This week, the party held the 2nd Plenum of it’s 20th Congress, to finalize all the decisions to be announced at the annual National People’s Congress session, beginning on Sunday. What we know, firstly, is that the NPC session takes place in the “post-COVID” period, which was partly the goal of the sudden Helter-skelter end to virus testing and lockdowns—get out out of the way before March. And secondly, it is clear that the 2nd Plenum agreed a bunch of important structural changes, particularly to the finance and sci-tech areas. We will have to wait for the NPC session announcement for the full details, but it looks like even further concentration of power at the very top. If that is how it plays out, we hope it works out well for China!
The economy is experiencing a post-COVID boost, and we’ll see how long it lasts. Permanent turnaround or a bounce that will fade? Time will tell. But the basic problems are all still there—debt mountains and property market woes, export uncertainties and consumer/investor caution. The NPC sessions will for sure be used to put a positive spin on economic prospects. Something else to watch for is whether there is any change of tone in terms of US-China relations. The NPC would be a good time to signal to the masses and the world that a more harmonious relationship is sought—if that is the plan. We will see. it takes two to tango, but a charm offensive from this side of the Pacific would help offset the position of the hawks on the other.
And with that, we bid you a pleasant weekend.