This year’s National People’s Congress is a particularly grueling affair. For the third time, its deputies have been meeting under Covid restrictions this weekend. And the party is under growing pressure to continue spreading optimism. While managing the economy is starting to prove difficult due to the imbalance in the real estate market, new troubles are emerging thanks to the Ukraine war. Russia has dragged China into a conflict that is reaching uncontrollable dimensions. Even if this turns Russia into China’s economic vassal, it has almost only political value. It does not increase prosperity significantly. The threat of a slump in the global economy weighs much more heavily.
China had hoped to finally leave Covid behind this year, like all other countries. The plan was to clean up the real estate market while normalizing lending and monetary policy. These grand plans are now failing due to the persistence of the virus and new uncertainties. Didn’t Premier Li Keqiang seem more serious and tense than usual when he delivered his work report? It certainly would be understandable.
Only one certainty remains: The military budget is rising disproportionately. This is hardly surprising, given that even Germany, which has been so hesitant up to now, is now stepping up its spending. However, since all other Asian nations are also increasing their defense budget, there is a risk of an arms race, analyzes Michael Radunski. If Li then follows up with threats against Taiwan, the general feeling of unease will increase considerably. After all, Putin taught us to listen carefully to dictators.
Frank Sieren then ranks the work report and the goals of this NPC kick-off again according to their priorities. According to his analysis, the prosperity of the people has absolute priority over all other goals, which is why reducing inequality and solving the social question remain among the priorities. Only then follow reform and opening up the country. Environmental protection and foreign trade are pretty far down the list. So the German economy should brace itself for ongoing tough conditions.
Crises and wars are getting closer – this also goes for us in our dealings with China, thanks to the Moscow-Beijing axis. Don’t let it get to you.
It is part of the ritual of the National People’s Congress to refer to the great difficulties that lie ahead this year. Premier Li Keqiang, however, did not even mention the war in Europe once in his annual speech. He did, however, speak of a “grave and uncertain” outlook – and let a number speak for itself. The party has set its growth target at 5.5 percent, the lowest since 1991.
This figure, however, is exactly in the midrange of estimates by domestic and foreign analysts and, in this light, did not come as a surprise. In view of a difficult path away from the zero-covid strategy (China.Table reported) and impending shocks stemming from the war in Ukraine, a higher figure would have been unreasonable. A lower figure, on the other hand, would have spread pessimism and given the impression that the party does not have the power to absorb external shocks.
Li had some mixed messages in store for German companies. Stable growth, a commitment to openness, more money in citizens’ pockets, all that sound good at first. But the increasingly intense emphasis on economic and technical independence raises fears of further decoupling from international partners. German companies could lose further market share to domestic providers.
The National People’s Congress (NPC) is China’s parliament. However, the 2,980 deputies uncritically wave through all of the CP’s decisions. Nevertheless, the event is considered a focal point of political decision-making – especially since it is here that the planned figures are announced. On Saturday, the opening ceremony featured Li’s speech. The People’s Congress convenes for a week and a half.
Last year’s growth target was over six percent, this year’s was somewhat lower at around 5.5 percent. The figure for 2021 actually turned out to be significantly higher, as is often the case; however, a catch-up effect after the first Covid year also played a role here.
The entire array of figures in this year’s NPC Report is meant to convey calmness and signal stability. No wonder. In the fall, Xi Jinping plans to be re-elected as the central leader at a major party congress. He will thus exceed the term limit that used to be in effect in the party. As legitimation for his apparently unlimited rule, he will have to deliver on his promise of dependable leadership.
Economists at investment house Nomura expect the government to stimulate building activity throughout the year to reach the growth target. Last year, the real estate sector dived. The entire industry was plagued by payment issues as a result of the de facto bankruptcy of major provider Evergrande.
On closer inspection, the new growth target is not low at all. Percentage growth naturally decreases the larger an economy becomes. Otherwise, growth would take on gigantic, unsustainable proportions. To achieve a healthy five percent growth, China will have to spend an additional ¥6 trillion this year, based on its current GDP of ¥114 trillion. That is around €870 billion. Ten years ago, China’s GDP was ¥54 trillion. The growth of just under eight percent at that time corresponds to an increase of ¥4 trillion. So in absolute terms, China’s economy is growing more than it was ten years ago. However, the value of the yuan is also lower today.
