The appointment of political figures and plans for government reform brought few surprises – further \u00a0tightening Xi\u2019s grip on Chinese politics <\/strong><\/h2>\nXi was widely expected to continue as Chinese president after being confirmed for an unprecedented third term as General Secretary of the Communist Party at the Communist Party Congress in October 2022. His appointment comes after a constitutional change<\/a> in 2018, in which the limits of terms for presidents were removed.<\/p>\nAs one of Xi\u2019s closest allies and the Communist Party\u2019s second-highest politician, Li Qiang became China\u2019s new Premier, taking over the post from Li Keqiang. This was predicted to happen as Li Qiang had already been appointed to the second-highest position on the Politburo Standing Committee. He is the first Premier since the founding of the PRC to have never served in the central government to gain experience before becoming Premier.<\/p>\n
Li Qiang, known for his strict handling of the lockdowns in Shanghai in 2022, is taking over responsibilities that have been diluted under Xi. He will oversee the country\u2019s economic policy as head of the State Council, coordinating ministries and the Central Bank. Further, He Lifeng is taking over the role of Vice Premier. The economist and bureaucrat with close ties to Xi also joined the Communist Party\u2019s Politburo in October 2022.<\/p>\n
As anticipated, the nearly 3,000 delegates to the NPC approved a significant reorganization of government ministries, voting in favour of institutional reforms in the financial sector, science and technology, and data management.<\/p>\n
A new national financial regulatory administration was established, bringing supervision of the sector under one body directly under the State Council. While this leads to further centralization of power, Xi defied some expectations in the financial sector as he opted for stability<\/a> among the top regulators. He kept Central Bank governor Yi Gang in place and retained the finance and commerce ministers, which can be seen as a measure to reassure market confidence in parallel to his reform plans.<\/p>\nThe Science and Technology Ministry will be restructured to channel more resources into achieving breakthroughs and, thus, further self-reliance. It will be supervised by the Central Science and Technology Commission, a newly created Communist Party body, further deepening the party\u2019s oversight of science and technology.<\/p>\n
Lastly, a new data bureau will be created, responsible for sharing and developing data resources and coordinating the digital economy. It will be supervised by the National Development and Reform Commission and was created to take care of data collection and data transfers that could create risks for national security.<\/p>\n
As one of the final and anticipated developments on March 13, the last day of the NPC, changes to Legislation Law<\/a> were approved. These allow the NPC\u2019s Standing Committee to pass emergency legislation after just one review session, as opposed to the former general rule that legislation had to be reviewed at least three times.<\/p>\nSince Xi took power in 2012, he has created numerous central party committees to supervise ministries. They mostly report directly to the president and increasingly concentrate power in Xi\u2019s hands. The appointment of loyalists to key posts and reforms of government and legislation reflect increasing party control under Xi.<\/p>\n
China aims to accelerate economic growth by \u201caround 5%\u201d in 2023, as expected<\/strong><\/h2>\nDuring the NPC, the Communist Party announced that reaching a growth target of \u201caround 5%<\/a>\u201d will be a priority. The economic problems of 2022 and the missed 5.5% growth target have led to this year\u2019s goal – maintaining credibility.<\/p>\nWith the abrupt ending of the zero-COVID strategy<\/a> in December 2022, the government\u2019s economic strategy is increasing investments and domestic consumption. An IMF report<\/a> shows that China does have the potential to get its economy back on track quickly, estimating its growth will reach 5.2% in 2023.<\/p>\nIn an effort to bolster investor confidence, new Premier Li Qiang, widely perceived as pro-business, announced<\/a> his aim of introducing a business-friendly environment and pledged support for private entrepreneurship.<\/p>\nAnother big concern discussed during the NPC was the high rate of youth unemployment. With a peak of 19.9% in July 2022, it continues to be high. To tackle it, China aims<\/a> to create about 12 million jobs in 2023, a slight increase from the goal of \u201cover 11 million\u201d in 2022.<\/p>\n![\"China\u2019s](\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2023\/03\/Figure-1-Chinas-monthly-surveyed-Youth-Unemployment-Rate-from-December-2020-until-December-2022.png\" "\\"China\u2019s")
