China is set to unveil a sweeping economic agenda for the next five years during a meeting of the National People’s Congress (NPC) next week at Beijing’s Great Hall of the People.
China’s 15th Five-Year Plan for 2026 to 2030 will be unveiled during the NPC, one of China’s most important political meetings of the year, which begins Thursday in Beijing and usually lasts a week and attracts 3,000 delegates from across China.
Recommended stories
list of 4 itemsend of list
The latest five-year plan was published in March 2021, as Beijing was dealing with the fallout from the COVID-19 pandemic.
This time, analysts say, China’s leaders will have to explain their approach to new challenges, from the economic fallout from U.S. President Donald Trump’s trade war to stagnating consumer confidence at home.
The NPC is being held in parallel with the Chinese People’s Political Consultative Conference (CPPCC), which began on Wednesday, and together they are known as the “Two Sessions.”
The CPPCC does not have the power to pass legislation, but it can make policy suggestions, and its committees play an important role in providing feedback to Chinese leaders.
But the NPC is known as China’s “supreme organ of state power,” the highest government body, and although functionally separate from the Chinese Communist Party (CCP), in practice the congress is guided by the CCP’s policy recommendations.
According to Changhao Wei, founder of NPC Observer, an independent website that follows the congress, this week’s meeting will codify its relationship with the CCP in drafting five-year plans under an upcoming “Law on the National Development Plan.”
Chinese Premier Li Qiang will also share the latest Government Work Report this week, outlining the state of China’s economy over the past 12 months and upcoming growth targets.
China is expected to announce a gross domestic product (GDP) growth target of between 4.5 percent and 5 percent by 2026, according to the International Monetary Fund, in addition to desired interest rate adjustments in light of inflation, unemployment and fiscal deficit.
Absolute loyalty
This year’s delegate list for both events is notable for the absence of at least 19 delegates whose credentials were revoked last week, indicating they are under disciplinary action. The sanctioned list, published last week by state media, included nine high-ranking members of the army.
They are among more than 100 military officers who have been dismissed by Chinese President Xi Jinping in recent years on various charges, including corruption.
The firings have been interpreted as a strategic move by Xi, who removed presidential term limits in 2018, to consolidate his leadership and eliminate factions within China’s growing governance structures.
“Xi is trying to ensure that the Chinese Communist Party’s system of governance is governed by absolute loyalty to him and that no one else has a sufficient power base independent of him to potentially challenge his authority,” said William Yang, senior Northeast Asia analyst at the International Crisis Group.
While China no longer relies on Soviet-style state planning, its tradition of five-year plans sets out a medium-term roadmap for economic reform, public spending, fiscal policy, industrial and energy goals and more.
Yang told Al Jazeera he hopes “industrial self-sufficiency” will be high on the agenda as China continues to compete with the United States for technological dominance.
“The Chinese government is expected to outline a series of technological and scientific initiatives aimed at developing key sectors, including next-generation artificial intelligence, advanced semiconductor production, industrial upgrades and further expansion of its renewable energy sector,” he said.
The five-year plan will address how officials can combat the problem of “devolution,” or excessive and counterproductive competition, said Fred Gao, who writes the Inside China newsletter from Beijing.
This practice has led Chinese companies to engage in “relentless price wars, undercutting each other to gain market share and ignoring product quality and service improvement,” Gao said.
“The end result is a vicious cycle of low prices, low quality and low margins that ultimately undermines the competitiveness of entire industries,” he told Al Jazeera.
Another new concept to watch out for at this week’s NPC will be mention of China’s “low-altitude economy,” which refers to a plan to use drones and other low-altitude vehicles to expand China’s delivery and logistics networks.
Consumer-led growth
This week it will be more difficult for Chinese officials to describe how they intend to guide the Chinese economy toward consumption-driven growth.
China’s economy has long been driven by sectors such as manufacturing, construction and real estate, meaning the transition will be a long process, while consumer confidence and spending have been shaken by the COVID-19 pandemic and economic slowdown.
Lynn Song, chief Greater China economist at ING Group, told Al Jazeera she expected to see policies targeting domestic demand and promoting growth in China’s services sector.
Gao said he will watch China expand consumption-focused policies and measures that will reduce the income gap between urban and rural residents, from adjustments to the minimum wage to higher pension payments.
In addition to economic objectives, the APN also addresses social and environmental policies.
One new law that will be closely watched is the “Law on Promoting Ethnic Unity and Progress,” which will codify China’s approach toward its 56 ethnic groups.
More than 90 percent of China’s population is ethnic Han and uses Standard Chinese as its primary language, but the vast nation is home to dozens of ethnicities, languages and dialects.
NPC observer Wei said the law would require “the abandonment of ethnic privileges and distinctions, and the proactive forging of a common culture, consciousness and identity,” which could likely lead to greater ethnic, social and political assimilation.