The National Development and Reform Commission NDRC also published its report along with its targets on Saturday. Noticeable was the mention of the solar industry as key to further development. According to the report, another goal is “steady and wise progress in the development of the hydrogen economy.”
Meanwhile, Premier Li did not announce a formal departure from China’s zero-covid strategy. He did, however, promise to lessen the burden on the economy by adopting a new approach. Infection control should become “routine,” Li said. This suggests that immigration regulations and border quarantine will also remain in place. For expats in China, this is sad news, but hardly surprising.
What was surprising, on the other hand: There was no noticeable mention of “dual circulation” over the weekend. Xi had presented this strategy in 2020. The “dual circulation” is intended to secure China’s independence without neglecting foreign trade. Perhaps the strategy will still make a separate appearance at the People’s Congress. In any case, it would be unusual if an idea of Xi’s, which was anchored in the public consciousness at great expense, were to be dropped again so quickly as a linguistic regulation.
Shortly before China’s Premier Li Keqiang opened the National People’s Congress in Beijing on Saturday morning, a report from North Korea caused a stir: The regime of ruler Kim Jong-un has fired a ballistic missile. This marks the ninth missile test by North Korea in this still young year. The fact that ruler Kim is carrying out the test at the beginning of the most important political event of the year is a particular affront to Beijing.
But when Li Keqiang stepped in front of the roughly 3,000 delegates in the Hall of the People a little later, he did not mention the test with a single syllable. Nor did he mention the Russian invasion of Ukraine or the new missile defense system that South Korea tested a few days ago. And yet, all these developments play an important role in Beijing’s decision: China’s military spending is to be increased by a whopping 7.1 percent this year. This brings total spending to the equivalent of $230 billion.
However, it is clear to any observer: China’s military will receive even more generous funding in practice. “The actual spending on the military is far greater,” says Timothy Heath of the renowned US think tank Rand Corporation. “Many areas are simply not included, such as spending on research and development,” the scientist told China.Table.
But it is precisely in this area, in high technology, that China will invest massively in the coming years. “China wants to develop military capabilities to be able to carry out more far-reaching missions in the future and thus assert its interests abroad.” Heath cites the Belt and Road Initiative, Xi Jinping’s prestige project. “If partner countries decide that China can’t provide the security they need, they will seriously limit their participation in these projects,” Heath believes.
This is matched by Premier Li Keqiang’s speech to the National People’s Congress: “We will improve military training and combat readiness.” The country will stand firm to safeguard its sovereignty, security and development interests. The Chinese military’s logistics and management systems will be upgraded more quickly and a modern weapons and equipment procurement system will be established.
Li urged that “authorities at all levels must support the development of national defense and the armed forces to ensure that the unity of the military and the government, as well as the unity of the military and society, remains solid.”
The 7.1 percent increase in military spending is noteworthy from several perspectives: First, it is rising faster than in previous years – after 6.6 percent in 2020 and 6.8 percent in 2021. And this is despite the Covid pandemic, a challenging global economic situation and massive troubles in the domestic real estate market. In addition, the 7.1 percent for the military is well above the targeted economic growth of 5.5 percent – and even more clearly above the 3.9 percent by which all other expenditures in the Chinese budget are to increase. This makes it clear that the leadership in Beijing is focusing on strengthening the armed forces this year.
Military expert Heath believes China’s military will invest in the development of ships and large transport aircraft. In general, the navy will receive a lot of attention. “In addition, they will want to improve the technological capabilities of the People’s Liberation Army, through more artificial intelligence and other digital technologies.”
The rising military spending of the People’s Republic is by no means a phenomenon unique to China. Rather, they are following a global trend that has recently accelerated significantly in China’s neighborhood. Quite a few experts already see a frantic arms race in Asia: India, for example, plans to spend around $70 billion on its military in the 2022-23 fiscal year, and Taiwan $16.8 billion – plus an extra budget of around $8.6 billion for missiles and a coastal defense system. And even pacifist Japan plans to spend $47 billion on its armed forces this year. The fact that China’s military spending is also rising in such an environment comes as no surprise.
