So the big annual Congress began this week, the new leadership lineup prepared to take over the wheelhouse, the helmsman was elected unanimously to a third term as president, and the retiring premier gave his last NPC speech in which he set the target for GDP growth at 5%, compared to 3% reported growth last year. The assumption is that the incredibly weak performance of China’s economy last year will provide a base from which it should be fairly easy to hit that target, but there is still the question of what will make up that growth, supply side boosts and infrastructure spending or real production and consumer spending. The indications are that with the property market still depressed, and China not desperately in need of new highways, there will be a significant growth in debt on top of an already substantial mountain in order to achieve that 5% target. There have been expressions of support for private enterprise, and there is no doubt that in order to address effectively the problem of unemployment, private enterprises need to be building and expanding their activities. But it is not clear to what extent private companies are going to feel confident enough about the future to answer the call, and there are anecdotal signs that perhaps they are currently more inclined to sit on the sidelines, or focus instead on finding ways of getting their money into bank accounts somewhere else. We will see. One can only hope that the economic buoyancy that is being felt in some sections of the economy will last and be widespread.
Another issue addressed in the early Congress speeches was China’s relationship with the United States, and the messaging here was robust. The US was mentioned by name, and was advised by the new foreign minister to step on the brakes or else risk conflict occurring. This was an opportunity to send a message suggesting the possibility of warm fuzziness, but that is not where they decided to go. The two big questions out there in terms of US-China relations are becoming more and more muddled and muddied all the time—how did the pandemic begin, and who started the ratcheting-up of tensions around the island. It is getting harder and harder to see the issues clearly, and it becomes ever more important to be wary of fake news and misleading information as different forces become ever more sophisticated in the use of information networks to confuse and obscure, deflect and distract. Read stuff with your mind switch in the ON position and the BS detection setting on HIGH.
Meanwhile, spring has sprung, and that makes people more optimistic. One hopes that the optimism is warranted.
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