China’s 14th National People’s Congress: Expected Outcomes and Some Surprises

The annual National People’s Congress (NPC) is one of China’s most important political events. Economic goals are presented, political figures are appointed and the state budget and new legislation are introduced. During this year’s NPC, amidst a tense international situation, Xi Jinping began his unprecedented third term as president – drawing special attention to the event as audiences around the world watched for insights into the general direction of Chinese politics in the coming years.

While the NPC gathers China’s national legislature, the highest organ of Chinese state power capable of changing the constitution, it is widely considered a ‘rubber stamp’ parliament.   Delegates approve policies that were mostly already decided upon within the highest ranks of the Communist Party.

While many appointments to key positions were expected, Xi defied some predictions with selections to top financial regulator posts. Increased military spending, goals for economic growth and plans to become self-sufficient were anticipated. However, changing rhetoric towards the West during the NPC potentially signifies a switch to a different relationship between China and the West.

The appointment of political figures and plans for government reform brought few surprises – further  tightening Xi’s grip on Chinese politics

Xi 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 in 2018, in which the limits of terms for presidents were removed.

As one of Xi’s closest allies and the Communist Party’s second-highest politician, Li Qiang became China’s 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.

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’s 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’s Politburo in October 2022.

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.

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 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.

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’s oversight of science and technology.

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.

As one of the final and anticipated developments on March 13, the last day of the NPC, changes to Legislation Law were approved. These allow the NPC’s 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.

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’s hands. The appointment of loyalists to key posts and reforms of government and legislation reflect increasing party control under Xi.

China aims to accelerate economic growth by “around 5%” in 2023, as expected

During the NPC, the Communist Party announced that reaching a growth target of “around 5%” will be a priority. The economic problems of 2022 and the missed 5.5% growth target have led to this year’s goal – maintaining credibility.

With the abrupt ending of the zero-COVID strategy in December 2022, the government’s economic strategy is increasing investments and domestic consumption. An IMF report shows that China does have the potential to get its economy back on track quickly, estimating its growth will reach 5.2% in 2023.

In an effort to bolster investor confidence, new Premier Li Qiang, widely perceived as pro-business, announced his aim of introducing a business-friendly environment and pledged support for private entrepreneurship.

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 to create about 12 million jobs in 2023, a slight increase from the goal of “over 11 million” in 2022.

An expected Increase in military spending and the appointment of Defense Minister

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.

Talking of “uncertainties” and “instabilities” throughout the conference, during his closing speech, Xi pledged to turn the Chinese military into a “great wall of steel,” hinting at rising tensions with the West. Developments in this area should also be viewed in relation to Xi’s stated aim of “national reunification” with Taiwan, which he plans to prioritize in the coming years.

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 in 2018 for engaging in transactions with individuals connected to the Russian defense and intelligence sector.

A severe change in rhetoric towards the U.S.

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.

In an NPC speech on March 6, Xi accused 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 “certain countries.” This change in discourse is a further indication of tensions between the U.S. and China.

About the author

Anneke Grosskreutz currently works as an intern for the Bertelsmann Stiftung, where she supports the Project “Sovereign Europe: Strategic Management of Global Interdependence”. She recently graduated from the University of Groningen, where she studied International Relations and International Organizations with a specialization in International Development Studies.

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