Breaking Down China’s 2023 Two Sessions: A Look at the Country’s Economic and Political Priorities

两会 (liǎng huì) – the annual “Two Sessions” meetings of the of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC) take place in early March. The meetings convene thousands of important Party members to discuss the State Council’s annual Government Work Report, which outlines major economic growth targets and guiding policies on socioeconomic development and foreign affairs. This time also coincides with voting on important legislative and structural reforms of the government.

The Two Sessions are a crucial annual event in China’s political calendar, and this year’s meetings held particular significance as the country continues to navigate its way through the post-COVID era. The gathering of thousands of delegates in Beijing saw discussions on a wide range of topics, from institutional reorganization and economic stability to national security challenges and foreign relations.

Institutional Reorganization

Since 1978, China has adjusted the structure of its government almost every five years. This cycle’s readjustments affirmed the importance of goals laid out previously by top leaders during the 20th Party Congress of October 2022.

The institutional reorganization announced in this year’s Two Sessions, focuses primarily on optimizing government management of the finance and technology sectors. Improving governance of financial stability, technological self-reliance and data security, have all been highlighted as key goals of the government over the past year. The changes include:

• The Ministry of Science and Technology (MoST) will be restructured to pass off many day-to-day advisory functions to other ministries, while prioritizing the strategic planning and promotion of nation-wide scientific and technological innovation.
• The National Data Bureau (NDB) will be created and placed under the guidance of the NDRC. It’s stated purpose is to coordinate all data resources and take charge of developing the “data economy.”
• A new National Financial Regulation Administration will be formed. This will replace the soon to be dissolved, China Banking and Insurance Regulatory Commission, and will oversee all aspects of the financial industry, excluding securities.
  The China Securities Regulatory Commission (CSRC) was upgraded – it will now sit directly under the State Council, enhancing its authority. It has also taken over responsibility for approving enterprise bonds from the National Development and Reform Commission (NDRC).

Eyeing Economic Stability

Economic stability is a core goal of 2023’s performance. Despite external economic challenges and a slow recovery after China’s economic headwinds due to COVID-19 prevention measures, the government will aim to boost consumption while steadily increasing business confidence.

Recent data from China’s National Bureau of Statistics suggests a real GDP growth of 3% for 2022. This year, much debate occurred amongst analysts if China would scrap the GDP growth targets or be even more ambitious in its target as it eyes economic recovery during the end of the COVID-19 era. However, the GDP growth target released is targeting 5% growth for 2023. This rather cautious target comes after China missed its target rate for the first time in 2022. It is an achievable goal as the economy readjusts and reopens to outsiders.

National Security Challenges Continue

In General Secretary Xi Jinping’s speech, he repeatedly emphasized the need for a calm and stable approach to counter the increasing global challenges facing China. The year to come in particular poses a unique challenge for China’s leadership, as they brace for more severe risks in their foreign relations. Newly promoted Foreign Minister Qin Gang went so far as to speak out against the US export controls trying to cut-off China’s supply chains and decouple in an attempt to contain China.

Despite these firm statements against the US, however, most mentions of safeguarding national security redirect the focus to domestic policies and programs. Increasing domestic scientific development while ensuring economic growth and stability are core to China’s national security strategy in the coming year.

Overall, this year’s Two Sessions highlighted China’s commitment to achieving sustainable economic growth, promoting technological innovation, and safeguarding its national security. With the country facing numerous challenges on the domestic and international fronts, it is clear that China’s leadership is focused on taking a strategic and proactive approach to meeting these challenges head-on.