China Shakes Up Government, Lashes Out at US: NPC Update

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(Bloomberg) -- China is setting up an enlarged national financial regulatory authority and a bureau to oversee vast quantities of data, under a broad shake-up plan unveiled at the National People’s Congress — the annual parliamentary gathering. The move is widely seen as an effort to further consolidate President Xi Jinping’s hold over the world’s second-largest economy.

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In a rare direct criticism of one of the nation’s biggest trading partners, Xi said China is grappling with containment by western countries led by the US and will seek to overcome that with the help of the private sector. He stressed the importance of the sector to the economy and urged companies to play a bigger role in establishing technological independence.

Meanwhile, at his first media briefing as China’s foreign minister on Tuesday, Qin Gang warned that soaring US-China tensions risk blowing past any guardrails in the relationship, showing that divisions between the two countries are becoming more entrenched.

What to Know:

  • Click to view full text of government reorganization plan in Chinese

  • Click here to read more on this year’s NPC, which ends on March 13

  • What to watch out for this year (video)

  • A QuickTake explainer on the NPC

  • Insights on incoming officials, NPC delegates

Key Upcoming Events:

Key NPC/CPPCC events that have been announced so far include:

  • March 10: The country’s president and vice president will be decided. Xi is expected to get a norm-busting third term as China’s president

  • March 11-12: Delegates will decide on the country’s next premier and ministers, including central bank governor. Li Qiang is expected to replace Li Keqiang as the new premier when the decision is announced on March 11. Vice premiers and state councilors will be appointed on March 12 along with ministers and the PBOC governor

  • March 13 — NPC closing session. New premier’s press conference likely to follow

Latest developments: (Time-stamps are local time in Beijing):

China Minister Vows to Tackle ‘Grey Rhinos’ (5:42 p.m.)

China will prevent and defuse “grey rhino” risks in the property sector with more targeted measures, Ni Hong, Minister of Housing and Urban-Rural Development, said during a group interview.

China will support both state-owned and private property companies that are of high quality with equal treatment, help shore up their balance sheets, and meet their reasonable financing needs. Ni also said he is “full of confidence” that there will be a property market rebound this year after seeing positive signs in market supply and demand as well as expectations.

Job Cuts at Central Government (4:57 p.m.)

China will cut the number of positions at central government departments by 5% in the biggest government shakeup in decades.

Those jobs will be redistributed in strategically important areas, according to a government reform plan unveiled at the annual National People’s Congress meeting Tuesday.

China Creates Agency to Oversee Data (4:50 p.m.)

China will set up a new bureau to oversee the vast quantities of data generated across the country, part of a government overhaul expected to consolidate President Xi Jinping’s hold over the world’s second-biggest economy.

The bureau will be responsible for managing data resources in all respects as well as planning and building a digital society, according to a State Council reform plan submitted to the annual session of the National People’s Congress.

Enlarged Financial Regulatory Authority (4:47 p.m.)

China is setting up an enlarged national financial regulatory authority, in a move to strengthen the Communist Party’s leadership in its $60 trillion financial system and keep risks in check.

The new regulator will absorb its banking and insurance watchdog and oversee all financial sectors except the securities industry, according to a plan announced at the National People’s Congress Tuesday. It will also take over the functions including investor protection and oversight of financial holding companies from the central bank as well as the nation’s securities regulator.

The China Banking and Insurance Regulatory Commission will cease to exist after the overhaul, while the China Securities Regulatory Commission will become a government agency directly under the State Council, according to the plan.

Qin Warns US Risks Catastrophe With Push to ‘Contain’ Beijing (11:07 a.m.)

China’s new foreign minister warned that soaring US-China tensions risk blowing past any guardrails in the relationship, showing that divisions between the world’s biggest economies are becoming more entrenched.

“The US claims that it seeks to outcompete China but does not seek conflict,” Foreign Minister Qin Gang said Tuesday at his first news briefing since taking office late last year. “Yet in reality, its so-called competition aims to contain and suppress China in all respects and get the two countries locked in a zero-sum game.”

