Steady high-quality development to usher in a brighter future
Xin Ge
A view from the Oriental Pearl Tower, in Shanghai, China, July 19, 2021. /VCG

A view from the Oriental Pearl Tower, in Shanghai, China, July 19, 2021. /VCG

Editor's note: Xin Ge is an associate professor at the School of Public Economics and Administration, Shanghai University of Finance and Economics. The article reflects the author's opinions and not necessarily the views of CGTN.

China's top legislature, the National People's Congress (NPC), kicked off its annual session on March 5. Together with the country's top political advisory body – the Chinese People's Political Consultative Conference (CPPCC) –opened on March 4, the "Two Sessions" usually serve as a window for the world to observe China's development and essential economic and social plans.

At the start of this year's session of the NPC, Premier Li Keqiang, on behalf of the State Council, delivered the annual report on the government's work. Similar to the U.S. president's State of the Union Address, the government work report reviews past year's progress and outlines goals for the coming year.

The report first noted that the past year is a landmark year in the history of the Party and the country. Despite multiple challenges and complex risks within and outside the country, China has accomplished the whole year's main economic targets, and made several major achievements in economic and social development in the first year of the 14th Five-Year Plan (2021-2025).

In the face of multiple headwinds in the past year, the new development paradigm of "dual circulation" has precipitated the resilience and stability of Chinese economy. In 2021, as the world gradually convalesced from the COVID-19 pandemic and all countries attempted to roll out economic stimulus packages, China's GDP amounted to 114.37 trillion yuan ($18.30 trillion), notching a decade-high annual increase of 8.1 percent. Furthermore, as the world's largest trading nation and second-largest economy, China played an indispensable role in the world economy. The country's foreign trade maintained excellent growth momentum, with both imports and exports registering phenomenal growth of over 20 percent.

Despite the overall rapid progress, the development does not always process smoothly. Clearly acknowledging the triple pressure on the economy, namely demand contraction, supply shocks and weakening expectations, the central government set this year's growth target at 5.5 percent with a priority given to the stability of high-quality development. The work report proposed a bunch of pragmatic policies that aim at building a stronger domestic market, fostering new drivers for growth, providing better social services, etc. The answers to three "hows" particularly merit our attention.

First, how to stabilize the overall economy? In a meeting on March 2, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, remarked that the Chinese economy is facing lackluster demands, with slowing consumption and investment, which needs to be spurred and expanded.

At the macro level, several policies can be highlighted. In the financial sector, adjustments to the price of real estate and changes in the demand-side are good for the financial sector, but drastic adjustment should be avoided. While there is still a need for adequate easing of the prudent monetary policy to improve the overall monetary environment as the foundation for a stable growth, the report suggests that it is crucial to optimize structure to avoid liquidity "flooding," which may lead to financial risks in the market.

In the industrial sector, the Ministry of Industry and Information Technology (MIIT) has vowed to implement an array of policies to ensure stable operation of industry and supply chains and energy production. The Ministry of Commerce is about to implement cross-cyclical policy adjustment, as well as market diversification to ensure supply chains and to foster trade innovation to stabilize growth. For the service sector, which was crippled by the COVID-19 pandemic, the government has announced 31 important policies and tax and fee cuts to bolster it.

The call for "steadiness while pursuing progress" is also resonated by rural economy. The focus of rural development in 2022 is on the integration of value chains in rural areas to offer more jobs to farmer and increase their income. The report also vows to hold the "red line" of 120 million hectares of arable land within this year.

The opening meeting of the fifth session of the 13th NPC at the Great Hall of the People in Beijing, China, March 5, 2022. /Xinhua

The opening meeting of the fifth session of the 13th NPC at the Great Hall of the People in Beijing, China, March 5, 2022. /Xinhua

Second, how to deepen reforms and achieve the "dual carbon" goal? According to the report, China pledged to firmly deepen overall reforms, to strength market vitality and internal momentum. For the the industrial sector, the MIIT has stepped up efforts to boost investment in manufacture, expand consumer demand, and explores drivers for digital industries such as 5G, artificial intelligence and virtual reality. To facilitate the development of small- and medium-sized enterprises, more policies are focused on tax refunds and cuts, which is expected to total around 2.5 trillion yuan ($395 billion) throughout the year, and offering more financing channels and unleashing consumption potential. For export enterprises, the State Council required the local governments to increase policy support for export credit and export insurance in accordance with WTO rules.

Concerning sustainable development, China allocated 437.4 billion yuan ($69.9 billion) for ecological and environmental protection in 2021. To achieve the "dual carbon" goal – carbon peaking in 2030 and carbon neutrality in 2060, the state council will take steps to implement the action plan on energy conservation and emissions reduction, which entails the adjustment in the industrial structure and promotion of innovative measure.

Third, how to improve people's livelihood? Notable on the societal side are the commitments to employment, education and training, healthcare, elderly care, housing, social service expansion, food security, rural revitalization and keep people from sliding back into poverty. As Premier Li noted, the government will "tighten its belt" and keep spending low to benefit people.

Employment is pivotal to people's well-being. The Chinese government will strengthen the "employment-first" policy, aiming to create over 11 million new urban jobs in 2022 and targeting a surveyed urban unemployment rate of no more than 5.5 percent.

It is also noticeable that the state will improve supporting measures for the three-child policy. Care expenses for children under three will be included in the special additional deductions for individual income tax. And the country will develop public-interest childcare services to ease the burden of raising a family.

For people living in the rural areas, the premier said China will execute a better monitoring and assistance mechanism to ensure people do not fall back to impoverishment in large numbers, on top of enhancing social services in education, healthcare, eldercare, etc. And the country will run trials on extending the rural land contracts of all counties by another 30 year on the expiration of second-round contracts.

2022 is a crucial year for the country's march toward building a modern socialist country. While the whole world is still struggling with the surge of Omicron variant and facing sluggish economic recovery, robust policies and measures to ensure steady high-quality development of China as outlined in the government work report will definitely inject vigor and confidence in working together for a brighter shared future.

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