5 Takeaways From China’s Two Sessions Meeting
China’s annual landmark political event, the Two Sessions, or Lianghui 两会, — in reference to the two meetings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) — took place between March 4-11. More than 5,000 of the mainland’s political, business, and social elite gathered at the event in Beijing.
One of the main objectives was to confirm and release the Government Work Report (GWR), which includes the anticipated GDP growth target. This year, the target (around 5.5 percent) was confirmed by Chinese Premier Li Keqiang during the opening forum of the fifth session of the 13th NPC on March 5. Although below last year’s 8.1 percent — owing to the Russian war against Ukraine, ongoing pandemic concerns, and mounting domestic pressure — the number was still higher than anticipated. For example, economists at Goldman Sachs believe the percentage growth will be around 4.5 percent.
The GWR also set economic and social development goals for 2022, such as creating more than 11 million new urban jobs, keeping Consumer Price Index growth at around 3 percent, and decreasing the deficit-to-GDP ratio from 3.2 to 2.8 percent. (“Stable growth” has been emphasized as a key word for the year.)
Additionally, policy priorities were discussed at the event. Here, Jing Daily identifies five takeaways from the Two Sessions and how they might impact on luxury.
In August 2021, the news of President Xi Jinping’s “common prosperity” agenda sent luxury stocks tumbling. During the Two Sessions, the topic was brought up again and offered reassurances for luxury players.
According to Zhou Dewen, an economist and deputy director of the Central Economic Committee for Democratic Progress, to promote “common prosperity” is by no means to engage in “egalitarianism” or equal wealth distribution. Rather, the idea is that universal prosperity entails a certain degree of wealth gap.
In light of this, luxury’s opportunities may be in the lower-tier cities. The country is aiming to improve income in remote and rural areas among low income groups: to expand middle income, as well as improve taxation — adjusting excessive earnings and prohibiting illicit incomes. Lastly, the promotion of philanthropy was proposed as a top priority.
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