By Shujie Yao.

Carefully reading different commentaries and various official documents, it is possible to identify the top policy priorities of China’s new generation leadership. In particular, stability and people’s livelihoods have been mentioned directly and indirectly as the most important policy issues of concern.

The ‘two meetings’, or Lianghui (两会), referring to the 12th National People’s Congress (NPC) and the 12th National People’s Political Consultative Conference (NPPCC), are being held in Beijing from 3-18 March 2013 to officially rubber stamp the key appointments of China’s top leaders for the State Council, the NPC and the NPPCC, pre-determined by the 2nd Meeting of the 18th Congress of the Chinese Communist Party Central Committee held in the last week of February 2013.

It looks certain that Zhang Dejiang (张德江) will take over from Wu Bangguo (吴邦国) as the chairman of the NPC. Li Keqiang (李克强) will replace Wen Jiabao (温家宝) as the Premier, and Yu Zhengsheng (俞正声) will take over from Jia Qinglin (贾庆林) as the Chairman of the NPPCC. Along with the Party General Secretary, Xi Jingpin (习近平), these four men will be the most powerful decision makers in China.

The other three top political leaders are Wang Qishan (王岐山), Secretary of the Party’s Disciplinary and Inspection Committee, Wang Yunshan (王云山) who will be in charge of the Party’s propaganda machine and Zhang Gaoli (张高丽) who is likely to become the first Deputy Premier to help Li Keqiang run the State Council.

One important question that people frequently ask is what will be the fundamental difference between the new and the out-going leadership?

In my view, they are fundamentally the same kind of people; conservative and careful in the sense of keeping a tight control by the Party over the management and development of the country. What may make them different is that they have already experienced, and will continue to face, different economic, social and political situations.

For the out-going leadership, fast economic growth was the overwhelming policy objective. Despite a global financial crisis and the fact that many major industrialised economies were enduring close to zero or negative growth, China’s GDP in nominal terms almost doubled from 27 trillion RMB to 52 trillion RBM in five years from 2007 to 2012. Over the same period, state central revenues rose from 5.1 trillion RMB to 11.7 trillion RMB, urban employment rose by 59 million people, urban and rural per capita disposal income rose on average by 8.8% and 9.9% per year in real terms. Grain production reached a historical high of 597 million tons in 2012, over 20,000 kilometres of railways including 9000 high-speed railways and 40,000 kilometres of motorways were constructed, and the share of urban population rose from 46% to 53%.

However, fast economic expansion has created many economic, social and environmental problems. Income inequality continues to rise, pollution has reached crisis levels and corruption is found everywhere in society. Other domestic challenges include low energy efficiency, state monopolies, asset bubbles and a lack of technological progress and innovation. Externally, China experienced a significant slowdown in its export growth and inflow of foreign capital in 2012. As a result, the dependence on an export push and investment for fast economic growth is not sustainable and attention should focus more on stimulating domestic consumption.

Facing such a comprehensive set of external and internal challenges, the new leaders have to adopt very different development strategies from those implemented by their predecessors. Consequently, the word ‘stability’ emerges as the first practical tactic of development.

Stability in the Chinese context means that high growth will not be the top priority of economic development. Hence, ‘fast growth’ will be replaced by ‘stable growth’. Significantly, the growth target for 2013 will be 7.5%, the lowest in more than a decade.

Stability also has another meaning in China. It implies social and political stability, suggesting that fighting corruption and structural reform will be carried out proactively and rigorously, but not to the point where the country’s social and political stability could be threatened.

This is partly reflected by Wang Qishan’s recent comment about fighting corruption. Wang pointed out that the current anti-corruption method was a temporary solution used to gain time to figure out the root of the problem. It implies that a large scale anti-corruption campaign is unlikely to take place immediately, as the state and the party need time to work out the potential impact of a large campaign on social and political stability. Of course, he may also imply that prosecuting corrupt officials is a necessary but not a sufficient condition to successfully contain corruption in China today.

References to people’s livelihood can also be found in various party and official government documents and comments by various top leaders of the new generation. The Communique of the 18th CCP Congress’ 2nd Meeting was the first time that the Party mentioned ‘Five Constructions’, i.e., the construction of politics, economics, society, culture and ecology at the same time. In the past, only politics and economics were frequently mentioned, and ecology was barely heard of.

Ecological construction is a comprehensive issue, involving environmental protection, sustainable growth, climate change and energy efficiency, and the like. All of these issues are related to people’s wellbeing.

After over three decades of fast growth, people’s incomes and living standards have improved remarkably. However, income inequality has reached a crisis point which could potential trigger massive and destructive uprisings. It has been reported that the number of mass demonstrations rose from 80,000 to 200,000 per year in the last decade. Environmental pollution is increasingly serious, threatening the basic health of people. 10 years ago, three quarter of a million people died prematurely because of air pollution: this figure has now reached three million.

Food safety is another important concern for the people. During the Lianghui, the Hong Kong authorities started to impose severe penalties on people buying more than two tins of milk powder passing through the Hong Kong-Mainland border. In the first two days of the new regulation, over 50 people were detained by the Hong Kong border police.

The spokesman of the 12th NPPCC was reported to have said that 99% of the milk powder produced in mainland China was safe in response to a question raised by a journalist about the Hong Kong milk powder buying restriction policy. This spokesman was heavily criticised by numerous netizens for telling people lies and giving false information about China’s food safety problem.

People’s livelihood is multi-tiered and multi-dimensional, including basic necessities for survival, social equality and justice, safety, and political freedom. To meet these requirements, the country still needs a rather high, say 6% or more, and steady level of growth to sustain a stable and peaceful society, and to bring China onto a much higher level of development in the coming decade.

Shujie Yao is Professor of Economics and Chinese Sustainable Development and Head of the School of Contemporary Chinese Studies, University of Nottingham. He is author of China and the World Economy.


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