China’s leaders meet to map plans for the economy – and the country’s cities
One Gathering, Two Meetings: China Leaders Convene to Address Slowdown, Urbanization
Top Communist Party cadres have gathered in Beijing for two meetings: the usual annual conference to review economic performance and chart out next year’s policies, and a special urban works convention seeking a better approach to develop cities.
For the leadership headed by President Xi Jinping, proper management of China’s urbanisation process is vital to sustaining economic growth and winning the support of the country’s some 270 million migrant workers, who are often not covered by its social welfare system.
The urban work conference could be very interesting, while the economic work conference is unlikely to offer big surprises
“The urban work conference could be very interesting, while the economic work conference is unlikely to offer big surprises,” said Shen Jianguang, chief economist for Mizuho Securities Asia. “The economic work conference addresses concerns mainly for 2016, but decisions made at the urban work conference may affect China’s growth not only next year but also in the next decade.”
The Politburo meeting Xi chaired earlier this week set the tone for next year’s economic priorities, namely to address property inventory, excess capacity, heavy burdens on businesses and financial risks.
For urban development, the Politburo called for the process of giving migrant workers full urban residency status to be sped up.
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“How will China allow farmers to gain more from land deals? How will China help migrant workers settle in cities? The meetings may shed more light on the Chinese leadership’s thinking on these issues,” Shen said.
When it comes to decision making in the Chinese government, the 25-member Politburo comes up with general guidelines, but it is up to the hundreds of attendants now gathered in Beijing – including state leaders, ministers, provincial leaders and heads of big banks and state conglomerates – to work out the detailed policies and targets.
The 2016 economic targets – including gross domestic product growth, investment and money supply growth – will not be made public until the annual parliament meeting in March when thousands of delegates will endorse each decision at the Great Hall of the People.
The two meetings in Beijing are being held at a time of slowing economic growth. They also come on the heels of the United States Federal Reserve’s first interest rate increase in a decade.
The mainland’s GDP growth is likely to be below 7 per cent this year, with the figure falling even lower next year amid an investment slowdown and sluggish exports. On one hand, the mainland has built up too many properties in its cities and property inventory has dragged down growth.
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On the other, millions of migrant workers who left their rural hometowns to work in cities cannot afford homes in these urban areas, making it hard for them to settle down and become urban consumers.
“China’s new urbanisation strategy is very important because you can’t build up a comprehensive well-off society by 2020 with millions of people remaining half-urbanised,” said Ye Weichun, an urban researcher affiliated with the National Development and Reform Commission, referring to China’s 2020 plan.
You can’t build up a comprehensive well-off society by 2020 with millions of people remaining half-urbanised
In 1978, when the mainland last held the urban work conference, only 18 per cent of mainlanders lived in towns and cities. At the end of last year, 55 per cent – or 750 million people – were living in urban areas.
But according to the country’s household registration system, less than 40 per cent of mainlanders are officially urban residents with full access to pension and education coverage.
“The central urban works conference is important,” said Guan Qingyou, head of Minsheng Securities’ research agency. “China’s urbanisation has always been about land and money, and now the focus will shift to people.”
