidates. The decision to increase research and development spending was another key highlight amid the China-US technology war. But, perhaps, the most controversial issue was the “Polar Silk Road” and the development of the Arctic and Antarctica. Environmental groups will be up in arms, judging by Beijing’s past record.

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