EXPERT ADVISORY

China’s National People’s Congress meeting took place this week amid a range of unprecedented challenges. Experts from University of Michigan are available to discuss.

Ji Yeon (Jean) Hong is an associate professor of political science and the Korea Foundation Professor of Korean Studies. Her research focuses on the political economy of authoritarianism, with particular attention to East Asia. She has various ongoing research projects related to the legacy of the authoritarian past, the long-term impact of political violence, and the determinants of elite behavior and government policies under authoritarianism.

“Although China’s economy is facing significant challenges, I don’t think the Chinese government’s No.1 priority is economic growth,” she said. “Instead, considerable emphasis is likely to be placed on maintaining social and political stability.

“Even if stimulus packages emerge from the National People’s Congress, I’m not convinced they’ll make much of a dent. Consumer confidence in China is quite low at the moment—people just aren’t buying houses or thinking about having kids as much. Additionally, a significant portion of the youth population is pessimistic about the future as they face difficulties finding a satisfactory job. And on top of all that, local governments are deep in debt, and they can’t count on the real estate market to bring in revenue like before.”

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Mary Gallagher is the Amy and Alan Lowenstein Professor of Democracy, Democratization, and Human Rights and director of the International Institute. She is an expert in Chinese politics, law and society, and labor politics.

“The emphasis on high-quality growth at the recently convened NPC and the decision to stick to the same growth target of ‘about 5%’ indicates that China’s leaders haven’t fundamentally changed their approach to economic policy,” she said. “The emphasis on ‘high quality’ will mean that regional governments will attempt to create or finance projects that appear to be innovative or technologically intensive.

“There are three problems with this approach: 1) It doesn’t shift the Chinese economy toward consumption or domestic demand, in fact it leaves households out of the equation with most government money going to enterprises yet again. Xi Jinping’s Common Prosperity remains focused on production not consumption; 2) Investment boosts to manufacturing will exacerbate excess capacity, which will need to be exported abroad to the consternation of China’s trading partners, especially in Europe and North America; and 3) Local governments will pursue the same type of ‘high quality’ industries, so redundancy and inefficiency in China’s domestic economy will remain. Less developed regions that should pursue labor-intensive and less technologically intensive industry might be caught in a development model that doesn’t fit their local conditions and does little to boost employment.

“With no Third Plenum yet announced (the plenum that should announce new economic policy), China’s leaders seem stuck to their old development model of investment-dependent growth, production over consumption, and interregional competition to motivate local officials to meet the center’s targets.”

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Ann Chih Lin is an associate professor of public policy at the Ford School of Public Policy and director of the Lieberthal-Rogel Center for Chinese Studies.

“Compared to previous years, China’s Two Sessions meetings this year look inward, focusing on China’s domestic concerns more than its outward image,” she said. “After a year characterized by economic difficulties and the disappearance and replacement of multiple high-level officials, the message is that there’s work to do at home.”

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