But a comparison with the arms budgets of neighboring countries also shows that Beijing spends significantly more on its military: officially, $230 billion. In global comparison, only the US spends more money on its military, namely around $770 billion.
But China’s leadership is growing increasingly concerned about its neighborhood: There are repeated armed incidents on the border to India, and there are far-reaching territorial disputes in the South and East China Seas. In neighboring Afghanistan, there are fears of a resurgence of terrorism (China.Table reported). In addition, more and more anti-China alliances are being formed, such as Aukus or Quad (China.Table reported).
And last month, the United States presented its long-awaited Indo-Pacific strategy to counter China’s growing influence. Among other things, Washington wants to strengthen its relations with South Korea and Japan. A particular thorn in Beijing’s side, however, is America’s focus on Taiwan.
And so Li Keqiang did not hide Beijing’s plans on Saturday. He reiterated Beijing’s desire to resolve the “Taiwan question” once and for all – and to do so “within the modern era.” President Xi Jinping had already left no doubt that the reunification of China would be realized by the 100th anniversary of the People’s Republic in 2049 at the latest – if necessary by military force.
With Russia’s invasion of Ukraine and Russian President Vladimir Putin’s previous statements, there should be no illusions about China’s stance on Taiwan. No one can say they were unaware of Beijing’s plans. Li Keqiang told the National People’s Congress, “We will push forward the peaceful growth of cross-Taiwan Strait relations and the reunification of China.” He objected to “separatist activities”, Taiwan independence efforts, and – above all – foreign interference. “All of us, Chinese on both sides of the Taiwan Strait, should come together to advance the great and glorious cause of China’s revival.” To be sure, peaceful-sounding vocabulary is used here. Behind them, however, are thinly veiled threats.
The order in which the topics in the government work report presented by Premier Li Keqiang are addressed says a lot about the government’s priorities for the coming year. The report’s structure also reflects China’s balance of power. The influence of different policy areas is balanced with the concerns of the people, to which the government must respond to maintain social stability. The rule here is that the most important things come first.
First, a look back at the previous year: The economy, and not ideology for instance, was once again the top priority. Most important in this area was growth, which reached 8.1 percent. However, growth is only meaningful if it creates jobs and keeps prices stable. Unemployment was at 5.1 percent, and more than twelve million new jobs were created.
As the second most important area in his review, Li mentions innovation. He does not emphasize the innovation expenditures of the state, but those of the companies. Last year, they invested 15.7 percent more on research and development. The high-tech industry grew by 18.2 percent. Agriculture followed, where Li reported a record in grain production. Li praises the free-market reforms and opening to the outside world, which, interestingly enough, are still mentioned in the same breath, even though the country is physically sealing itself off while simultaneously trying to strengthen the market economy. Premier Li is particularly proud of the fact that, for the first time, China has over 150 million companies competing in the market economy.
It is followed by environmental protection. Particulate matter pollution in urban areas has dropped by 9.1 percent. Only then does Li emphasize the standard of living of the population in his speech. Disposable income per capita has risen by 8.1 percent. Other keywords: fighting poverty and renovating apartments and houses. And only at the end does Li mention the pandemic. The measures have been “consolidated,” he says very routinely. The military plays only a minor role in the speech.
But much more important is the question of how Premier Li will set the priorities in the new year. We list them here according to the order in which they were mentioned in the speech.
1. stable economic growth
Although Li expects higher tax revenues, the burden on private companies is likely to decrease in the future. The government wants to stabilize debt at 2.8 percent of GDP with a slight downward trend. A “cautious” monetary policy is planned. In other words, the money supply is to be kept on a tight rein. The central bank is to lower interest rates slightly to make it easier to manage shocks and crises. Beijing also wants to further decentralize budgetary responsibility. Local authorities will thus be given more control over how they procure money and what they spend it on. The bulk of investment will be left to the private sector. Overall, the government says it wants to “tighten its belt and keep its spending low for the good of the people.” These are all measures that are taken when the economy is not expected to slow down significantly. But Li will have to readjust, of course, depending on how the year develops.
