A pragmatic work plan for China and beyond

By Ei Sun Oh Source:Global Times Published: 2020/5/24 18:24:47

Chinese Premier Li Keqiang delivers a government work report at the opening meeting of the third session of the 13th National People's Congress at the Great Hall of the People in Beijing, capital of China, May 22, 2020. Photo: Xinhua

The series of meetings for China's national legislature and political consultative body this year - known as two sessions - finally took place after an understandable delay of two months due to the COVID-19 epidemic. 

Even prior to the pandemic and lockdown measures were ensured globally, the world economy had already slowed down - it is now clearly decelerating.

China and its economy were no exceptions as victims of this global scourge. Yet China seems to have gradually emerged from the COVID-19 epidemic faster than many others. This is a tribute to its drastic but ultimately effective epidemiological control measures.

Whereas China is the second-largest economy in the world, the largest economy in the world, the US, is still mired in the pandemic with no short-term recovery in sight (for either the virus or economically). All eyes are on China. This is because in recent years China has become the de facto engine for economic growth for much of the world. 

By contrast, the US, though endowed with appreciable growth before the pandemic, has more or less retreated into protectionist indulgence. It is with these heavy-hearted backgrounds that many observers from both inside and outside China watch the country's latest two sessions with much anticipation. It is during these meetings that Chinese government typically rolls out its latest socioeconomic policies, many of which have profound international implications.

In particular, the Government Work Report delivered by Chinese Premier Li Keqiang on Friday was considered the centerpiece summarizing these policies. And this year "summarize" it certainly did.

The report was one of the most succinct in recent years, yet it still laid out the outlines of a comprehensive recovery plan that will affect both China and the world. The overall theme for this year's report could perhaps be distilled as "seeking progress amid stability."

By that Li meant stabilizing first and foremost jobs, improving the livelihood of the people, and promoting consumption, thereby getting the market to chug along. While these are tried and tested steps in pushing economic recovery in a market economy, albeit with Chinese characteristics, they nevertheless assure both domestic and foreign stakeholders that China remains steadfastly committed to its own avowed market-driven economic operations. This is something Li repeatedly spelled out in no uncertain terms. 

Some may ponder this year's conspicuously missing economic growth targets, which in past years encapsulated national economic goals. Li did not dodge the "missed" issue. Instead, he choose to address it head-on, explaining that it was unrealistic to set an overarching growth target amid global uncertainties brought about by the COVID-19 pandemic that is still ravaging a large part of the world. 

Li minced no words in revealing China's negative economic growth during the first quarter of 2020, which was a heavy but necessary price to pay for saving lives during the epidemic. Frankly, I think "missing" the target is a very pragmatic decision that should be considerably repeated even after the pandemic.  

Over the last few years, as China entered a "new normal" period under the prevailing global slowdown with growth figures no longer being double-digit, many friends both within and outside China have expressed their dismay and worry. I actually hold a very opposite view to this. As I have stated on numerous occasions, including in this paper, slower growth affords China much needed time and space to qualitatively improve its economy for greater heights to scale in longer terms. 

China no longer needs to remain fixated on chasing short-term quantitative targets at all costs. Lo and behold, within half a decade, such a "new normal" growth has, among others, prompted China to engage in more research and development. It now leads the world in 5G information technology, electronic commerce and artificial intelligence, which are all essential elements in the explosive growth of the not so distant future. 

"Missing" a rigid growth target, in my humble opinion, should henceforth be entrenched in favor of more versatile settings of mainly qualitative socioeconomic goal posts.

Li was equally blunt in outlining some of the socioeconomic challenges ahead. These include obstacles faced by small and medium-sized enterprises (SMEs), which in most countries provide the most number of jobs. He also addressed the 6 percent unemployment rate, and the continued bureaucratic mind-sets of some officials. His vows for China to be committed to supply-side reforms and poverty eradication efforts are reassuring. 

In fact, some of the specific fiscal and socioeconomic measures Li announced are very pragmatic models that both developed and developing countries should consider adopting as they embark upon the road to recovery after the pandemic. These include the issuance of bonds with proceeds going exclusively and directly for local development, broad-handed 50 percent cuts in non-essential public expenditures, tax deferrals (some until next year) for SMEs, as well as incentives for technical entrepreneur programs.  

For countries trading heavily with China or closely integrated with China's supply-chain locomotive, such as those in neighboring Southeast Asia, what we are most concerned with is of course even broader access to China's tremendous market and also the continuity of China's investments overseas. 

We breathed sighs of relief as Li promised the broadening of China's opening-up of its economy for foreign participation. This includes national treatments for foreign businesses, and increasing of export credits under the China-proposed Belt and Road Initiative, which remains a keystone of China's foreign policy. Indeed, China and Southeast Asia should redouble their joint efforts in promoting free trade, including concretely demonstrating their benefits on the road to recovery.

Toward the end of the report, Li emphasized the importance of improving public health capabilities and the safety and security of production, drawing from the lessons of the recent pandemic. These ring true to almost all countries around the world as we continue to battle against the coronavirus. Only when all of us work hard to ensure the fundamentals of preserving life can we attempt to reach the lofty goal of a community with shared future.

The author is senior fellow with Singapore Institute of International Affairs and principal adviser at Malaysia's Pacific Research Center. opinion@globaltimes.com.cn


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