Pro-growth
The National People’s Congress (NPC) will open its annual session on 5th March, where a new economic team is expected to be unveiled. The new team will likely be led by the incoming premier, Li Qiang. He will replace the current premier, Li Keqiang.
Here are a few insights:
New economic targets
Pro-business
Pro-technology
New economic targets
The session will provide a preview of the new team's economic targets, and its plan to reset the Chinese economy for the next five years.
With the COVID reopening, we expect a GDP target of close to 6% in 2023, compared to the previous GDP target of 5.5%. Unemployment and CPI inflation targets are expected to remain flat at around 5.5% and 3% respectively.
Pro-Business
China’s new economic team faces the daunting task of reviving the country’s economy after three years of slow pandemic growth. With the reopening of China, there is an urgent need to bring economic prosperity to the Chinese people to make up for the time lost.
Li Qiang is expected to pursue more pro-business measures to help boost the economy. Li has a strong track record of pro-business leadership, having served as the governor of Zhejiang and the party secretary of Shanghai.
Zhejiang, known for its private entrepreneurship, benefited greatly from Li’s policies. He pushed for a “negative list” entry requirement for the private sector and worked to open more sectors to private ownership. As a result, Zhejiang’s private sector flourished and became a key driver of the province’s economy.
During his tenure as the party secretary of Shanghai, Li was responsible for opening the STAR board at the Shanghai Exchange, aimed at attracting more innovative and high-tech firms. He also played a key role in bringing Tesla to build their gigafactory in Shanghai, a move that further boosted the city’s reputation as a hub for advanced manufacturing.
Li has a reputation for being a business pragmatist, with regular meetings with CEOs of both local and international corporates. His policies are expected to be more pro-business, which bodes well for the private sector in China.
Pro-technology
Li Qiang is unlikely to continue the ongoing regulatory clampdown on Chinese technology companies.
In 2014, Li Qiang was quoted with the saying “there should be more Alibabas’ and more Jack Mas", indicating his support for the growth of technology companies in China.
Already, Li Qiang could be working behind the scenes to ease restrictions on technology firms. China has allowed Ant Group to raise funds for its consumer finance unit and has allowed new user registrations of Didi to resume.
Since the regulatory crackdown, the founder of Alibaba, Jack Ma, has been relatively quiet. Now, he has resurfaced publicly, with vists to Japan, Hong Kong, Thailand, and Australia. His public appearances could be a sign that the regulatory environment for Chinese technology companies may be changing for the better.
In conclusion, as China's new economic team prepares to unveil its plan in the upcoming NPC, all eyes are on incoming premier Li Qiang. With a strong track record of pro-business policies, Li is expected to pursue measures that will help revive the Chinese economy and bring economic prosperity to the Chinese.
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