2. strengthening the market economy
Here, Li’s focus is on tax relief and improving liquidity, especially for small and medium-sized enterprises. The government wants to provide jobs for the more than ten million students who are graduating from universities again this year. The issue of jobs keeps cropping up in different places, which highlights its importance for the government.
3. strengthening domestic economy
Another high priority – higher than foreign trade – is the development of China’s internal market for its own companies. In this area, Premier Li is primarily concerned with boosting consumption by “increasing the purchasing power” of the people. In addition, consumer rights are to be bolstered. Premier Li wants to achieve this by “streamlining and decentralizing the administration,” with the goal of “creating a market-based business environment based on clear laws”. The market-economy reforms of state-owned enterprises are to be accelerated. In other words, they are to receive less money. Private companies, on the other hand, should have an easier time obtaining loans.
4. strengthening innovative power of the economy
China wants to further expand its research and development capacities and promote companies that do the same, Li emphasizes. The goal here: “talent centers and innovation hubs of global relevance.”
For companies, this means that R&D investments “can no longer be deducted from taxes at 75 percent, but at 100 percent.” In addition, there are tax breaks for companies that invest in basic research. The expansion of 5G is to make even swifter progress.
5. promotion of regions
Li wants to better interlink China’s regions, balance their economic power and expand their infrastructure. In the process, he also wants to keep minorities and border regions in mind.
6. agriculture and rural regions
The most important news for farmers: The minimum prices for rice and grain will be raised. Premier Li wants to maintain the 120 million hectares of agricultural land while improving its quality. He wants to improve the management of environmental disasters and animal diseases. He also wants to “redouble efforts” in agricultural research. China needs to continue to fight rural poverty, Li said.
7. further promote foreign trade
In this area, Li wants to give smaller and medium-sized companies better access to export credit insurance. “New forms” of foreign trade are to be developed. Customs regulations are to be “simplified” and the logistics system expanded “to an international level.” International investment in China is to be encouraged, especially in medium- and high-end manufacturing, research and development, and modern service industries, as well as investment in the still underdeveloped central, western, and northeastern parts of China. New free trade zones are to be established. The Hainan Free Trade Port is also to be expanded – the only one mentioned by name. Li also wants overall to “create more business opportunities for foreign companies in China” – whatever that means. What is ominous about this is that this point is ranked much lower than the strengthening of domestic consumption. China does, however, plan to “deepen” exchanges in the RECP free trade zone, the largest in the world (China.Table reported). Li also wants to look into “reforming the World Trade Organization” (WTO). That is the only international organization mentioned in the paper.
8. strengthen environmental and climate protection
First, Premier Li mentions environmental pollution and the revitalization of ecosystems. Only then follows emissions reduction and “greater harmony between people and nature.” In 2022, the government wants to gradually work on achieving climate goals, following the principle of ‘first build up the new before tearing down the old.’ The report primarily mentions wind and solar power. Nuclear and hydropower, surprisingly, are not mentioned. Li wants to stop the “blind development” of energy-intensive projects at the same time.
9. improve the well-being of people
The first thing Premier Li mentions here is that improving the quality and fairness of access to education is still a major problem in China. Next, the Premier mentions improving the health care system. He promises to increase the state’s share of health insurance. But China also wants to expand retirement benefits. Interestingly, this point is mentioned last. An indication that the population’s discontent in this area is not as high.
The focus in these nine key areas of government policy for 2022 is thus clearly emerging: a more sustainable market economy, decentralization, innovation, and education. But the government simultaneously wants to keep a closer eye on debt. Social and regional imbalances are also to be reduced. Research and development, as well as the creation of enough jobs, are key. The freedom of Western companies is to be increased, and international economic networking is to be expanded. How this will work out in practice remains to be seen. However, the stronger emphasis on domestic consumption and the domestic economy is already noticeable.
