The 2016 National People's Congress in Review by Brunswick Go back »

2016-03-25 | Beijing

Brunswick has put together thoughts on this year’s National People’s Congress meeting which wrapped up last week.  The full report is available here. 

Some of the areas in this year’s report:

  • There was no significant change in policy direction.  The most important outcome was the release of the 13th Five-Year Plan which will guide development for the 2016-2020 period.
  • The authorities spelled out a desire to achieve growth and reform—including drastically reducing overcapacity—while ensuring stability and enduring minimal pain.  Achieving this holy trinity of growth, reform and stability simultaneously will be challenging. 
  • The state of the economy was one of the most critical issues discussed.  The government introduced a growth range for this year of 6.5% to 7% and a floor of 6.5% per annum through the 13th Five-Year Plan.  If the country succeeds in growing at this level through the 13th Five-Year Plan it will add more than the current economy of Germany to the global stage.
  • This year’s gathering diverged from protocol to include significant focus on President Xi Jinping.  This is not just a signal of Xi’s position at the helm of the Party, but importantly the increasingly visible role of the Party in the government process.
  • The anti-corruption drive will continue.  This stopped being a campaign long ago and is now part of the broader new normal environment.  Past behaviour that was regarded as the status quo is no longer tolerated, regardless of position or background.
  • Domestic objectives continue to trump foreign concerns and as a result the leadership team will remain strong advocates of domestic industry interests and protecting national security interests. 

The economic transition the country is going through is critical.  It is important for the global economy that China succeeds because in this interconnected global environment a failure will have broader implications. This report sets out in more detail what the outcome of the lianghui means for businesses operating in China. 

Source: Brunswick