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China New Policy Blueprint

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The annual meeting of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) – the so-called two sessions – are the most important political meeting of the year, when policies for the coming year are refined and locked into place. 
This year’s meetings were particularly important because they introduced the new five-year plan for 2021-25 and longer term vision for 2035, and put in place the first policies to meet the goals of those two plans.
 In addition, Chinese Communist Party officials used the occasion to trumpet the nation’s rise ahead of the party’s 100th anniversary in July this year. 
The meetings started with Premier Li Keqiang reading the annual work report, which describes the government’s activities in the past year and its plans for the coming year. 
On the last day of the week-long meetings, Li spent most of his time in his traditional press conference pledging further job creation and improvements in living standards ahead of the Communist Party’s 100th anniversary in July.
 He said he hoped US and Chinese officials would find some “common ground” in their talks in Alaska next week even if major disagreements remain, though US officials warned Beijing to brace for difficult discussions.
 Li also said Beijing was willing to talk to Taiwanese officials as long as they accepted there is one China. 
On Thursday, the NPC took its most controversial action, passing an election reform plan for Hong Kong that would ensure that “only patriots” could run the city government and establish “democracy with Hong Kong characteristics”. 
A Beijing official claimed there were patriots among Hong Kong opposition members. Amid criticism of Beijing’s move by the US and European Union, Hong Kong’s top official warned foreign governments not to meddle in China’s internal affairs. 
Beijing will use “legal combination punches” in overhauling Hong Kong’s legal system and is prepared to accept the pain to “fix” Hong Kong.  Vice-Premier Han Zheng said the reform was not aimed at eliminating opposition voices.
 The new slate of Beijing-backed Hong Kong leaders are under pressure to tackle the city’s housing crisis, a key cause of last year’s anti-government protests. And a sharp debate has started whether the electoral changes allow any chance for democracy in the future. 
On the economic front, the government set a modest growth target of “above 6 per cent” for this year, below expectations for actual growth of over 8 per cent, to give it room to address uncertainties in the economic outlook, trim the economic stimulus that Beijing introduced last year to combat the pandemic and reintroduced its deleveraging campaign to cut debt and financial risks. 
But it did not set a gross domestic product target for the new five-year plan to give itself flexibility to change course to meet new challenges during the period.
 The government also said it would pursue reform of the hukou household registration system to allow more migrant workers to become urban residents in an effort to boost growth. 
The government’s budget calls for an 8.6 per cent increase in military spending this year,  but the military’s second in command called for yet more spending to meet the challenge from the US. President Xi called on the People’s Liberation Army to be ready to fight at any time given an increasingly uncertain external environment. And the new five-year plan also pledged to improve benefits for military veterans. 
Beijing also rolled out policies to achieve Xi’s promise for the nation to be carbon neutral by 2060, including new emphasis on nuclear power and renewable energy sources. 
However, critics charged the policies outlined at the meetings did not go far enough. And heavy smog in Beijing during the meetings showcased the government’s difficult balancing act between industrial growth and environmental protection. 
The government set ambitious goals for developing new technology and promoting advanced manufacturing as part of its overall effort to reduce dependence on foreign sources and so increase national security. Seven key sectors would get more money for research and development. China will need to attract foreign tech talent to meet its goals, but Taiwan is already responding to an attempted brain drain. 
Use of blockchain technology will also play a major role in the nation’s development over the next five years. But the country’s former industry minister warned that China is still 30 years away from matching the industrial prowess of the US or Germany. While the government promised a level playing field for private and foreign firms, it also boosted support of state firms.
China’s Foreign Minister Wang Yi held a wide-ranging press conference during the two sessions, in which he warned the US from crossing the “red lines” on Taiwan and Hong Kong, called charges of genocide in Xinjiang “fake news,” said China and Russia should jointly oppose “colour revolutions,” promised that Beijing would live up to its word on the European Union investment treaty, reached out to Africa, Latin America and Southeast Asia in response to US efforts to build new alliances, and reached out to India and Japan ahead of the meeting of the Quad four nations.
 China’s foreign policy priorities are changing in a post-pandemic world. The two session’s focus on maritime law reflects its concerns about the South China Sea. The NPC also ratified the RCEP trade agreement ahead of schedule.

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