“Shanghai is constantly changing, continues to build itself every day, never stands still,” above all, it is a city with many faces, says Fanny Hoffmann-Loss. She is an architect and project manager at the architectural firm Gerkan Marg and Partners in Shanghai. In her free time, she guides tourists through the city as a Shanghai flâneur: “On the one hand, modern high-rises and an enormous standard of living; on the other, old alleys and historic sites.
As a member of the Shanghai Flaneur, she experiences both up close. The organization has been around for 14 years now and was one of the first to offer tourist tours. She has been giving tours herself for about twelve years. “I really enjoy that. It gets me more in touch with the city.”
During city tours, she talks about the skyline, waterfront development and high-rises of the modern urban center. “These are mostly not sustainable,” Hoffmann-Loss says. On other days, she leads tours of the city’s past through parts steeped in history: old neighborhoods and row houses reflect the British and French colonial periods; monuments recall Shanghai’s Jewish history. ” 2,500 refugees came to Shanghai in 1983. It was the last place in the world to accept refugees without visas.”
This versatility is something her profession has in common with the city. The architectural projects would differ from the German ones, not only in their dimension, but also in their local identity. “Feng shui is very important here. Entrances are always located in the south. Buildings should generally not have too sharp corners.” Otherwise, the team stays true to their German GMP style, he said. “That’s the reason we’re so successful here in the country. Because it’s different.”
One of the projects that were recently completed involves the Huangpu River in the heart of the city. “The city is strongly influenced by its river, which flows through it. It is one of my favorite places. It also changes every day.” Through boat traffic, tides, unexpected visitors. “The other day I even saw water turtles in it.” The project from the so-called South Bund covers two kilometers of the 45-kilometer stretch of shoreline around the river, a promenade with cafes, surrounded by nature. “Walking along the river, with the old and new skyline in the background – I don’t know any other city that has that to offer.”
Hoffmann-Loss has known the city and its country for almost 30 years. She first traveled to Beijing in 1991, and two years later, she was drawn to the People’s Republic again for a Chinese language course. After that, she visited the country more and more often, mainly to see her parents. “Back then, everyone still rode bicycles, and after 8 PM, horse-drawn carts were allowed on the street to bring building materials. I had to bring light bulbs to my parents, who worked at the German Embassy in Beijing at the time, because there were only 20-watt bulbs to buy. It was awfully gloomy everywhere.”
She first came to Shanghai in 1996 for a study scholarship. Hoffmann-Loss studied architecture at the Technical University in Berlin. The move from Germany to a city like this was an adventure for the student. Not only because of the architecture, but also because of the whole flair, the atmosphere – and the ambition, already palpable at the time, to become one of the most exciting cities in the world. “The culture, the people, the vibrancy – it’s an incredibly beautiful and exciting place to study,” Hoffmann-Loss says.
Still, she was quite overwhelmed by the gigantic leap the city had made when she returned to China in 2004 with her husband – who is also an architect. Germany was in the midst of an economic crisis, and many people were losing their jobs. And Shanghai? Booming more than ever with life and opportunity. “The insane growth in major Chinese cities has rapidly increased the quality of life of its citizens and continues today, 15 years later. In Shanghai, unfortunately, this can also mean that a house you want to see is no longer there a month later.”
Fanny Hoffmann-Loss believes this is a major problem. “Because of the rapid modernization, the city is losing a lot of its old. The risk is that soon there will be nothing left of it.” There are only very few areas where the spirit of the past is still alive, she says. “Two or three entrances away from the busy streets, you suddenly find yourself in a village where the old people sit on their little stools in courtyards and alleys, peeling vegetables and watching over the children playing. That’s the old Shanghai.” In such places, the city retains some of its old charm. “It defines the city, to have a bit of both, the old and the new. I sincerely hope it preserves that.”
