The two sessions are almost over, and what an amazing event it has been. The consolidation and centralization of power in Beijing, in the party and in the hands of one man. Consolidation and centralization with what aim? To fend off the problems faced in the coming years, is the answer.
What are the biggest problems? It’s hard to say what they are referring to, but the world and China are never as stable as they appear. The China-US trade stand-off is an example of that, and the bounce in China’s economic growth in the first couple of months of the year on the back of soaring exports indicates exports are still a key part of the mix, and therefore a fall in exports as a result of a trade war or a global recession is a potential threat.
But the bigger issue, maybe, is the middle-income trap and the possibility that China misses the cut. If so, how does that play out for Chinese society with expectations of continually rising prosperity? Maybe this is a part of what is driving them.
Regardless, this is the single most important development in the history of China since 1978, with perhaps one exception. The short-term consequences are likely to be greater focus, less confusion, more progress in certain areas of the economy and policy. As to the longer-term consequences, who are we to speculate?
But bottom line: this Double Session passed all expectations in terms of the breadth and depth of decisions announced, and the reflection of the determination of the people behind these changes to hold the line. Have a good weekend.