China’s Two Meetings And What They Mean For The United States – Analysis
By Published by the Foreign Policy Research Institute
By June Teufel Dreyer
On the first Monday in March 2024, delegates—nearly 3,000 to the National People’s Congress (NPC) and over 2,000 to the Chinese People’s Political Consultative Conference—gathered in Beijing. With the exception of a handful of members of ethnic minorities in colorful costumes, the bright jackets of some of the very few female delegates and a phalanx of military officers who marched in en masse, the huge auditorium was a sea of navy blue suits. Delegates were served tea in identical cups by young women in identical red suits. A copy of the premier’s work report, the centerpiece of the NPC meeting, was on each delegate’s desk. Unity was the implicit message.
What are China’s Two Sessions?
The NPC is, according to China’s constitution, the supreme governing body of the People’s Republic of China (PRC), but in practice is closely supervised by the Chinese Communist Party. Its delegates represent all areas of the country. They vote, typically unanimously or nearly unanimously, on the proposals proffered to them. The Chinese People’s Political Consultative Conference is strictly advisory, though consultations do take place. Its members include prominent businesspeople, experts in sundry fields like law and medicine, artists, the Chinese diaspora, and members of the powerless but legally permitted eight political parties.
The Politics: Xi Jinping and the Communist Party Continue to Consolidate Power
The meeting was not without drama. The salient issue was what did not happen: Just before the event began, it was announced that Premier Li Qiang would not give a press conference, thus breaking with a three-decade old precedent. While reporters find the remarks useful for their stories, there is little spontaneity in the press conference. Questions are submitted beforehand, with no guarantee that the premier would address them or would deliver the kind of meaningful response that makes good stories. Speculation on the reason for the change focused on the weak position of the premier himself. Observers noticed that he appeared ill at ease, touching things on his desk and misspeaking several times, once even continuing to read while the audience was applauding. Li spoke for only fifty minutes, less than half the time of his predecessors.
Although President Xi Jinping, seated front and center on the dais, never spoke, he was clearly in charge. The report mentioned his name sixteen times, more than in any other report since Xi took office over a decade ago, and even used a phrase reminiscent of Mao Zedong as China’s “Great Helmsman.” In another indicator of Xi’s dominance, the State Council Organic Law was revised for the first time since 1982, calling for the State Council to “uphold the leadership of the Chinese Communist Party.” This strengthens the authority of the Party, specifically of Xi, over the Council. In other words, further solidifying the Party’s and Xi’s control over the state. The measure passed by 2,883 votes with eight opposing and nine abstentions. Symbolically, the 1982 revision had been put in place as part of paramount leader Deng Xiaoping’s efforts to separate the Chinese Communist Party from the government. Noting that the president had almost completely eclipsed the premier, Singaporean professor Alfred Wu observed, “no one is number two.” Several years ago, term limits for holding China’s highest office were removed to allow Xi to stay at the helm as long as he wishes. Should the seventy-year-old opt to step down or become incapacitated, there is no clear successor.
Struggling with Economic Growth
China’s economic growth rate is projected to be “about” 5 percent, though experts are dubious that this can be achieved. There were already doubts that last year’s growth was really 5.2 percent as claimed. Some economists believe it could have been as low as 1.5 percent, with the higher figure inflated, among other reasons, because it was based on 2022, when production suffered because of Covid restrictions. The Work Report called for helping local governments solve their debt problems, creating twelve million new jobs, and fostering improvements in health and elder care: the latter to alleviate problems attendant on China’s increasing proportion of senior citizens. Chinese leaders also announced their intention to further develop major science and technological infrastructure. Lastly, foreign-funded enterprises were invited to participate in government procurement, bidding in accordance with the law and on an equal footing with domestic entities.
