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'Two sessions' to look for further reform under new normal, experts

(Xinhua)

Updated: 2015-03-02 14:49:23

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WASHINGTON -?The much-anticipated annual parliamentary sessions of China, dubbed as "two sessions", is expected to lay a foundation for further reforms as the world's second-largest economy actively adapts to the "new normal" of slower growth but higher quality economy, experts say.

As the annual sessions of the National People's Congress (NPC), the top legislature, and the Chinese People's Political Consultative Conference (CPPCC), the top political advisory body, will kick off Tuesday, China's economic policy and implementation of the reform agenda is watched closely by experts from around the world.

This year is "particularly important" because it marks the final year of China's twelfth five-year plan, Scott Kennedy, deputy director of the Freeman Chair in China Studies at the Center for Strategic and International Studies, a U.S. think tank, told Xinhua.

"They (Chinese policymakers) need to come to sum some conclusions about how successful the twelfth five-year plan has been and think about the goals of the thirteenth five-year plan, which will be published next spring when they hold the Fourth Plenum of the NPC," Kennedy added.

As a leading expert on Chinese business and political economy, Kennedy said he usually looks at four things during the "two sessions" to grasp a general picture of China's political and economic landscape - the personnel, general discussions about the economic policy, proposals being considered by the NPC and foreign policies.

The focus would be on economic policies whereas there would be no major changes in other three areas, Kennedy said. "I expect this NPC meeting to focus on the efforts to bring the debt problem under control, and lay the foundation for additional reforms, and encouragement for pushing reforms out this year to have implemented," he said.

Kennedy believed China will stick to the reform agenda although the country's economic growth rate fell to a 24-year low of 7.4 percent last year. "I think the government's primary focus is implementing economic reforms, not just simply making people feel less pessimistic in the short term. If you overstep addressing the growth concerns now, that makes it harder for general economic reforms."

"I also hope that the government moves more quickly to implement important reforms," David Dollar, a senior fellow at the Brookings Institution, another U.S. think tank, told Xinhua. "The moves in 2014 to simplify business registration have helped. These could be complemented by efforts to open up the service sectors to international trade and investment."

Dollar said he didn't expect Chinese government to announce a new big stimulus program at the upcoming "two sessions", because "that would spur investment and create more problems of debt and over-capacity".

The Chinese leadership has pinned much hope on more decisive reforms to counter the downward pressure on its economy, which is transitioning to a "new normal" of slower growth but higher quality.

"I don't think we'll see a high economic growth rate this year. We're seeing estimates between 6.5 percent and 7.3 percent. I think that's probably a reasonable range," Kennedy said of China's economic growth forecast.

Saying farewell to the "old normal" of over three decades of miraculous double-digit growth, experts still believe that China will continue to function as a vital ballast for the world economy.

"Even with lower economic growth, China will be such a profound presence that it's hard to imagine some degree of change that really undermines their centrality in the global economic future," Jonathan Pollack, a senior fellow at the Brookings Institution, told Xinhua.

Looking back at last year's reforms, Kennedy said one of the challenges is that there were so many to do, and Chinese policymakers had a hard time prioritizing them. "They have done a little bit of everything."

Kennedy said he expected China to take the local government financing reform as the top priority this year if policymakers want to really focus on one of the reforms compared with others.

In terms of his personal impression of China's "two sessions", Kennedy said it does reflect some amount of engagement with broader Chinese society, and it's a useful exercise to force the government to go through the process. "It's a good measuring stick. You can see the votes by members for different reports to go up and down."

"It does provide some barometer on the performance of the government. But it could become much more influential if they could meet more often and reform other elements of the NPC system, and its relations with the State Council and the party," he said.

 
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