China will soon convene its annual parliamentary meetings, which will set out plans for policies involving the economy, trade, diplomacy, the environment and more. The “ two sessions ”, which are the annual meetings of the National People’s Congress (NPC) and the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), begins this year on March 4 in Beijing. It will offer China’s top officials the chance to lay out major economic policies affecting global markets and serves as a rare occasion to answer key domestic and international concerns. Authorities have already raised the “threefold pressure” of contraction of demand, supply shocks and weaker expectations. China eyeing new strategies in zero-Covid policy as economic pressure mounts External headwinds are also growing with the US Federal Reserve’s potentially aggressive monetary tightening, continued technological containment efforts by the United States and commodity price hikes caused by geopolitical tensions. The ongoing crisis in Ukraine has added a further complication as more confrontations between major powers that have already haunted the global economic recovery and commodities markets loom. So, what can we expect from China’s top leaders next month? GDP and regulation China’s growth target, a baton for the economic policies for the rest of the year, will be revealed at the opening of the NPC session on March 5, when Premier Li Keqiang delivers the government work report. Beijing is expected to maintain growth of above 5 per cent this year, with stability already prioritised by policymakers. Some advisers have argued that it would be appropriate to set a target of around 5.5 per cent, while some have suggested a target range of between 5 and 5.5 per cent. China set an economic growth target of “above 6 per cent” for 2021, with its gross domestic product eventually growing by 8.1 per cent last year. Economic stabilisation endeavours for this year have already been evidenced by stronger monetary, fiscal and credit support from the start of this year. These include a cut to two major policy rates, a record 3.98 trillion yuan (US$629 billion) of new lending in January and the first batch of 1.46 trillion yuan worth of special purpose bond quota being issued. The NPC is likely to reiterate its softer stance on deleveraging, enabling more funding to flow to infrastructure and housing, as well as a more flexible implementation of energy-intensity caps Societe Generale China’s fiscal deficit ratio and special purpose bond quota will be key parameters to test the scale of Beijing’s stimulus plans for the year ahead. Beijing must also balance the competing goals of carbon emission reduction and economic growth. “The NPC is likely to reiterate its softer stance on deleveraging, enabling more funding to flow to infrastructure and housing, as well as a more flexible implementation of energy-intensity caps,” Societe Generale said last week. “Another important question is whether or not policymakers will also signal a gentler stance on tech regulation.” Zero-Covid policy China’s zero-Covid policy has entered its third year, but concerns are continually being raised over its impact on the economy, particularly manufacturing and the lives of residents. It differs vastly to other major economies, which have tended to adopt a “live with the virus” approach, and it has severely affected international exchanges. Zero-Covid approach puts China at disadvantage to the West, economists warn The parliamentary session will be an important window to see if Beijing will make any changes to its approach. Authorities can, though, also maintain the strategy because national economic growth remains relatively strong and it is seeking stability ahead of the 20th national congress. The key party meeting, which is held one every five years, is expected to undertake a leadership reshuffle when it takes place in the second half of the year. Unemployment Unemployment has become a worrying issue after the coronavirus dealt a heavy blow to private and small businesses, which employ more than 80 per cent of China’s urban workforce. The official surveyed unemployment rate has been stable after the initial shocks in early 2020. The reading fell from 6 per cent in April 2020 to 5.1 per cent, compared to the government’s target of 5.5 per cent. But college students, migrant workers and former soldiers are three major groups that are main areas of concern. A record 10.76 million college students will graduate this year, and the surveyed unemployment rate for people aged between 16 and 24 was 14.3 per cent in December. Meanwhile, the quality of jobs is deteriorating, as the government advocates flexible jobs, including delivery workers and bloggers, which have already attracted 200 million workers. Population, ageing and births China’s population increased by less than half a million last year, but the number of births dropped for the fifth consecutive year. Chinese mothers gave birth to 10.62 million babies last year, an 11.5 per cent drop from 12 million in 2020, while the national birth rate fell to a record low of 7.52 births for every 1,000 people in 2021, from 8.52 in 2020. Beijing upgraded its birth restrictions to allow couples to have up to three children from last year, while other supportive measures such as subsidies are also being considered. Economists have warned about a fast diminishing of China’s demographic dividend, which helped form its economic miracle in the past four decades, and it poses a threat to the country’s long-term productivity and potential growth. China’s population is also ageing, with people aged 60 and over accounting for 18.9 per cent of the total population at 267.36 million last year. Additional supportive policies and more details about the postponement of China’s mandatory retirement age could also be announced. Protection of women’s rights The sight of a middle-aged woman chained by her neck and shivering in the cold weather in the eastern province of Jiangsu stirred a storm of anger and public appeal to tackle the decades-old issue of trafficking. Seventeen officials in China have already been sacked, punished or are under investigation over the case, while her husband has been arrested and charged with abuse. He is also being investigated on suspicion of purchasing an abducted woman. China’s population crisis could give women greater reproductive rights Some members of the CPPCC had already planned to table suggestions to amend laws to enhance the protection of women’s rights. As a signal of the support from the central government, the protection of rural women’s rights was included in a key document on this year’s agricultural and rural works for the first time when it was released on Tuesday. Foreign relations As China’s relations with the US-led Western world continue to sour, foreign relations have gained attention in recent years’ gatherings, which are mainly supposed to handle domestic economic and social issues. China is still facing high tariffs, and continued technological containment from the US. It may also receive further scrutiny after Washington accused Beijing of missing some of the targets in the phase-one trade deal. China’s festering bilateral disputes push it to alter course on trade Lithuania and the unfolding Ukraine crisis have posed a new test to Beijing, as its moves are closely being watched and they may undermine its economic ties with the European Union and other developed economies. Chinese officials are likely to renew market opening and import promises, while they are also determined to push forward with the Regional Comprehensive Economic Partnership and seek to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Taiwan and defence budget The national defence budget is often viewed as an indication of Beijing’s assessment of national security. Its absolute value has continued to rise, given the border rows with India, Taiwan and tensions in the South China Sea. The budget hit a record high of 1.38 trillion yuan (US$218 billion) last year, an increase of 6.8 per cent from a year earlier. It represented 1.77 per cent of the national gross domestic product in 2020, lower than 3.74 per cent in the US. China will take all the necessary measures to defend its sovereignty and security Wang Wenbin China regards Taiwan as a breakaway province to be eventually reunited and it has taken a more harsh stance since pro-independence Tsai Ing-wen was re-elected for a second term as president in 2020. Military drills have become more frequent and Beijing has also blacklisted separatist Taiwanese politicians. This week, it also sanctioned two American firms for supplying weapons to Taiwan as part of the US$100 million US arms sales deal that was announced earlier this month. “China will take all the necessary measures to defend its sovereignty and security,” foreign ministry spokesman Wang Wenbin said on Monday.