25 May 2020, NIICE Commentary 4844
Dr. B. R. Deepak
“Two Sessions” refer to convening of the annual meetings of the National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC). The former that has close to 3000 deputies ‘elected’ by provincial people’s congresses according to China’s Constitution is the highest organ of state power, and the latter with over 2000 representatives is NPC’s advisory body consisting of eminent personalities from “political parties” and civil society. The real power, however, is wielded by the one, who holds the posts of President, General Secretary of the Communist Party (CPC) and Chairman of the Central Military Commission (CMC). Usually convened in March, this year’s “Two Sessions” were delayed by the outbreak of COVID-19 and was held on 21 and 22 May simultaneously, an indication that it is business as usual in Beijing.
At the outset, as international political and economic pressure builds on China in the wake of COVID-19, President Xi Jinping, at least since early February has been at the forefront of “people’s war” against the coronavirus. The “mishandling” of the corona crisis by the West, which China pronounces as “incompetence” of the West has indeed turned away the wrath of Chinese people against their leaders’ initial laxity in fighting the virus and a possible “cover up” as alleged by the West. Thus, reinforcing the narrative that only the development path, system and ideology chosen by China (also pronounced as four confidences including culture) has the capacity and capability to deal with crisis of such magnitude, mobilize people and resources, which no other country can match. Without any doubt, the “two sessions” have reiterated their faith in Xi Jinping as a “core leader.”
Secondly, two major goals identified for the first centenary in 2021 are – to double the 2010 GDP of China and make China a moderately prosperous society by totally eradicating poverty. In fact, China has achieved both the goals in advance. In 2010 China GDP was 6.09 trillion US dollars, which in 2020 has been projected at 13.9 trillion US dollars. In regard to poverty, China alleviated 800 million people in the last 70 years, lifting almost 70 percent of the world’s poor population, and meeting the objectives of Sustainable Development Goals (SDGs) almost a decade ahead. The real challenge in post COVID 19, however, would be the realization of second centenary, especially when the US and the West has levelled China as a “free rider” using its “sharp power” to penetrate deep into the ecosystems of open democracies while denying them the access in many sectors.
Therefore, the real worry for China, rather would be, how to put its economy back on the tracks as economy shrunk by 6.8 percent in the first quarter of 2020. As projected by the IMF, China like other Asian countries may see very little or zero growth in 2020. During the Asian Financial crisis in 2008, China’s stimulus stood at 586 billion US dollars, since the magnitude of economic depression is much larger, stimulus could be 2-3 times bigger than the year 2008. China is likely to identify key sectors mostly from its “Made in China 2025” strategy or the so called “new infrastructure” focusing on technology innovation and information networks to support high-quality growth. China is estimated to spend 1.4 trillion US dollars in these sectors by the year 2025, aiming to achieve 40 percent “self-sufficiency” by 2020, and 70 percent “self-sufficiency” by 2025. This could be a herculean task, especially when the US has banned 33 of China’s “new infrastructure” companies to buy crucial components from the US. Added to this, the rising unemployment (pegged around 6 percent), 25 million workers sitting in their homes in the rural areas, and another 75 million working from home on slashed salaries, plunging retails and investment, weak global demand etc. will be riders to recovery. Though China has revealed to create 9 million new jobs in 2020 but in the face of above facts, it will be a difficult target to accomplish.
Thirdly, as China comes under attack from the global community and its rivalry grows with the US in the Asia Pacific, it’s behavior would be more assertive, as has been reflected in its “Wolf Warrior Diplomacy” at diplomatic front, opening up new hotspots along the borders at military front, and trying to rename areas which it perceives belong to it at cultural front. Surprisingly, the Government Work Report of Premier Li Keqiang has recommended 6.6 percent of the GDP (178.2 billion USD) for the People’s Liberation Army, not a significant decrease from last year (7.5 percent), especially when the growth has dipped to negative. It is also believed that the real spending is much higher than the officially declared budget. For example, in 2019, the SIPRI pegged China’s nominal defense spending at 261 billion USD, 1.5 times larger than the official figure of 177.5 billion USD. Nevertheless, China will not go whole hog as far as reclamation of territories like Taiwan, Senkaku, Spratly and other contested border areas are concerned. China’s knows it is not there as yet, and hence long term goals for second centenary. It will also not prefer a military confrontation with the US.
Fourthly, in the face of West’s threat of decoupling with China, which at this stage remains exaggerated, China will do its best to keep its industrial and supply chains stable, prop up foreign capital utilization in free trade ports like Hainan, and other regions such as Greater Bay and Xiong’an areas. Greater Bay Area has certain advantages as 20 of world’s top 500 enterprises in sectors such as telecom, finance, automobiles, real estate and home appliances are based here, and are fed by around 15 innovation centers all over China. These areas along with other nodes in the coastal belt and hinterland will be instrumental in supporting the Belt and Road initiative of the Chinese government and emerge as new innovation centers for supporting the “new infrastructure”. However, the perennial Hong Kong democracy movement, and a new security law (read sedition) proposed by the NPC on 22nd April for Hong Kong may impact negatively for the region. As China believes that the trouble makers behind the protests are foreign forces, especially the US and the UK, it has deemed it fit to circumvent Hong Kong and bring in the new law. China seems to be readying itself for using force in Hong Kong in near future.
Finally, as the US falters from assuming global leadership and continues to move away from multilateralism, weaken global institutions, and embrace protectionism and nativism, China will not shy from stepping in and filling the vacuum. For example, when the US suspended aid to the WHO, China announced an aid of 20 million US dollars followed by 2 billion USD to the United Nations. Internally too, China has earmarked 141 billion US dollars to fight the COVID-19. It has already advocated the notion of community of shared future which has found greater appeal in developing countries. When UN’s SDGs such as poverty alleviation, universal education, gender equality, child mortality, pandemics like HIV, environmental protection, global partnership for development are still around us and many countries finding it difficult to get rid of them, a collective approach in dealing with these that is inclusive, open ended, will bring mutual benefits and common development. China has benefitted immensely from the liberal order; therefore, it will continue to support international organizations and call for greater cooperation against the pandemic in various groupings like SCO, BRICS, G20, and others.
