China reveals its plan for a great future at the ‘two sessions’, and it includes Hong Kong

Its policy blueprint to sustain growth in the wake of the pandemic and prepare the economy for the next leap is a huge confidence booster
With China on the cusp of great change, Hong Kong should use its unique advantages to actively take part in this grand national development scheme

Ken Chu

Published: 8:00pm, 13 Mar 2021

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The 2021 government work report unveiled by Premier Li Keqiang is pragmatic yet encouraging, reflecting China’s growing confidence in managing its domestic market and in playing a role on the world stage. China is the first country to announce its gross domestic product growth target for this year. The target of above 6 per cent, although lower than projected by some global economists, would still give China the biggest expansion among the world’s major economies.

China realises that to achieve this, it must not only sustain its economy and raise competitiveness, but also chart sustainable development in the next decade and beyond. Policies designed to maintain growth in the wake of the Covid-19 pandemic and to prepare the country for the emerging new development paradigm in the face of global economic and political uncertainties were introduced in the work report.

The policies that stand out are the plans to continue with high-quality development, innovation and expansion of the domestic market, further market reform and opening up, and green developments. For example, China plans to expand investment with a earmarked central budget of 610 billion yuan (US$93.7 billion). Local governments may issue bonds totalling 3.65 trillion yuan, with the proceeds raised mainly for infrastructure projects.

It is also encouraging that “market entities” and “enterprises” were mentioned more than 70 times in the work report. This reflects central government concern about the well-being of enterprises, whether private or state-owned, small or large.

In the report, Premier Li pledges to roll out policies and measures to support enterprises, such as tax cuts and protection of market entities’ properties. All these will boost market confidence.

Beyond boosting the confidence of the business sector, the work report also aims to instil confidence in the general population. It unambiguously pledges to create 11 million new urban jobs, a number more than 1.5 times the entire Hong Kong population.

This is not an easy task, given the sluggish global economy and the lingering impact of the pandemic, but making such a pledge shows the confidence of the Chinese government in keeping the country’s job market healthy.

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2021 is a crucial year for China because the country will kick off its 14th five-year plan and flesh out Vision 2035, both of which highlight the importance of “new” developments – new development stage, new development mission and new development paradigm. China fully understands that in the new development paradigm, the country must forge ahead with further opening up, rising up against the tide of increasing protectionism in the world.

According to the work report, China’s research and development spending is set to grow by 7 per cent annually in these coming five years, in line with a national innovation-driven development strategy.

Echoing the vision that innovation is the cornerstone of China’s modern development, the report states that more effort and investment will be channelled into frontier scientific research areas, including new-generation artificial intelligence, quantum information, integrated circuits, brain science, gene and biotechnology, and deep-space and sea exploration.

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Besides these, China will step up R&D in blockchain and next-generation 6G wireless networks. The country also encourages and supports foreign enterprises to establish R&D centres and to join national science and technology programmes. The latter shows China’s willingness to open its arms to international technology companies and investors on a mutually beneficial basis.

The sections on international trade also indicate China’s readiness to foster multilateral cooperation. At the “two sessions”, Premier Li said the government is willing to foster mutually beneficial China-US business relations and to consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which is regarded as a rival to the China-led Regional Comprehensive Economic Partnership.

The world is in the midst of drastic change, something not seen in the past 100 years. China is also on the cusp of great change that is destined to capture the world’s attention.

As part of China, Hong Kong should leverage both the benefits of the unique “one country, two systems” arrangement and our own edge to actively take part in the grand national development scheme. The 2021 government work report gives all Chinese nationals the confidence needed to move forward.

Ken Chu is group chairman and CEO of Mission Hills Group and a national committee member of the Chinese People’s Political Consultative Conference