CCP’s major political conferences marked by potential economic data irregularities and power centralization.
News Analysis
After the conclusion of the week-long key annual meetings known as the “Two Sessions” of the ruling Chinese Communist Party (CCP) on March 11, observers outside China highlighted Beijing’s questionable economic data and the centralization of power by CCP leader Xi Jinping as crucial points of discussion.
Observers of China noted that as the country’s economy declined, Xi Jinping enforced more authoritarian measures, leading to concerns about the CCP’s growing insecurity and potential collapse.
The “Two Sessions” of the CCP refer to the yearly plenary sessions of the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC), the two houses of China’s rubber-stamp legislature.
During the meetings, Minister of Finance Lan Foan acknowledged the need for all levels of government to “tighten the belt” as a long-term solution to China’s struggling economy and mounting local government debts.
Premier Li Qiang also stressed in his work report the necessity for “governments at all levels to embrace austerity,” shedding light on the challenging financial position of local governments.
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Wind, a financial data provider, reported that by the end of 2023, local governments in China had a total outstanding interest-bearing debt of $5.5 trillion. This figure excludes massive off-balance sheet debt held by local governments.
GDP, Military Budget
As per the premier’s work report, the 2024 GDP growth target is set at 5 percent, similar to last year’s officially stated 5.2 percent growth rate. The military budget will see a 7.2 percent increase in 2024.
In recent years, the international community has questioned the CCP’s official GDP growth rate as China’s economy continues to falter.
According to the Rhodium Group, China’s actual GDP growth in 2023 should be around 1.5 percent.
Song Guocheng, a senior researcher at the International Relations Research Center of Taiwan National Chengchi University, expressed skepticism about the GDP and military budget announced during the “Two Sessions.” He highlighted that China’s GDP is manipulated by the authorities rather than being naturally generated like in free-market economies.