For this reason, the Ministry of Housing and Rural Urban Development announced a new directive at the end of August 2021. “Among other things, it mandates that in the future, existing buildings in inner-city areas may not be demolished on a large scale. New development in these areas may only have twice the area of the existing building and at least 50 percent of the resident population is to remain living in the immediate vicinity,” explains the architect. It remains to be seen how this will be implemented. Lisa Marie Jordan
Attention, trigger warning! After reading this text, you will see pigeons with different eyes during your next stroll through the city center. The times when you associated the T-word only with cooing and breadcrumbs should be over once and for all. So if you want to hold on to the perfect world of pigeons, you’d better turn a blind eye now and choose the next article.
Still here? Good. Then it’s time for a pigeon cesura. Because some flying objects that pretend to be harmless tourist pigeons actually turn out to be feathered sly dogs. Of course, the Chinese have long since recognized this and have woven corresponding warnings into the vocabulary. We are talking about the expression 放鸽子 fàng gēzi. Literally, it means “to let pigeons free/fly”, but in a figurative sense it also means “to stand up someone” or “to let someone down”.
There are various stories about where this meaning comes from. The first takes us into the Beijing pigeon-fancier milieu. Apparently, it has happened that flocks of pigeons did not return to their actual owner, but instead landed at competitors. And sometimes the scheme was carried out with the help of collaborating pigeons. Some shady breeders are said to have actually trained their birds to be “kidnapper pigeons” – so-called 诱鸽 yòugē (from 诱拐 yòuguǎi “kidnap, abduct”). These kidnap birds confuse other birds with insidious flight maneuvers and thus cunningly guide them into their own pigeon loft, leaving their original owner empty-handed, or empty-caged, rather.
Another possible explanation leads us to the old Shanghai gambling milieu. Here, lottery tickets with poor chances of winning were colloquially called 白鸽票 báigēpiào “white pigeon tickets”. For the wager of such washout tickets usually quietly flapped into the pockets of lottery operators and was never seen again.
Others say that the pigeon metaphor dates back to the days of the carrier pigeon (信鸽 xìn-gē). When someone eagerly awaited a letter, but only the bird arrived and not the letter, the recipient complained that only a pigeon had been sent (放鸽子 fàng gēzi), not the promised letter. The saying “to let a pigeon fly” is therefore said to have become the winged word for broken promises and missed dates. Either way, pigeons seemed to be unreliable in this case as well. By the way, the Chinese Internet community has taken the term even further. Today, they refer to influencers and Internet personalities who always run their mouths but ultimately fail to deliver as 鸽王 gēwáng “pigeon kings“.
Unfortunately, I must tell you that this is not all. If we continue to cling to the heels of the flying beast, we will be drawn even deeper into the world of human abysses. Sadly, the criminal underworld and mafia circles (黑社会 hēishèhuì) do not stop at human decoys. In criminal milieus, the term 放鸽子 fàng gēzi is a code word for when women swarm out as bait. As amusement ladies and prostitutes, they lure men into their clutches. And then, in the worst case, robbery and assault, even extortion of money and business secrets, await them in their nests. Of course, the whole thing also works the other way around. So our animal metaphor journey harbors a fair amount of turbulence, but I did warn you.
And, last but not least, 放鸽子 fàng gēzi is also a common word in the world of cybercrime. In reference to a legendary Trojan software (木马病毒软件 mùmǎbìngdú ruǎnjiàn) called “gray pigeon” (灰鸽子 huī gēzi), which allowed hackers (黑客 hēikè) to gain access to other people’s computers, “letting pigeons fly” is also used as a synonym for planting malware.
However, now that we have properly plucked the pigeon linguistically, it should perhaps be said for the sake of fairness that 放鸽子 fàng gēzi can of course also be used in the literal sense. For example, when releasing pigeons as a symbol of peace (和平鸽 hépínggē “peace pigeon”). So always look carefully at which pigeon you have in front of you, and keep your faith in the good in people.
Verena Menzel runs the language school New Chinese in Beijing.
This year’s National People’s Congress is a particularly grueling affair. For the third time, its deputies have been meeting under Covid restrictions this weekend. And the party is under growing pressure to continue spreading optimism. While managing the economy is starting to prove difficult due to the imbalance in the real estate market, new troubles are emerging thanks to the Ukraine war. Russia has dragged China into a conflict that is reaching uncontrollable dimensions. Even if this turns Russia into China’s economic vassal, it has almost only political value. It does not increase prosperity significantly. The threat of a slump in the global economy weighs much more heavily.