For many Chinese, the economy feels as if it is in recession. The property sector, which had accounted for about a quarter of GDP, remains in a precarious state, with government attempts to prop it up regarded as insufficient. Youth unemployment is at a historic high and average salaries for those fortunate enough to have jobs have declined. Although the work report stated that foreign investors are welcome, many have been put off by recent anti-espionage and data protection laws, as well as by several sudden high-profile detentions of Chinese and foreign businessmen. Foreign direct investment in China has fallen to a thirty-year low. China saw net disinvestment in foreign direct investment in the third quarter of 2023 for the first time since the 1990s, meaning that firms moved more capital out of China than they brought in. Chinese firms increased outbound investment as well, evading government restrictions in various ways. In the words of one expert interviewed by BBC, “There are fewer political checks and balances, there is no transparency. This is the bigger concern for investors … you cannot predict what’s going to happen, so you avoid the risk.” Economists worry about a vicious cycle of low confidence feeding upon itself and jeopardizing recovery. Stasis is predicted at least until the third plenum of the Party’s 20th Central Committee, expected to occur during summer 2024.
Focus on the International Dimension
In addition to the press conference that did not happen, the other big surprise was that the Party did not name a new defense minister. Wang Yi, the only individual in PRC history to be foreign minister twice, remains in his position. Wang had previously served as foreign minister before being elevated to the Politburo in 2022 and made director of the office of the party’s Central Foreign Affairs Commission. However, his replacement, Qin Gang, served only a few months before being dismissed amidst a romantic scandal, at which point Wang resumed the foreign ministry portfolio on what was expected to be an interim basis.
Wang, known for his combative comments, gave a press conference on the sidelines of the NPC. Journalists for Japan’s leading economic newspaper Nikkei, who arrived at the announced venue two and a half hours before the scheduled start time, found at least a hundred reporters, mostly from international outlets, already in line. Wang did not disappoint. Conceding that there had been “some improvement” in Sino-American relations since Xi and US President Joe Biden met in San Francisco last year, he described America as a “paranoid superpower” and questioned its self-confidence. Wang said that the Biden administration’s adding companies to its sanctions list was an example of efforts to keep China at the low end of the value chain that would eventually backfire. Wang argued that sanctions on China have reached“bewildering absurdity.” Those who support Taiwanese independence—no names were mentioned, but obviously meaning the United States and Japan—were playing with fire and would get burned.
Wang also had a few choice words for Europe, where many countries have been critical of the PRC’s trade practices and human rights violations, while at the same time seeking to expand business ties. He compared Europe’s approach to a traffic light on which the red, yellow, and green lights were all lit up, asking “how can the car drive through?”
The foreign minister’s words on America’s lack of self-confidence notwithstanding, careful readers of the government’s work report might also question China’s self-confidence. According to Li, “the foundation for China’s sustained economic recovery and growth is not solid enough as evidenced by a lack of effective demand, overcapacity in some industries, low public expectations, and many lingering risks and hidden dangers. There are blockages in domestic economic flows, pressure on overall job creation, … structural employment problems, and fiscal difficulties at local levels,” the latter being an oblique reference to worrisome levels of local government debt. Within government, “formalities and bureaucratism remain acute … Some reform and development steps are not fully implemented. Some officials lack the readiness to get down to work, evade responsibilities, and do their work in a perfunctory way. Corruption remains a common problem in some sectors.” The lack of self-confidence also seemed to extend to the international environment: The word “security” was mentioned a record twenty-nine times in the report. The word “risk” also appeared twenty-four times, more often than in prior reports.
Also highlighted was China’s commitment to a “new type of international relations” stressing solidarity with the Global South and opposition to “all hegemonic, high-handed, and bullying acts.” These seem to indicate that China has implicitly given up on the developed world in favor of building a coalition to realize a world order organized and dominated by Xi’s China Dream to break out of encirclement and supply chains of the old order.
