The recipe for the new China: “buy cars and washing machines”

The National People's Congress is the most important public event in China's complex political architecture: it represents the moment in which the unicameral legislative body – in theory the supreme body of state power – expresses a judgment and votes on the government's actions central. But this does not mean that it is an institution free to express itself, because it is still subject to the sprawling control of the Chinese Communist Party, of which the leader Xi Jinping is a scrupulous censor.

Perhaps also for this reason, this year the three-day conference broke a tradition started by Li Peng in 1991: there was no press conference at the end of the assembly's work. The reason? Do not obscure the central role of President Xi, do not create possible moments of embarrassment regarding the data of an economy in evident crisis. But above all, not having to justify the most important announcement: that China, despite the crisis itself, “this year will grow by 5% of GDP”. Something which economists, starting with the Chinese themselves, strongly doubt. So much so that the work of the Congress and the related communications were prudently divided into two distinct areas: the chapter on economics and that on international politics.

China's economic strategy 2024

Even though Beijing claims that last year the economy grew by 5.2%, still a low level for China (accustomed to even double-digit growth), many analysts maintain that the real estimate of the increase in gross product national was less than a third of that value. «The idea of ​​5.2% or 5.5% growth is most likely wrong. It's more like 1% or 2%” is the opinion of Andrew Collier, CEO of the Chinese research firm Orient Capital Research. Interviewed by the BBC, he stated: “I believe that the next five or ten years will be very difficult.” And, like him, many others are convinced that the Chinese crisis – which became evident with the real estate collapse and the shock bankruptcy of the mega company Evergrande – is destined to last.

Whether this is true or not, without cross-examination it was easy for the Party spokesmen to release a statement in which, as regards the economic chapter, the growth objective that Beijing assures it will be able to achieve, precisely 5% of GDP, is stamped: «We believe in the economic rebound” was the only comment on the topic, and that was enough for the journalists subservient to the central power.

However, it must be said that, although the National People's Congress approves everything on which it is called upon to express its opinion by the central government, the vote remains secret and – at least this – guarantees a small dose of autonomy. Therefore, the approval margins must be looked at carefully, because the truth is hidden there: those numbers function (always) as a thermometer of the popularity of the decisions made by the leader. And the fact that Xi did not want a press conference, this Congress being a sort of test to measure Xi's hold on the party, says a lot about the tension that reigns in the halls of power.

That said, measures have also been announced to facilitate recovery from the pandemic, of which the crisis in the real estate sector remains the most difficult legacy to manage even today. But here too the numbers in the press release paint a picture that is probably much rosier than it actually is: Beijing says that jobs in urban areas will increase by 12 million. The country will invest in research on new technologies including artificial intelligence (where the gap with the United States remains in favor of the latter), and will strengthen the regulation of national financial markets. As? In the way most suited to the regime: earlier this month, so to speak, the head of China's stock market regulator was replaced ex abrupto, officially to stem the collapse of the $8 trillion stock market.

But government officials have also moved against traders, accused of increasingly betting against the shares of Chinese companies. So now there are new rules on the sale of shares, which regulate (and if necessary correct) the prices at the beginning and end of each trading day. Because in the capitalist system everything, ultimately, always depends on the trust of the markets. For this reason, “the message from political leaders continues to be that of restoring confidence and domestic demand”, as Catherine Yeung, analyst at the investment company Fidelity International, which manages assets of around 660 billion dollars worldwide, writes. .

The only objective on which we can bet right now that it will be achieved concerns the chapter relating to military defense spending, which will be increased by 7.2% also due to the pending issue of Taiwan: technology, heavy weapons, nuclear and space are the main items where Chinese investments will be concentrated.

The remodulation of foreign policy

As for international relations and disputes in the eastern seas, in this regard an unexpected conciliatory message arrived from the Congress, addressed to the United States: China intends to create “stable, solid and sustainable” bilateral relations, regardless of who will be the next tenant of the White House. Also because Beijing, grappling with the slowdown in productivity and the aging population, cannot really afford – at least not this year – to engage in geopolitical challenges with the Western superpower, despite Xi Jinping having promised to annex Taiwan by 2025 .

Also weighing on these considerations is the premature end of Xi's forbidden dream: the Belt and Road Initiative. The “New Silk Road” which intended to conquer the European market and open up Chinese trade to the West, was boycotted in tandem by the EU and the United States, also (not only) due to the aggressiveness with which Beijing pursued this objective . Therefore, it is time to reshape the approach in international relations and focus first on fixing the fundamentals at home.

Also at stake with the United States is the trade dispute connected to the return to America of large companies that once moved en masse to Asia. This policy of reshoring (“return home”) began in 2018 under the Trump presidency and then continued with the Biden administration. The beneficial effect of the return of industries and capital has relaunched domestic consumption and American GDP, creating millions more jobs for America (where unemployment is stable at a reassuring 3%), and equally creating unemployment youth in China which has skyrocketed in just five years. A possible second term for Trump could see this trend continue together with a probable worsening of tensions between Washington and Beijing, especially considering that Trump has already announced that he wants to impose new and higher duties on Chinese goods which, according to what he himself declared to the friendly network Fox Newsthey could even exceed 60%.

Therefore, what emerges from the National People's Congress is the photograph of a China which, after years of extraordinary results, is experiencing a moment of uncertainty both in its ambitions for growth and prosperity and in its ambitions of superpower and world leadership. Which, for better or worse, has one and only one person responsible: Xi Jinping.