China had hoped to finally leave Covid behind this year, like all other countries. The plan was to clean up the real estate market while normalizing lending and monetary policy. These grand plans are now failing due to the persistence of the virus and new uncertainties. Didn’t Premier Li Keqiang seem more serious and tense than usual when he delivered his work report? It certainly would be understandable.
Only one certainty remains: The military budget is rising disproportionately. This is hardly surprising, given that even Germany, which has been so hesitant up to now, is now stepping up its spending. However, since all other Asian nations are also increasing their defense budget, there is a risk of an arms race, analyzes Michael Radunski. If Li then follows up with threats against Taiwan, the general feeling of unease will increase considerably. After all, Putin taught us to listen carefully to dictators.
Frank Sieren then ranks the work report and the goals of this NPC kick-off again according to their priorities. According to his analysis, the prosperity of the people has absolute priority over all other goals, which is why reducing inequality and solving the social question remain among the priorities. Only then follow reform and opening up the country. Environmental protection and foreign trade are pretty far down the list. So the German economy should brace itself for ongoing tough conditions.
Crises and wars are getting closer – this also goes for us in our dealings with China, thanks to the Moscow-Beijing axis. Don’t let it get to you.
It is part of the ritual of the National People’s Congress to refer to the great difficulties that lie ahead this year. Premier Li Keqiang, however, did not even mention the war in Europe once in his annual speech. He did, however, speak of a “grave and uncertain” outlook – and let a number speak for itself. The party has set its growth target at 5.5 percent, the lowest since 1991.
This figure, however, is exactly in the midrange of estimates by domestic and foreign analysts and, in this light, did not come as a surprise. In view of a difficult path away from the zero-covid strategy (China.Table reported) and impending shocks stemming from the war in Ukraine, a higher figure would have been unreasonable. A lower figure, on the other hand, would have spread pessimism and given the impression that the party does not have the power to absorb external shocks.
Li had some mixed messages in store for German companies. Stable growth, a commitment to openness, more money in citizens’ pockets, all that sound good at first. But the increasingly intense emphasis on economic and technical independence raises fears of further decoupling from international partners. German companies could lose further market share to domestic providers.
The National People’s Congress (NPC) is China’s parliament. However, the 2,980 deputies uncritically wave through all of the CP’s decisions. Nevertheless, the event is considered a focal point of political decision-making – especially since it is here that the planned figures are announced. On Saturday, the opening ceremony featured Li’s speech. The People’s Congress convenes for a week and a half.
Last year’s growth target was over six percent, this year’s was somewhat lower at around 5.5 percent. The figure for 2021 actually turned out to be significantly higher, as is often the case; however, a catch-up effect after the first Covid year also played a role here.
The entire array of figures in this year’s NPC Report is meant to convey calmness and signal stability. No wonder. In the fall, Xi Jinping plans to be re-elected as the central leader at a major party congress. He will thus exceed the term limit that used to be in effect in the party. As legitimation for his apparently unlimited rule, he will have to deliver on his promise of dependable leadership.
Economists at investment house Nomura expect the government to stimulate building activity throughout the year to reach the growth target. Last year, the real estate sector dived. The entire industry was plagued by payment issues as a result of the de facto bankruptcy of major provider Evergrande.
On closer inspection, the new growth target is not low at all. Percentage growth naturally decreases the larger an economy becomes. Otherwise, growth would take on gigantic, unsustainable proportions. To achieve a healthy five percent growth, China will have to spend an additional ¥6 trillion this year, based on its current GDP of ¥114 trillion. That is around €870 billion. Ten years ago, China’s GDP was ¥54 trillion. The growth of just under eight percent at that time corresponds to an increase of ¥4 trillion. So in absolute terms, China’s economy is growing more than it was ten years ago. However, the value of the yuan is also lower today.