Washington’s approach toward Beijing “is a reckless gamble with the stakes being the fundamental interests of the two peoples and even the future of humanity,” he added.

What Seating Says About Power Around Xi (5 a.m.)

Where you sit can often tell your status in the office hierarchy. It’s no different at the National People’s Congress, where Xi Jinping’s allies are all crammed around the Chinese leader.

When the country’s rubber-stamp legislature kicked off its annual session on Sunday, the cavernous Great Hall of the People at Tiananmen Square was packed with the country’s political elites. Only the rostrum is slightly more crowded this year, as the ongoing congress will ring out the old guard and bring in a new slate of senior leaders packed with loyalists to Xi.

China May Exceed GDP Target, Ex-PBOC Official Says (1:49 p.m. Monday)

Chances are high China’s government will meet or exceed its relatively modest economic growth target for this year, a former central bank official said, with a more stable property market helping to underpin the recovery.

The gross domestic product growth goal of around 5% — released by the government on Sunday — “is a relatively prudent, pragmatic target,” Sheng Songcheng, the former head of the statistics and analysis department at the People’s Bank of China, said in an interview.

It gives the government more “leeway,” he said, adding that a much higher goal would hamper China’s efforts to keep inflation at 3% or below.

UBS Upgrades China’s Growth Forecast (11:11 a.m. Monday)

UBS Group AG raised its forecast for China’s economic growth for this year and next, citing a stronger-than-expected recovery after Covid restrictions were dropped and an expected boost to consumer confidence.

Gross domestic product is now projected to expand 5.4% in 2023, up from an earlier estimate of 4.9%, UBS economists including Wang Tao wrote in a note Monday. The economic re-opening is proceeding better than forecast, with a second wave of Covid infections not materializing and little sign of supply disruption, they said. The housing market is also recovering.

China Says Consumption Is Rebounding (11:02 a.m. Monday)

Chinese consumption in travel, dining and retail sales is rebounding from the Spring Festival holiday in late January, and growth will likely pick up gradually in the first half, Li Chunlin, vice head of the National Development and Reform Commission, the country’s economic planning agency, said at a briefing.

China’s GDP growth target of about 5% is in line with the nation’s current growth momentum, another vice head Zhao Chenxin said.

No Blue Skies in Beijing as Smog Hangs Over Landmark Meeting (11:08 a.m. Monday)

In a sharp departure from the blue skies that typically glisten for Beijing’s landmark events, the start of this year’s parliamentary session has been marked by smog, with the annual meeting suffering its worst air quality in at least a decade.

Levels of small particulates in the air jumped to 182 micrograms per cubic meter on Sunday as the National People’s Congress got underway, according to monitoring by the US Embassy. That’s well into the range considered unhealthy by medical experts and compares with an average level of less than 30 last year. The smog is palpable in the city of more than 20 million people, reducing visibility and causing people to cancel outdoor activities.

Auto Executive Urges Further Support of NEVs (9 a.m. Monday)

China needs a series of supportive measures to boost the country’s new energy vehicle industry, including a reform of the current consumption tax system on gasoline automobiles, the Securities Times reported, citing Zhu Huarong, chairman of Chongqing Changan Automobile and an NPC delegate.

Zhu’s proposals include ensuring healthy and coordinated development of NEVs, promoting data sharing of smart vehicles, reforming the consumption tax of gasoline vehicles, building a fair and reasonable industry standards for smart vehicles, and encouraging the purchase of NEVs by the public sector.

Xi Says China to Boost High-End Manufacturing (8:11 a.m. Monday)

China will take “forceful” measures to support the development of high-end manufacturing industry, Xinhua reported, citing President Xi Jinping’s comment at a meeting with delegates from Jiangsu province.

Xi also talked about “high-quality development” in the country, CCTV reported Sunday night. That involves enhancing self-reliance in technology, fostering small and medium-sized enterprises, and building globally influential centers for innovation. The Chinese leader also addressed the need to ensure a stable supply of grain and other key produce, and to expand channels for farmers to make money.

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