25 May, NIICE Commentary 4851
Bhavna Singh
Despite the COVID-19 pandemic, China has managed to successfully conduct two sessions, with Coronavirus containment and economic stimulus as key topics, among others like poverty alleviation, property market, industry policy, deterioration of the US-China relations and climate change. On 22 May 2020, the thirteenth National people’s Congress (NPC) delivered the Government Work Report, which not only summarised the achievements of the People's Republic of China so far, but also established a blueprint for economic and social development in the coming year. Though originally scheduled for March every year, the “Two Sessions” of the annual plenary sessions conducted by the national or local People’s Congress and the national or local committee of the Chinese People’s Political Consultative Conference, this year, took place in May. Unconventionally, China avoided setting an officially binding GDP growth target for 2020, but at the same time, it did set the unemployment rate benchmark at 5.5 percent.
Specifically emphasising ‘Six stabilities’ and ‘Six protections’, the work report announced that the Central Bank would implement several conventional monetary measures like interest rate cuts, RRR (banks' reserve requirement ratios) cuts and re-lending in order to boost growth of the SMEs. A fiscal stimulus package equivalent to five percent of the GDP was also announced. However, the political developments are much more significant while the world is distracted by COVID-19, especially since China has become proactive in making certain decisions which have been in a limbo for quite some time.
Imperatives of National Security
Two simultaneous developments in particular indicate quite contradictory trends. First, while Premier Li Keqiang passed the motion for a National Security Law during the NPC meet which was number five on the agenda, there was a divided mandate as the opposition warned that enacting the legislation would amount to announcing the death of the “One country, Two systems” policy in Hong Kong. The new law aims to establish a sound legal system and enforcement mechanism for safeguarding national security in Hong Kong Special Administrative Region (HKSAR), and would proscribe secessionist and subversive activity as well as foreign interference and terrorism in the city. The centre claimed that it was impossible for the city’s Legislative Council to pass a national security law to enact Article 23 of the city’s Basic Law given the political climate, which is otherwise authorised under Hong Kong’s mini-constitution to enact such laws locally and hence, this step was being taken on by the central authorities. The NPC is expected to vote on the resolution at the end of the annual session on 28 May, or if delayed, in June this year.
The move is pre-emptive when considering the fact that the US has been on a spree to certify Hong Kong’s autonomy under the Human Rights and Democracy Act of 2019. So far, US interventions in democracy and human rights in Hong Kong have allowed it to enjoy preferential trading and investment privileges. The locals in Hong Kong are equally anxious, as was reflected in their meetings with city’s delegates, or in the nation’s parliamentary sessions with Xia Baolong, Director of the State Council’s Hong Kong and Macau Affairs Office (HKMAO). The law has been in the offing since the demonstration started last year in July when radical protestors attacked facilities, burnt public property and stamped on the national flag. It was quite obvious that the state would come out with restrictive laws to prevent them from engaging in any kind of secessionist behaviour going forward. It is also understandable that the COVID-19 pressure has dampened the national, but not the local spirit, which explains the hurry in announcing the Law early on, beyond routine.
It certainly attests to the critical situation that China finds itself in at the current juncture, because despite a national emergency, Hong Kong remains the state’s top concern; one that needs to be resolved. The local movements remain strong, as the local opposition members who supported the movement actually succeeded in gaining ground in 17-18 districts during council elections held in Hong Kong last November.
Budgeting Pitfalls
The second aspect of the Chinese strategic thinking that seems contradictory to its aims and ambitions is its outlook towards its military budgeting. The current year’s Chinese military budget does not reflect a significant rise in monetary terms. So, if one was wondering whether the new legislation would provoke a new stream of violent protests, they are certainly not financially prepared in terms of military enforcement. From precedent, an estimated half a million people took to the streets in 2003 when the central government tried to enact such a law for the first time. Though this time, the undercurrents are highly unpredictable given the international COVID-19 situation. Nevertheless, a movement en masse cannot be ruled out. Executive Carrie Lam has maintained an eerie distance from the other delegates attending the national session and has been stressing firmly on upholding the “One Country, Two Systems” policy, without any cognisance of the changing narrative on the nationalist integration of Hong Kong.
This certainly depicts a gap in the understanding that the local and national leaders possess, as far as autonomy and governance systems in Hong Kong are concerned. Moreover, it raises questions about China’s intentions elsewhere, like its territorial claims in the Taiwan strait or the South China Sea. Any prudent policy would have necessitated an increase in military budgeting if China was to prepare for a large-scale upheaval in Hong Kong and Taiwan, which was not the case. Maybe, as always, much remains unstated and pensive in the Chinese strategic thinking, despite the reiterations made during the two sessions every year.