<\/a>Figure 1: China\u2019s monthly surveyed Youth Unemployment Rate from December 2020 until December 2022. Source: China: monthly surveyed youth unemployment rate 2022 | Statista<\/a><\/figcaption><\/figure>\nAn expected Increase in military spending and the appointment of Defense Minister <\/strong><\/h2>\nChinese leadership announced an increase in military spending by 7% in 2023 as a continuation of the steady increase in the last few years. The stated goal is to further military preparedness for potential future conflicts by strengthening national defense.<\/p>\n
Talking of \u201cuncertainties\u201d and \u201cinstabilities\u201d throughout the conference, during his closing speech<\/a>, Xi pledged to turn the Chinese military into a \u201cgreat wall of steel,\u201d hinting at rising tensions with the West. Developments in this area should also be viewed in relation to Xi\u2019s stated aim<\/a> of \u201cnational reunification\u201d with Taiwan, which he plans to prioritize in the coming years.<\/p>\n![\"China\u2019s](\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2023\/03\/Figure-2-Chinas-official-Defense-Budget-as-announced-and-announced-Growth-Rate-from-2013-until-2023.png\" "\\"China\u2019s")
<\/a>Figure 2: China\u2019s official Defense Budget (as announced) and announced Growth Rate from 2013 until 2023. Source: What Does China Really Spend on its Military? (csis.org)<\/a><\/figcaption><\/figure>\nIn a related development, Li Shangfu was appointed as the new Defense Minister. Li is already a member of the Central Military Commission and takes over a widely symbolic position. He was targeted by U.S. sanctions<\/a> in 2018 for engaging in transactions with individuals connected to the Russian defense and intelligence sector.<\/p>\nA severe change in rhetoric towards the U.S. <\/strong><\/h2>\nSymbolizing a break from the more careful rhetoric towards the U.S. in the past, Chinese politicians have started to criticize the U.S. directly and publicly. While the new Premier Li Qiang has used a more cooperative tone so far, calling for mutual efforts in U.S.-China relations on the last day of the NPC, Xi and Foreign Minister Qin Gang addressed and criticized the US directly.<\/p>\n
In an NPC speech on March 6, Xi accused<\/a> the U.S. of leading a campaign of Western countries against China and following a policy of containment towards it. In the past, high-ranking politicians preferred to keep their messages vague, speaking, for instance of \u201ccertain countries.\u201d This change in discourse is a further indication of tensions between the U.S. and China.<\/p>\nAbout the author<\/strong><\/p>\nAnneke Grosskreutz currently works as an intern for the Bertelsmann Stiftung, where she supports the Project \u201cSovereign Europe: Strategic Management of Global Interdependence\u201d. She recently graduated from the University of Groningen, where she studied International Relations and International Organizations with a specialization in International Development Studies.<\/p>\n
Read More on the Evolving Role of China in Global Affairs<\/strong><\/p>\nA Gloomy Outlook for EU-China Relations: Divergence, Distancing, Decoupling<\/a><\/p>\nThe war against Ukraine \u2013 5 take-aways for China and their implications for the EU \u2013 Takeaways 4 and 5<\/a><\/p>\n
As one of Xi\u2019s closest allies and the Communist Party\u2019s second-highest politician, Li Qiang became China\u2019s new Premier, taking over the post from Li Keqiang. This was predicted to happen as Li Qiang had already been appointed to the second-highest position on the Politburo Standing Committee. He is the first Premier since the founding of the PRC to have never served in the central government to gain experience before becoming Premier.<\/p>\n
Li Qiang, known for his strict handling of the lockdowns in Shanghai in 2022, is taking over responsibilities that have been diluted under Xi. He will oversee the country\u2019s economic policy as head of the State Council, coordinating ministries and the Central Bank. Further, He Lifeng is taking over the role of Vice Premier. The economist and bureaucrat with close ties to Xi also joined the Communist Party\u2019s Politburo in October 2022.<\/p>\n
As anticipated, the nearly 3,000 delegates to the NPC approved a significant reorganization of government ministries, voting in favour of institutional reforms in the financial sector, science and technology, and data management.<\/p>\n
