China pushes for self-sufficiency at the Two Sessions

Politics & Current Affairs

Chinese leaders are proposing all sorts of strategies to bring Xi’s self-sufficiency drive to life, including a sweeping overhaul of key ministries.

Illustration by Derek Zheng for The China Project

China’s key annual political gathering, known as the “Two Sessions,” are well underway in Beijing for the first time since the country emerged from COVID zero, and as Xí Jìnpíng 习近平 solidifies his power for his third five-year term.

Thousands of officials belonging to the country’s nominal legislature, the National People’s Congress (NPC), as well as the Chinese People’s Political Consultative Conference (CPPCC), have gathered to discuss how China will deal with the growing number of geopolitical risks and a slowing economy in the coming year.

Yesterday, Xi called to “more quickly” build up China’s military and to enhance “integrated national strategies and strategic capabilities” to a room full of the People’s Liberation Army and the People’s Armed Police Force delegates at the ongoing 14th National People’s Congress. He also stressed more self-reliance in strategic fields, such as supply chains and science and technology, to make them “more capable of safeguarding national security.”

Xi’s speech expands on earlier announcements for China to achieve a 5% GDP growth target, its lowest in more than three decades, and to boost its defense expenditure by 7.2% in 2023.

A ministerial makeover for China’s State Council

Two days earlier, China announced a sweeping bureaucratic makeover with the aim of making the country more self-reliant and resilient. As part of a broader effort to reform the State Council, the country’s cabinet, Beijing proposed plans to set up a new financial regulatory commission, restructure the science and technology ministry, and create a department to oversee China’s mass amounts of data. The proposals have been submitted to China’s national legislature for review.

“China’s domestic economy was stable, and the political situation was under control, but the Chinese leadership now has to decide how far they can promise prosperity and growth to the people, which was a legitimate ground for CPC,” Ritu Agarwal, an associate professor for Chinese studies at Jawaharlal Nehru University, told The China Project. “So a domestic-driven consumer economy, with a focus on self reliance, has been proposed by the leadership.”

China will create a national financial regulatory administration, consolidating responsibilities to “better manage risks” in the financial system and strengthen the supervision of “institutions, behaviors, and functions,” the government proposal said per CNN.

China will also establish a National Data Bureau to strengthen the management of the country’s troves of data, as well as reorganize the Ministry of Science and Technology to integrate education and research with practical applications.

The overhaul comes as Western allies shore up efforts to curb the development of China’s semiconductor industry. Today, Beijing “made démarches” to the Netherlands over the Hague’s new export restrictions for the “most advanced” semiconductor technologies, including some cutting-edge tools made by Dutch chipmaking giant ASML. They are the first public details about an earlier deal Japan and the Netherlands struck with the U.S. to limit such sales to China.

The West wind blows

Many of the new policies and regulations that are being rolled out at the Two Sessions this week are being perceived as strategies to counter U.S. moves against Beijing.

“China is facing lots of backlash in the West,” Agarwal told The China Project. “So how far China is able to project itself as a great power vis-à-vis the United States is going to be the main political agenda for the present leadership in the coming years or so.”

Two days ago, Xi directly accused the U.S. of having “contained, encircled, and suppressed China,” according to state news agency Xinhua, as Beijing continues to harden its stance against Washington. China’s foreign minister, Qín Gāng 秦刚, also warned that “if the U.S. doesn’t hit the brakes and continues to barrel down the wrong track…there will surely be conflict and confrontation.”

“Xi’s reaction to China’s current predicament in the world today is fully understandable. He is China’s top leader, of course, and his chief global priorities are to defend China and strengthen its status and stance in the world, especially in reaction to the aggressive negative posture toward his country taken by the U.S.,” Dorothy Solinger, a professor emerita of Chinese politics at the University of California, Irvine, told The China Project.

Nadya Yeh