Press conferences generate news because of what a prominent person has to say, particularly in response to journalists’ questions. In China, the questions themselves are revealing, since they are screened and only those that suit the interviewee get asked.
Last Friday, Premier Li Keqiang gave the annual press conference on the closing day of the National People’s Congress, China’s parliament.
The first question thrown at the premier was direct: “Are China’s economic problems bigger than previously thought?”
“It is true that China’s economy has encountered new downward pressure,” Li responded, acknowledging a downturn.
To deal with the economic slowdown, Li said, the government would make sharp cuts in corporate taxes and fees. It would deregulate while strengthening oversight. He ruled out “flooding the economy with liquidity” which, he said, could also lead to future problems.
Actually, the slowdown was already suggested in the government work report delivered by Li on March 5, the opening day, which said target growth in 2019 would be between 6 to 6.5 percent, lower than the target of 6.5 percent last year.
Chinese statistics have frequently been questioned and new research published by the Brookings Institution, a Washington think tank, suggests that China’s economy is around 12 percent smaller than official figures indicate, and that its real growth has been overstated by 2 percentage points annually in recent years. But a downturn is a downturn, whatever the actual figures.
A new foreign investment law was passed only an hour before the press conference, clearly a result of American pressure. Still, skeptics fear that the hurriedly drawn up provisions are too general and give the Chinese government too much implementation leeway.
Asked about this, Premier Li said the government would introduce regulations and directives to protect the interests of foreign investors “to see that this law will be truly operable”.
This is a law that China has been talking about for years as it negotiated bilateral investment agreements with various Western countries. This is a chance for China to reform its legislation and overcome the objections of local vested interests. Not getting it right would be a shame for all concerned.
Social stability was clearly on the premier’s mind as he dwelled on the need to provide jobs for those entering the market, both new graduates and migrants from the countryside.
On average, the premier said, 15 million people entered the job market each year, not counting several million rural migrant workers moving into the cities. This year, he said, “we are elevating the status of jobs-first policy to a macro policy”.
The stated goal this year, as in 2018, is to create 11 million urban jobs. In 2018, more than 13 million jobs were generated and the hope is that the same thing will happen this year.
This is a particularly sensitive year since it is the 30th anniversary of the Tiananmen Square uprising, led by university students. Getting jobs for the 8.34 million college graduates this year is therefore a high priority.
Foreign relations also came up in the press conference, though sensitive issues, such as the South China Sea, the detention of Uighurs in Xinjiang or the situation in Tibet were not raised.
On relations with the United States, the premier voiced confidence that the official relationship, which marks its 40th anniversary this year, will continue to forge ahead despite twists and turns. In fact, he said, the two economies have become so intertwined that it is not possible to decouple them.
Without mentioning Huawei, Li denied that the Chinese government might ask companies to “spy on other countries”. China doesn’t do it today and it won’t do so in the future, Li asserted.
Asked how the US-China trade war might affect relations with the European Union, Li said that China wouldn’t injure any third party in its dealings with the US. A growing China-EU relationship, he said, serves the interests of China, the EU and the world at large.
The premier said that next month he would be in Brussels for this year’s China-EU Summit. He said he hoped both sides would view the relationship from a strategic and long-term perspective.
Li may find that a tough sell. Only last week, the European Commission, the EU’s executive, released a paper that for the first time identified China as an “economic competitor” and “a systemic rival promoting alternative models of governance”.
Clearly, China has much more to worry about than its economy. For one thing, it urgently needs to create relationships of trust with its global partners, particularly with the developed countries of the West. Right now, all too often, it is doing the opposite.
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