A new national financial regulatory administration was established, bringing supervision of the sector under one body directly under the State Council. While this leads to further centralization of power, Xi defied some expectations in the financial sector as he opted for stability<\/a> among the top regulators. He kept Central Bank governor Yi Gang in place and retained the finance and commerce ministers, which can be seen as a measure to reassure market confidence in parallel to his reform plans.<\/p>\n The Science and Technology Ministry will be restructured to channel more resources into achieving breakthroughs and, thus, further self-reliance. It will be supervised by the Central Science and Technology Commission, a newly created Communist Party body, further deepening the party\u2019s oversight of science and technology.<\/p>\n Lastly, a new data bureau will be created, responsible for sharing and developing data resources and coordinating the digital economy. It will be supervised by the National Development and Reform Commission and was created to take care of data collection and data transfers that could create risks for national security.<\/p>\n As one of the final and anticipated developments on March 13, the last day of the NPC, changes to Legislation Law<\/a> were approved. These allow the NPC\u2019s Standing Committee to pass emergency legislation after just one review session, as opposed to the former general rule that legislation had to be reviewed at least three times.<\/p>\n Since Xi took power in 2012, he has created numerous central party committees to supervise ministries. They mostly report directly to the president and increasingly concentrate power in Xi\u2019s hands. The appointment of loyalists to key posts and reforms of government and legislation reflect increasing party control under Xi.<\/p>\n During the NPC, the Communist Party announced that reaching a growth target of \u201caround 5%<\/a>\u201d will be a priority. The economic problems of 2022 and the missed 5.5% growth target have led to this year\u2019s goal – maintaining credibility.<\/p>\n With the abrupt ending of the zero-COVID strategy<\/a> in December 2022, the government\u2019s economic strategy is increasing investments and domestic consumption. An IMF report<\/a> shows that China does have the potential to get its economy back on track quickly, estimating its growth will reach 5.2% in 2023.<\/p>\n In an effort to bolster investor confidence, new Premier Li Qiang, widely perceived as pro-business, announced<\/a> his aim of introducing a business-friendly environment and pledged support for private entrepreneurship.<\/p>\n Another big concern discussed during the NPC was the high rate of youth unemployment. With a peak of 19.9% in July 2022, it continues to be high. To tackle it, China aims<\/a> to create about 12 million jobs in 2023, a slight increase from the goal of \u201cover 11 million\u201d in 2022.<\/p>\n Chinese leadership announced an increase in military spending by 7% in 2023 as a continuation of the steady increase in the last few years. The stated goal is to further military preparedness for potential future conflicts by strengthening national defense.<\/p>\n Talking of \u201cuncertainties\u201d and \u201cinstabilities\u201d throughout the conference, during his closing speech<\/a>, Xi pledged to turn the Chinese military into a \u201cgreat wall of steel,\u201d hinting at rising tensions with the West. Developments in this area should also be viewed in relation to Xi\u2019s stated aim<\/a> of \u201cnational reunification\u201d with Taiwan, which he plans to prioritize in the coming years.<\/p>\n In a related development, Li Shangfu was appointed as the new Defense Minister. Li is already a member of the Central Military Commission and takes over a widely symbolic position. He was targeted by U.S. sanctions<\/a> in 2018 for engaging in transactions with individuals connected to the Russian defense and intelligence sector.<\/p>\n Symbolizing a break from the more careful rhetoric towards the U.S. in the past, Chinese politicians have started to criticize the U.S. directly and publicly. While the new Premier Li Qiang has used a more cooperative tone so far, calling for mutual efforts in U.S.-China relations on the last day of the NPC, Xi and Foreign Minister Qin Gang addressed and criticized the US directly.<\/p>\n In an NPC speech on March 6, Xi accused<\/a> the U.S. of leading a campaign of Western countries against China and following a policy of containment towards it. In the past, high-ranking politicians preferred to keep their messages vague, speaking, for instance of \u201ccertain countries.\u201d This change in discourse is a further indication of tensions between the U.S. and China.<\/p>\n About the author<\/strong><\/p>\n Anneke Grosskreutz currently works as an intern for the Bertelsmann Stiftung, where she supports the Project \u201cSovereign Europe: Strategic Management of Global Interdependence\u201d. She recently graduated from the University of Groningen, where she studied International Relations and International Organizations with a specialization in International Development Studies.<\/p>\n Read More on the Evolving Role of China in Global Affairs<\/strong><\/p>\n A Gloomy Outlook for EU-China Relations: Divergence, Distancing, Decoupling<\/a><\/p>\n The war against Ukraine \u2013 5 take-aways for China and their implications for the EU \u2013 Takeaways 4 and 5<\/a><\/p>\nChina aims to accelerate economic growth by \u201caround 5%\u201d in 2023, as expected<\/strong><\/h2>\n
<\/a>An expected Increase in military spending and the appointment of Defense Minister <\/strong><\/h2>\n
<\/a>A severe change in rhetoric towards the U.S. <\/strong><\/h2>\n