Xi urges China to advance tech self-reliance, Taiwan unification, Nikkei Asia, Mar. 13, 2023.
CK TAN, Nikkei staff writer
New Premier Li Qiang bats off concerns about weakening growth
Chinese President Xi Jinping called on the country Monday to accelerate self-reliance capabilities in technology and innovation-driven development, and vowed to "unswervingly advance the process of reunification" with democratically ruled Taiwan.
Xi was addressing the closing ceremony of the National People's Congress (NPC), which gave him an unprecedented third term.
"I will faithfully carry out the duties entrusted by the constitution," Xi told some 3,000 delegates in Beijing.
Referring to tensions with the U.S. and other democracies, he said, "China should work to achieve greater self-reliance and strength in science and technology, promote industrial transformation."
As in his reappointment speech five years ago, Xi warned against any secessionist attempts and opposed external interference amid reports of Taiwan President Tsai Ing-wen's planned meeting with U.S. House Speaker Kevin McCarthy next month.
China, which has not ruled out taking control of Taiwan by force, staged war exercises near the island last year after a visit by McCarthy's predecessor, Nancy Pelosi.
"It is necessary to ... enhance the ability to maintain national security," Xi said, advocating the modernization of the country's armed forces.
Xi's inner circle is now wholly stacked with loyalists.
During the weekend, Li Qiang, the former boss of Shanghai, was named China's premier, putting him in charge of steering a post-pandemic economic recovery as the country's second-in-command.
As premier, Li's chief task will be steering the domestic economy. He faces a daunting challenge in restoring growth and market confidence after China's gross domestic product expanded by 3% in 2022, among the slowest rates of growth in decades and well short of the official 5.5% target, largely due to COVID-19 lockdowns and a property sector downturn.
During a news briefing, Li batted off concerns about weakening growth now that China's population is in decline. He also defended China's abrupt halt of its zero-COVID policy last year.
Li said it would be "no easy" task to reach the official GDP growth target for 2023 of around 5%, that doing so would require a doubling of efforts.
Touting the country's economies of scale and rich supply of manpower as strengths, the new premier outlined the government's strategy. "We will introduce a series of policy combinations to expand demand," he said, "both domestic and external, as well as investment, and policies for advancing innovation and reforms."
China's socioeconomic challenges include high youth unemployment and a population that recorded the biggest drop last year since 1961.
Some 11.5 million college graduates are due to hit the job market this year, more than last year's record of 10.8 million. The jobless rate of youths between ages 18 and 24 was 16.7% at the end of 2022, compared to the national average of 5.5%.
Like other nations facing similar demographic challenges, the fall in population will add a burden onto people caring for children and elderly parents, as well as diminish the demographic dividend that helped fueled economic growth.
"China's demographic dividend has not disappeared. Our talent dividend is in the making and will be a driving force for the country to remain strong and robust," said Li, pointing to a figure of 240 million highly educated people.
Li also dispelled concerns about Hong Kong's weakening competitive edge as a global financial hub after the enactment of the national security law in 2020 that tightened Beijing's grip over the city.
"I am confident with the strong backing of the motherland, Hong Kong will only strengthen its position and role," the former Shanghai leader said.
Addressing China's ongoing dispute with the U.S., Li condemned calls by Washington for decoupling, highlighting the record-high bilateral trade in 2022.
"China and the U.S. can and must cooperate," Li said during the nearly 90-minute briefing. "Encirclement and suppression are in no one's interest."
Yue Su, principal economist at the Economist Intelligence Unit said that Li devoted the most of his time to promoting the private economy and building service-oriented government, indicating that these two aspects would be the focus of his work.
"Li Qiang mentioned a couple of times his experience in rural areas and grassroots government, which also means that despite his lack of work experience at the central, he will pay more attention to policy implementation and stay connected to the local governments," Su said. "This is overall good news, but also reflects Li Qiang's priority will be to make China's current development model more efficient rather than pursuing a completely different approach."
In a surprise move on Sunday, China kept central bank Gov. Yi Gang and Finance Minister Liu Kun alongside a slate of trusted lieutenants.
As part of sweeping reforms, the central bank will be brought under the umbrella of the newly created National Financial Regulatory Administration. The agency will have a broader role than its predecessor, the China Banking and Insurance Regulatory Commission.
For the defense portfolio, the NPC tapped Li Shangfu, replacing Wei Fenghe. Li is on the U.S. Treasury sanctions list for his role in making military purchases from Russia.