Mixed Messages from the Military
In contrast with the ambitious but probably unrealistic 5 percent plan for GDP growth, military spending is scheduled to increase by 7.2 percent, despite what Li described as a need for belt-tightening elsewhere. In previous years, one rationalization for growing defense budgets has been that it was needed to offset the costs of inflation, but over the past year, the economy has faced deflation. Another justification has been as a response to the international environment, which, since no country threatens the PRC, arouses concern among many foreign countries.
Recently, China unilaterally changed a flight path close to the median line of the Taiwan Strait thereby constricting Taiwan’s airspace, as well as sent ships and planes to harass the island, and deployed “research balloons” over it. The 2024 work report also dropped the word peaceful from its predecessor report’s mention of peaceful unification with Taiwan, a territory the PRC has never controlled. Chinese coast guard ships have blocked the Philippines from resupplying an island within its exclusive economic zone that China claims as its own. Other Chinese vessels continue to appear in Indonesia’s exclusive economic zone around the Natuna Islands. Chinese ships have created a new norm around the Japanese-administered Senkaku (Diaoyu in Chinese) islands that Beijing claims. Tokyo also worries that its constant military patrols in the Sea of Japan portends an intention to establish a submarine presence there. Xi has called for the military to prepare for “stormy seas” ahead while critics counter that it is China that is roiling the waters.
Still, despite steadily rising military expenditures and expanding capabilities on both quantitative and qualitative indices, all is not well in the Chinese military. In a discussion with the People’s Liberation Army delegation to the NPC, second-ranked vice-chair of the Central Military Commission General He Weidong vowed to crack down on what he called fake military capabilities. Although the general did not elaborate, People’s Liberation Army experts interpreted this as relating to the procurement of flawed equipment and to deception among the ranks during training. For example, fake drills that do not reach mandated standards such as conducting night exercises around sunset rather than in darkness.
There have been a number of purges in the Chinese military in recent months. Among the most salient have been the removal of Defense Minister Li Shangfu scarcely six months after he was appointed, as well as the dismissal of nine high-ranking People’s Liberation Army officers from the NPC. While no details on the causes for the removal have been released, most observers expect that they are connected to corruption. According to American intelligence, an internal Chinese investigation discovered missiles that had been filled with water rather than fuel. Depending on how widespread these problems are, missile operations could be compromised and China’s nuclear force readiness and overall capabilities called into question. To what extent the purges will affect the army’s combat capabilities is unknown. Still, the removals cannot be good for military morale.
Conclusions
Predictably, the Chinese media heaped praise on the meetings. Many promises were made with no specifics as to how they might be implemented and with what effects. Finding the optimum balance between stability, which Li described as of overall importance, and economic growth, which the Work Report states is also a priority, will not be easy. There are questions on whether the economy can thrive while controls over it and the people who create it increase. Stimulating the economy while dealing with local debt poses a different set of challenges. As a case in point, ten highly indebted provinces and two cities, many of the former in poorer areas that are far from the coast, have been ordered to curb infrastructure spending. Yet doing so will inevitably work against growth. In addition, it will exacerbate the already concerningly wide gap between richer and poorer areas that the party and government fear will stoke social instability.
There has been no explanation of how belt-tightening can be reconciled with ambitious plans to fund science and technology infrastructure and provide better health and elder care. Production of more goods for export permitted by massive government subsidies—electric cars, steel, aluminum, and even fast fashion—has allowed them to saturate global markets and hurt international competitors. There are concerns that Chinese attempts to unload its excess inventories at cut-rate prices will export its deflation to world markets. Existing trade restrictions from the affected countries will become more intense.
As Li said, China faces an increasingly challenging environment both domestically and internationally. The ambitious goals set forth in the work report await implementation. For American foreign policymakers and those who hope for solutions to recently contentious Sino-American relations the hope is that the Third Plenum that will tentatively be held this summer will provide solutions.
The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.
- About the author: June Teufel Dreyer, a Senior Fellow in the Asia Program at the Foreign Policy Research Institute, is Professor of Political Science at the University of Miami, Coral Gables, Florida
- Source: This article was published by FPRI
