Two Sessions to Focus on Development Safety

[Ma Xuejing/China Daily]

Top legislature, advisory body will take stock of nation's top economic priorities

The two sessions, or the annual sittings of China's national legislature and the top political advisory body that will kick off this week, are expected to map out policy focuses for the world's second-largest economy.

Advancing both technological innovation and green development will likely figure among this year's priorities. The sittings may also highlight a relatively new policy priority－the safety of economic development, economists said.

The unstable global supply chain reeling from the economic impact of COVID-19 and the lingering tensions with the United States have outlined the pressing need for China to strengthen self-reliance in technology and supply chain safety, while the risk of asset bubbles and debt defaults has called for greater de-risking efforts, they said.

"The pandemic has threatened the stability of the global supply chain. It strengthened China's determination to accelerate innovation and safety in strategic technologies," said En Xuehai, group chief investment officer of asset allocation and retirement fund investment at China International Fund Management Co Ltd, or CIFM.

In the financial system, early signs of asset price bubbles emerged in the stock market and real estate in the first-tier cities. In addition, there was chance for potential debt defaults as the central bank is expected to gradually withdraw liquidity to normalize the monetary policy, he said.

"Policy de-risking is underway," En said. "Policymakers will be more concerned with the balance of growth and financial stability."

En also said that policies on intellectual property protection and strengthening the capital market's support for innovation will likely receive attention during the two sessions.

Iris Pang, chief China economist at Dutch bank ING, said technology tensions with the US are expected to pose a challenge to China's growth this year. The US may try to persuade its allies not to sell technology products and services to China. It may also seek to impress upon them not to use China's technologies, products and services.

The two sessions are, therefore, expected to focus on how to address this risk and put technology self-sufficiency on the most critical economic agenda, she said.

The Communist Party of China's central leadership has proposed to better coordinate development with safety in the 14th Five-Year Plan period (2021-25), according to a document released after the Fifth Plenary Session of the 19th CPC Central Committee.

The document said the country will strive to ensure that the development of key industries, infrastructure, strategic resources, and major science and technology are "secure and controllable", while safeguarding the bottom line of avoiding any systemic financial risks.