Amidst COVID-19, China's Two Sessions give priority to stabilising employment and ensuring living standards in 2020

The successful completion of the Two Sessions at the end of May sent out a strong signal that China is returning to normalcy following the COVID-19 pandemic. The third session of the 13th National People’s Congress (NPC) and National Committee of the Chinese People's Political Consultative Conference (CPPCC) took place between May 21 and May 28 in Beijing.

Due to the COVID-19 pandemic, the Two Sessions were postponed for more than two months as compared to previous years. The duration was also cut short to eight days in 2020, from around two weeks in the past. Despite it being postponed and a shorter duration this year, the accomplishments of the Two Sessions are significant and the impact on the domestic economy, business and Chinese society will last for years. For example, China did not set an official GDP growth rate target for 2020. This previously only happened in the years between 2000 and 2002 due to the economic adjustment triggered by the Asian financial crisis that occurred in 1997 to 1998.

PwC has developed an in-depth review of this year’s Two Sessions, summarising the significance and business implications for the economy and business.

Government’s work priorities for 2020

Striving to achieve the goal of building a moderately prosperous society in all aspects.
Creating more than 9 million new urban jobs (or 3 million less than in 2019) and maintaining the surveyed urban unemployment rate of around 6%.
Keeping CPI growth at around 3.5%.
Stabilising imports and exports with higher quality.
Keeping per capita income growth in line with economic growth and eliminating poverty among all rural residents.
Effectively preventing and controlling major financial risks.
Continually cutting the energy consumption per unit of GDP and curbing major pollutant emissions.
Pursuing a more proactive and impactful fiscal policy.

Implications - what are the takeaways?

A positive GDP growth rate can be expected although the Government Work Report has not set a clear target.
China will implement substantial measures to support the economy by leveraging the two trillion yuan, with a focus on employment and living standards.
China will accelerate the reform and opening up process in order to stabilise economic growth, boost investment and stimulate consumption with 3.75 trillion yuan in special-purpose local government bonds.
China has continued to improve rule of law and state governance which provides the foundation and grounds for business growth and long-term economic prosperity.