BEIJING — China’s new premier, the country’s No. 2 leader after Xi Jinping, promised on Monday that private-sector companies would be treated equally with state-owned ones and that the property rights and other interests of entrepreneurs would be strictly protected. He was attempting to restore confidence in the faltering economy.
Premier Li Qiang, who took office on Saturday, firmly praised the role of entrepreneurs following a decade in which the state and the ruling Communist Party had an ever-increasing role in China’s economy, with some pro-party critics criticizing large corporations. Consumers’ and companies’ low levels of confidence, spending, and investment have harmed the economy, which has slowed dramatically over the previous several years.
The Communist Party is under enormous pressure to revitalize the economy, which has been severely hampered by nearly three years of “zero Covid” regulations, including mass testing and quarantine. Protracted city lockdowns that restricted hundreds of millions of people to their homes hampered manufacturing operations and eroded consumer and company confidence.
Even though the government rescinded these pandemic regulations in December, many business owners remain hesitant to make fresh expenditures. Some have even fled the nation due to the deteriorating business climate.
In recent years, the state-run banking system has provided increasing loans to state-owned businesses. Several private real estate developers have been displaced by government-controlled construction firms. The Communist Party has demanded stronger participation in the decision-making process of private businesses. In addition, several municipal governments have compelled private businesses to make substantial “donations” or pay arbitrarily imposed penalties to assist fund the costs of social programs.
At his first press conference as premier on Monday, Mr. Li gave the most strong declaration on the need to protect the vibrancy of the private sector by a Chinese leader in years. He vowed an economic climate “in which firms of all forms of ownership would be treated equally, respecting the property rights and interests of entrepreneurs in accordance with the law and promoting fair competition among all sorts of corporate organizations.”
He provided no suggestions on how to stimulate the economy. He emphasized that even China’s 5-percent growth objective for this year, the lowest in decades, would not be simple to fulfill, especially at a time when many other nations are also facing serious economic issues.
Yet, he countered short-term growth fears by arguing for China’s sustained economic strength. He appeared to be alluding to Communist Party control when he added, “There is the vast size of its market, the diversity of its sectors, the abundance of its human resources, and the strength of its development foundation. But most importantly, we have obvious institutional advantages.”
Mr. Li’s words prompted a strong spike in Hong Kong share prices and a smaller but noteworthy boost in mainland China on Monday morning, as markets elsewhere in Asia declined due to concerns over government takeovers of two struggling U.S. banks.
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In contrast to his predecessor, Mr. Li is viewed as a staunch supporter of Mr. Xi, who has supervised the ever-increasing role of the Communist Party in daily life and who has tended to prioritize security above economic progress.
Mr. Xi made brief remarks before Mr. Li at the conclusion of the nine-day annual session of the National People’s Congress, China’s primarily ceremonial, Communist Party-controlled legislature. Mr. Xi did not discuss the nation’s economic difficulties, emphasizing instead the need for security and stability.
The disparity in tone and substance between the two men’s remarks suggested that Mr. Xi would delegate economic policy details to the premier, while Mr. Xi would play the role of the paternalistic Communist Party leader who provides security for the people but is not directly responsible for the month-to-month fluctuations of the economy.
Mr. Xi’s emphasis on national security has been used to justify more party participation in private enterprises’ activities, as well as intense pressure on businesses to work with the military under a so-called “civil-military fusion” strategy, which has alarmed many Chinese business executives. But, Mr. Xi reiterated his position that strengthening national security was entirely compatible with economic development.
Mr. Xi stated, “Security is the cornerstone of growth, and stability is a prerequisite for power and prosperity.”
Mr. Xi and Foreign Minister Qin Gang issued scathing accusations of the United States at the beginning of last week, accusing it of restricting China. Yet, when questioned about Sino-American ties on Monday, Mr. Li avoided geopolitical problems and direct criticism of the United States administration, opting instead to support free trade and business collaboration.
“Opening up to the outside world is our core national policy, and we will continue to pursue it regardless of how the international situation evolves,” he added.
Mr. Li even urged that Mr. Xi and President Biden follow through on the several agreements they established at their November meeting in Bali, Indonesia, before the launch of a Chinese surveillance balloon over the United States caused a further deterioration in bilateral ties.
At the conclusion of the yearly parliamentary session, the premier holds a press conference with international and local journalists as a sign of political responsibility. Nonetheless, the leadership checks questions in advance to ensure that no sensitive themes are brought up.
During the nine-day session, China’s leaders took many efforts to reassure businesses and investors. Mr. Xi, who has attempted to strengthen the party’s control over the economy and private corporations, told business executives that the party saw private companies as “one of us.”
In a move interpreted as signifying consistency, the party maintained the heads of the central bank, the Ministry of Commerce, and the Ministry of Finance, putting a stop to weeks of rumors that Mr. Xi would replace them with a new, probably less experienced generation of economic policy administrators.
Eswar Prasad, an economist at Cornell University, stated, “This slew of appointments seems to contradict, at least partially, the notion that proved loyalty to Xi Jinping will trump technical talent in giving top-level government jobs.”
Many indicators of economic revival have surfaced. According to surveys of purchasing managers, manufacturing activity rose significantly in February. In several Chinese cities, the subways, airports, and hotels are once again crowded.
Yet, the young unemployment rate remains elevated, and the property market is in a depression. China’s factories, which are the motor of its international commerce, are experiencing a decline in demand from the United States and Europe.
Construction, another pillar of the Chinese economy, has slowed as a result of a sluggish housing market downturn, which has hampered demand for steel, cement, and other commodities. China expects to issue a variety of January and February economic data on industrial production, real estate development, retail sales, and other topics on Wednesday.
Network Hype Team