China | Main take-aways of 2021 “Two Sessions”

Summary

The annual “two-sessions” of China, namely the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), commenced in Beijing on March 4th 2021 and will be last for around one week, which are always the top priority in China’s political agenda every year.

Key points

• Key points:
• Delegates discuss the most important issues on all dimensions of national affairs, ranging from the summary of last year’s pandemic control endeavors and economic achievements to the announcement of 2021 key policy targets, from concluding of the past 13th Five-year Plan accomplishments to announcing the next 14th Five-Year Plan’s policy outlook.
• Key topics this year include how to normalize the unprecedented fiscal and monetary policies and at the same time avoid “policy cliff” to foster recovery, as well as how to revert the policy focus from pandemic relief to structural reforms going forward.
• The Government Work Report set 2021 growth target to "above 6%", which is much lower than market consensus and IMF forecast, indicating authorities’ consideration of global economic uncertainties, and more importantly to leave more space to curb financial risks and press ahead structural reforms.
• The 14th Five-Year Plan is formally launched and details will be reviewed in the “two sessions”.
• 2021 fiscal policy stance: normalization is the main theme while a neutral but still accommodative monetary policy to foster economic recovery.

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