What to expect from this year’s Two Sessions

The spring of 2023 is a critical juncture for China, politically and economically. The season begins with the “Two Sessions” (两会 liǎnghuì), China’s largest annual political gathering, which starts this weekend in Beijing.

More than 3,000 delegates will attend meetings of China’s top legislature — the National People’s Congress (NPC) — and the country’s “top political advisory body” — the Chinese People’s Political Consultative Conference (CPPCC). The event will last a week or possibly a little longer — the closing date has not been announced.

In some way, the Two Sessions event is all about show: The ruling Communist Party holds plenary sessions twice a year (usually in February and October) and a Party Congress every five years, and it is these Party events where the real decisions are made. The Two Sessions conference is more public-facing. It highlights the role of the government rather than the Party, and allows for the communication of policies and personnel decisions to the public and the media. Government propaganda likes to portray the event as a parliamentary meeting with the trappings of democracy, and delegates often propose slightly controversial or even kooky new laws — this year, one representative plans to promote the idea of making every other Wednesday a day off work.

But the Two Sessions are also where key appointments are announced, and where the political tone for the rest of the year is set.

This year, it is likely that key positions in the State Council — which is roughly “China’s cabinet” — will be filled by Xí Jìnpíng 习近平 loyalists. State media has indicated that Lǐ Qiáng 李强 will be elevated to the role of premier. He will replace Lǐ Kèqiáng 李克强, who some say fell from grace after challenging some of Xi’s policies.

Furthermore, if Hé Lìfēng 何立峰 is confirmed as vice premier, as expected by many observers, it will mean another acolyte of Xi’s will hold an important position. A new finance minister and a new governor of the People’s Bank of China will also be appointed.

With fewer checks on power, Xi may lead China toward dictatorship

General Secretary Xi Jinping gave a speech to the Communist Party’s Central Committee on February 28 in which he promised that the Two Sessions would herald “rather intensive” (力度比较大) reforms that are “relatively wide-ranging” (涉及面比较广) and touch on “rather deep interests” (触及的利益比较深), and will “have an important impact on economic and social development.”

What most observers take this to mean is that Xi will further consolidate his already-tight grip on power.

Economist and journalist Lizzi Lee (of The China Project’s Live with Lizzi Lee interview show) is concerned about the emphasis on personal loyalty to the Party’s general secretary, especially as his term limit has now been extended indefinitely.

“I worry that with even fewer internal checks on Xi Jinping’s power, there will be a dangerous and haphazard approach to economic policy-making. We have seen this in recent years, with inconsistent regulatory crackdowns, ad hoc interventions, and a lack of transparency. Market confidence could be further eroded,” says Lee, who hosts the Live with Lizzi Lee video section of The China Project.

Scholar Rory Truex, an assistant professor at Princeton University’s Department of Politics and International Affairs, is also disquieted about the clique of “yes men” surrounding Xi Jinping, he told The China Project:

If you don’t have alternative power structures and power centers at the highest levels of the Party, it means that Xi will not hear critical voices. That leaves him free to take the country in any direction that he sees fit. We know where this can lead. Personal dictatorships can become really ugly, Máo Zédōng 毛泽东 being the archetypal example.

A loyal rubber stamp

“This year is the start of the 14th NPC, which means that there are many new people coming in, as well as some deputies who are returning,” explains Truex. “Usually, the first session of the NPC is taken up by personnel appointments. Deputies will also vote Xi Jinping to remain as president, Party general secretary, and military chief. This year, the meeting will be all about Xi and his third term. There’s an emphasis on remaining loyal to him personally.”

Truex characterizes the NPC as “a rubber stamp” institution: “Last year, when it came to voting, out of its 3,000 members, only a handful chose to abstain or vote against any proposals. So it will be interesting to see what votes look like this year,” says Truex, noting that some voting information remains secret.

Lizzi Lee notes that the NPC only votes in response to motions that have been carefully prepared in advance by the Politburo.

As part of a process known as a review, it usually praises the achievements of Xi Jinping. It is likely to gloss over a range of problems, some of which stem from the harsh COVID-zero pandemic response, a key policy of Xi Jinping’s that was lifted in late 2022.

China faces a struggle to kick-start the economy

Last year, China’s economy grew by just 3%, well below the official target of 5.5%. This year, the Two Sessions is expected to set a target for GDP growth of around 5%, with the possibility of a higher target of 5.5%, or even 6%.

“The higher they set it, the more bullish it is for markets, so it’s a key number to watch and they rarely miss it, although they did not hit the target in 2022,” Rory Green, the chief China economist at TS Lombard, told The China Project.

His company gathers independent data as part of its research into the real state of the Chinese economy. He says this process is essential because official figures could be manipulated by statisticians to ensure they meet the expectations of the Party’s leaders.

Green says the focus has now turned to domestic consumption to stimulate growth. “It will be the first time the Chinese consumer is expected to lead the economy out of a cyclical slowdown,” he says.

“The main strategy is passive pro-growth, with the government stepping out of the way and rolling back the negative stance around property, the internet, COVID, etc. It’s time to abandon policies that were hurting domestic confidence and stood in the way of recovery,” says Green.

But it’s an open question if this will be possible at the same time as Xi Jinping continues to increase his control of the party-state.

There will be a sweeping reform of national institutions

For Lizzi Lee, one of the most eagerly awaited political announcements at this year’s Two Sessions concerns the specifics of the institutional reform process on Party and state institutions (党和政府机构改革), the “intensive” and “wide-ranging” changes mentioned above.

Lee says there may be a further consolidation of governmental functions, including moving responsibility for police and security from the State Council to a new internal affairs apparatus, under the Party’s supervision. Additionally, the financial system and various ministries and departments responsible for China’s tech policies, as well the department for rural affairs, could also undergo a significant restructuring.

“Although the details remain unclear, it is evident that the general direction of reform is aimed at fully aligning institutions and personnel arrangements with Xi Jinping’s economic and political priorities,” says Lee.

Will there be protests?

Outside of China, some people are asking if the strong emphasis on discipline and centralized control reveals internal anxiety about the Party’s legitimacy, in the wake of last year’s protests against COVID lockdowns.

Rory Truex gave a cautious reply when asked about that idea by The China Project; “Loyalty is shorthand for discipline and a way for the regime to exert control from the top at times when it senses it may be in a little more danger than usual.”

But the process is not new. “Loyalty has been part of the ethos of the National People’s Congress for decades. In the wake of the Tiananmen Square protest, there was a reemphasis on loyalty because some of the deputies at that time actually appeared to be on the side with the student protesters. Also during the anti-corruption campaign, there was simultaneously an emphasis on anti-corruption and good governance, but also on loyalty to the Party,” notes Truex.

In his view, the Two Sessions amounts to “an exercise in political theater.” But he is curious to find out what happens outside the hall.

“Will anybody hang a banner saying ‘Down with Xi Jinping!’ over a bridge in Beijing? Will we get a little bit of pushback from the population again, some echoes of what happened just a few months ago? Or will it go as smoothly as the Party wants? I am looking to see what happens on the citizen side of things as well,” says Truex.