- As of January 16th, 2022, the province-level version of the ‘two sessions’ (the legislative and consultative conferences) have been held in 31 provinces, during which local governments summarized their work from the previous year and laid out key policy directions and growth targets for 2023.
- As pandemic control measures are lifted, there is a clear focus on economic growth, as confirmed by the released provincial GDP targets. The majority of provinces are aiming for a growth rate of 6% or higher. This will likely anchor the national GDP target to be announced in March 2023 during the national Two Sessions.
- Local governments are focused on promoting consumption, with a particular emphasis on bulk consumption such as automobiles and home appliances. Provinces such as Zhejiang, Hainan, Jiangsu, and Anhui have announced measures to encourage consumption of new energy vehicles, from purchase subsidies to expanding charging infrastructure. Foreign companies in this sector will also benefit from policy support that aims to boost demand.
- In addition, innovation remains a top priority in almost all provinces, with many of them specifying quantitative targets for R&D investment and the desired number of newly recognized “high-tech new enterprises” (HTNEs). Gaining HTNE status requires complex application procedures and challenging criteria, but can lead to preferential policies, including tax cuts and subsidies. FIEs should review the various notices issued at the local level and evaluate their eligibility and chances for a successful application.
Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.