CHINA WILL MAINTAIN A STEADY COURSE IN A CHALLENGING TIME

William Jones

China's 2022 governmentwork report sets the growthtarget for the coming year at5.5 percent， a modest growthfor China compared with lastyear’s 8.1 percent， but not abad prediction consideringthe stormy weather awaitingthe world in the course of this year.The repercussions of the massivesanctions on Russia have alreadyaffected oil and gas prices on theinternational market， and they arealso being felt in the increase of theprice of agricultural products likewheat and soybeans. With its recentintroduction of the “dual circulation”model， relying more on domesticconsumption than external trade topropel the economy， China is in amuch better position to weather pricefluctuations on the world market.

China has also succeeded betterthan other countries in recoveringfrom COVID-19. While there is amajor outbreak of the latest Omicron variant occurring in Hong Kong atthe moment， the combined resources of the nation are being devoted toovercoming that crisis as they werefor the pandemic on the mainland.As a result of the strict measures putinto place almost from the beginning of the pandemic， the Chineseeconomy was able to recover morequickly than any other country andbegin recovery early， as witnessedby the high growth figures from lastyear as well as the creation of over 12 million urban jobs during that sameperiod.

Thanks to its unique system ofgovernance， up until now Chinahas also been less affected by theinflation that is beginning to be feltby many countries， with the CPI inChina rising only 0.9 percent lastyear. This year’s target will keep CPI at around 3 percent， a none-too-shoddy result in a world in which prices may soar. At the same time， Li Keqiangwas also clear that the way aheadwould not be easy. “A comprehensive analysis of evolving dynamics athome and abroad indicates that ourcountry will encounter many morerisks and challenges， and we mustkeep pushing to overcome them，” he said.

Nevertheless， China has a gooddeal of leeway in pursuing its goalseven in this difficult internationalenvironment. Most importantly，the country will move forwardin protecting the food supply byensuring that domestic productionis free from price fluctuations onthe international markets. They will also continue the rural revitalization program， working to prevent anyone from falling back into poverty.

The country will make a concerted effort to stay on the cutting edge ofscience and technology， an important element in the innovation-ledeconomic growth program， and astrong defense against the measuresimposed by the U.S. government tocut China off from the U.S. marketin high-tech goods. Li Keqiang alsoannounced that China will openup more to foreign investment andassured foreign investors that theycan operate from a level playing field. “We will encourage foreign-investedenterprises to move into a broaderrange of sectors， and support moreforeign investment in medium- andhigh-end manufacturing， R&D， andmodern services， as well as in thecentral， western and northeasternregions，” Li said. “We will improve services for promoting foreigninvestment and accelerate thelaunching of major foreign-funded projects.”

China will also move forward with high-quality cooperation in the Beltand Road Initiative. “We will， on thebasis of consolidating cooperationon enhancing connectivity， movesteadily to open up new areas ofcooperation，” Li said. “New land-seatransit routes for the western region will be further developed. We willcarry out outbound investment andinternational cooperation in a well-regulated way， and effectively guardagainst overseas risks.”

Meanwhile， China plans to provide additional funding to promotemicro， small and medium-sizedenterprises’ development and apackage of tax cuts and fee waiversfor these enterprises to allow themto continue smooth operations inan uncertain environment. Therewill be continued emphasis onissues related to people’s livelihood，including social welfare， medicalinsurance， education， and childsupport.

While the Chinese ship of statewill be traversing choppy waters inthe coming year， it is clear from the government work report that thereis a firm hand on the ship’s rudderwhich will maintain a steady course whatever heavy winds may come its way.