‘Two sessions’: China scraps a decades-long political tradition as Xi tightens control amid economic woes

Thousands of delegates from across China are gathering in Beijing this week for the start of the country’s most prominent annual political event, where leaders will signal how they plan to steer the world’s second largest economy in the year ahead — and try to dispel deepening concern about the challenges it faces.

Projecting confidence is likely to be high on the agenda for Chinese leader Xi Jinping and his top Communist Party officials during the days-long, highly choreographed event, known as the “two sessions,” when China’s rubber stamp legislature and top advisory body convene.

The largely ceremonial gathering is taking on heightened importance this year as China’s economy has been roiled by a property sector crisis, hefty local government debt, deflation, a stock market rout and tech friction with the US — all fueling questions about whether the country will lose steam before it reaches its goal of becoming a developed global power.

It also will include a significant break with precedent: the scrapping of a closing press conference with China’s premier, a political tradition that has featured in the gathering for three decades – at a times providing a rare window into the thinking of China’s number two leader, who is nominally in charge of the economy.

The press conference would also not take place for the rest of the current five year political cycle “unless there are very special circumstances,” spokesperson Lou Qinjian told reporters in Beijing Monday ahead of the legislative meeting’s opening day, citing other interview opportunities for media throughout the event. This year’s legislative gathering will also last just seven days, a shorter format than was typical prior to the pandemic.

The changes are likely to add to broader concerns about transparency around China’s policymaking and further dim the premier’s profile, which had already been impacted by Xi’s hardline control over all policy areas, including the economy. Under Xi, the premier and the State Council, which functions as China’s cabinet, have been increasingly sidelined.

“By design, they only want one voice — from the (Communist) Party. They don’t want other voices to dilute the voice of the party, which is controlled by Xi,” said Alfred Wu, an associate professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy.

That also means Xi is heavily under the spotlight as economic pain has sparked growing frustration within China. The gathering comes one year after he began a norm-shattering third term as president, having consolidated power atop the party and stacked its leadership with a raft of officials who appeared to be selected for their loyalty as much as experience.

A year later — as an expected post-Covid recovery has yet to fully materialize, young people struggle to find jobs, investors grapple with market losses and small business owners fight to stay afloat — skepticism has been rising about the direction charted by the leader and his new team. Xi has also overseen a political shakeup in his own ranks, further marring the start of the new term.

Those challenges may not pose a threat to Xi, who is China’s most powerful and authoritative leader in decades. But how his team addresses those concerns will have implications not only for the future of China and its 1.4 billion people, but the global economy at large — and Xi’s top officials are likely stepping into the meeting feeling that pressure.

Policymakers, investors and business owners in capitals across the world will also be watching closely, especially in a year when America’s presidential election could further strain the relationship between the world’s two largest economies.

“The government wants to use this platform to send signals that China’s economy in general is okay and is on the right trajectory,” said Chen Gang, a senior research fellow at the National University of Singapore’s East Asian Institute.

“Now there are a lot of doubts and suspicions about the capacity of the new administration … (so) they want to showcase that this government, the new administration led by (Xi’s number two) Premier Li Qiang, is capable of handling economic issues,” he said.

Delegates converge

The gathering, which takes place in Beijing’s cavernous Great Hall of the People, is the only time each year that the nearly 3,000-person legislature, the National People’s Congress, meets in person.

The body has little power to chart the course ahead for the country, as major policy direction is set by the party, whose elite members make decisions in closed-door meetings throughout the year.

But the two sessions provide an important platform for China’s notoriously opaque government to broadcast its strategy for economic, social and foreign policies and announce key indicators including China’s economic growth target, its budget deficit limit and military spending for the coming year.

It’s also an opportunity for elite leaders to hear from delegates, who hail from across the country and different social sectors — though the space for such exchanges at the gathering and in general has shrunk as Xi has tightened ideological control and overseen a drive to crush views that deviate from the Communist Party line.

Such controls have also appeared in recent debate about the economy, with some prominent economic analysts subjected to social media restrictions that seem designed to restrict their ability to speak out.

“The regime often utilizes the annual conference to secure support from Chinese society and bolster confidence in the market,” said Xuezhi Guo, a professor of political science at Guilford College in the US.

Now “this is particularly crucial given challenges like China’s real estate downturn, stock market crisis, high unemployment, and weakened demand,” he said.

Observers will be parsing how leaders discuss or comment on key issues like China’s position on the self-governing island of Taiwan, its relations with the US and bid to strengthen innovation as Washington bolsters tech export controls.

“It is conceivable that Xi may adopt a more conciliatory stance towards the US, temporarily shelving the confrontational ‘wolf warrior diplomacy,’ and redirecting efforts towards supporting both the bureaucracy and technocrats to ensure stability in China’s economy,” said Guo.

Such a tone shift could also be signaled by the appointment of a new foreign minister at this year’s gathering – something analysts ahead of the gathering said could happen in the coming days, though an agenda of the event announced Monday did not mention personnel changes.

The role has been filled, in what many expected to be a temporary capacity, by senior diplomat and former Foreign Minister Wang Yi since July, when his newly appointed successor Qin Gang was ousted without explanation after disappearing from public view.

That dramatic moment was followed just weeks later by the disappearance and subsequent removal and replacement of another of Xi’s hand-picked, third-term officials: then Defense Minister Li Shangfu. Again, it was done without explanation alongside an anti-corruption drive and apparent purge within China’s military.

While analysts said the surprise shake-up wasn’t a threat to Xi’s iron-clad grip on power, it did raise questions about his judgment, with lingering vacancies from those removals still a reminder of that.

Besides the foreign minister role, two high-ranking posts in China’s cabinet previously occupied by Li and Qin also remain open.

Economic challenges

Signs leading up to the gathering suggest the Chinese government is gearing up to focus on supporting economic growth in the year ahead, but it’s unlikely China will unveil any major stimulus.

“Beijing will likely use the two sessions to announce tactical measures aimed at boosting short-term confidence in China’s economy but without changing Xi’s underlying strategy of state-led development,” said Neil Thomas, a fellow at the Asia Society Policy Institute’s Center for China Analysis.

The announcement of the economic growth target for 2024, set to be delivered by Premier Li on Tuesday, is among the most important issues to watch during the two sessions.

Analysts widely expect Li to reveal a relatively ambitious growth target of “around 5%,” showing that policymakers are still focused on economic growth, even as challenges pile up.

Observers will also be closely watching how markets respond. Heading into the gathering, many are skeptical that projections of confidence and measures announced at the event will be enough to restore optimism.

But even if they don’t, that’s unlikely to dent Xi’s power.

“The country’s economic problems are eroding ordinary people’s trust in the leadership’s ability to deliver higher growth and improved livelihoods,” said Asia Society’s Thomas.

“However, Xi does not need to win elections so what matters most for him is elite control rather than popular approval. And the economy seems a long way from the type of collapse that could overwhelm the party’s sophisticated apparatus of repression.”