March 18th, 2021
The National People’s Congress (usually abbreviated NPC), is the highest organ of state power and the national legislature of the People’s Republic of China. The NPC meets in full session for roughly two week each year and votes on important pieces of legislation. NPC annual meetings provide an opportunity for the officers of state to review past policies and to present future plan to the nation.
The 13th NPC of this year is due to define the next Five Year Plan (usually abbreviated FYP) in terms of goals to achieve economically but also socially. It was held from the 5th to the 11th of March
What does this 13th NPC include ?
1) Key social/economic targets
- Premier Li Keqiang announced China’s GDP target is back and is set at 6% minimum.
- The broader goal of this target is to get the “economy firmly back to pre-pandemic vibrancy” and especially focusing on the domestic market including a creation of at least 11 new urban jobs.
- Heavy emphasis on boosting China’s innovation and technology sector with a R&D spending target of at least 7% growth annually.
- Boosting eco-green tech companies through government subsidies with a target of peak emissions by 2030 and reach net-zero by 2060.
- Taxable threshold went from RMB 100k to RMB 150k for foreign companies
2) About China/Hong Kong relationship
- Premier Li Keqiang reaffirmed China trust towards Hong Kong for the next five years
- Hong Kong will remain China’s international finance centre and trade centre
- Hong Kong will stay an important logistics hub for China with more importations and exportations to go through HK
3) Foreign affairs
- China will prioritize the signing of an investment treaty with the EU (principle reached last December)
- Major project on the move for a China-Japan-South Korea free trade agreement
- Premier Li confirmed China would “actively consider” joining the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP) which is an 11 party mega-deal including many neighbors
- Premier Li also affirmed the willingness to boost trade ties “on the basis of mutual respect” on China-US relations
Business perspectives :
The economic outlook set by China at the 13th National People’s Congress is very positive with a focus on the innovation and technology sector as well as green tech. The tax breaks for foreign companies also demonstrate China’s willingness to welcome more FDI in order to boost its domestic market, one of Beijing’s priorities for the next 5 years.