The National Development and Reform Commission NDRC also published its report along with its targets on Saturday. Noticeable was the mention of the solar industry as key to further development. According to the report, another goal is “steady and wise progress in the development of the hydrogen economy.”
Meanwhile, Premier Li did not announce a formal departure from China’s zero-covid strategy. He did, however, promise to lessen the burden on the economy by adopting a new approach. Infection control should become “routine,” Li said. This suggests that immigration regulations and border quarantine will also remain in place. For expats in China, this is sad news, but hardly surprising.
What was surprising, on the other hand: There was no noticeable mention of “dual circulation” over the weekend. Xi had presented this strategy in 2020. The “dual circulation” is intended to secure China’s independence without neglecting foreign trade. Perhaps the strategy will still make a separate appearance at the People’s Congress. In any case, it would be unusual if an idea of Xi’s, which was anchored in the public consciousness at great expense, were to be dropped again so quickly as a linguistic regulation.
Shortly before China’s Premier Li Keqiang opened the National People’s Congress in Beijing on Saturday morning, a report from North Korea caused a stir: The regime of ruler Kim Jong-un has fired a ballistic missile. This marks the ninth missile test by North Korea in this still young year. The fact that ruler Kim is carrying out the test at the beginning of the most important political event of the year is a particular affront to Beijing.
But when Li Keqiang stepped in front of the roughly 3,000 delegates in the Hall of the People a little later, he did not mention the test with a single syllable. Nor did he mention the Russian invasion of Ukraine or the new missile defense system that South Korea tested a few days ago. And yet, all these developments play an important role in Beijing’s decision: China’s military spending is to be increased by a whopping 7.1 percent this year. This brings total spending to the equivalent of $230 billion.
However, it is clear to any observer: China’s military will receive even more generous funding in practice. “The actual spending on the military is far greater,” says Timothy Heath of the renowned US think tank Rand Corporation. “Many areas are simply not included, such as spending on research and development,” the scientist told China.Table.
But it is precisely in this area, in high technology, that China will invest massively in the coming years. “China wants to develop military capabilities to be able to carry out more far-reaching missions in the future and thus assert its interests abroad.” Heath cites the Belt and Road Initiative, Xi Jinping’s prestige project. “If partner countries decide that China can’t provide the security they need, they will seriously limit their participation in these projects,” Heath believes.
This is matched by Premier Li Keqiang’s speech to the National People’s Congress: “We will improve military training and combat readiness.” The country will stand firm to safeguard its sovereignty, security and development interests. The Chinese military’s logistics and management systems will be upgraded more quickly and a modern weapons and equipment procurement system will be established.
Li urged that “authorities at all levels must support the development of national defense and the armed forces to ensure that the unity of the military and the government, as well as the unity of the military and society, remains solid.”
The 7.1 percent increase in military spending is noteworthy from several perspectives: First, it is rising faster than in previous years – after 6.6 percent in 2020 and 6.8 percent in 2021. And this is despite the Covid pandemic, a challenging global economic situation and massive troubles in the domestic real estate market. In addition, the 7.1 percent for the military is well above the targeted economic growth of 5.5 percent – and even more clearly above the 3.9 percent by which all other expenditures in the Chinese budget are to increase. This makes it clear that the leadership in Beijing is focusing on strengthening the armed forces this year.
Military expert Heath believes China’s military will invest in the development of ships and large transport aircraft. In general, the navy will receive a lot of attention. “In addition, they will want to improve the technological capabilities of the People’s Liberation Army, through more artificial intelligence and other digital technologies.”
The rising military spending of the People’s Republic is by no means a phenomenon unique to China. Rather, they are following a global trend that has recently accelerated significantly in China’s neighborhood. Quite a few experts already see a frantic arms race in Asia: India, for example, plans to spend around $70 billion on its military in the 2022-23 fiscal year, and Taiwan $16.8 billion – plus an extra budget of around $8.6 billion for missiles and a coastal defense system. And even pacifist Japan plans to spend $47 billion on its armed forces this year. The fact that China’s military spending is also rising in such an environment comes as no surprise.
But a comparison with the arms budgets of neighboring countries also shows that Beijing spends significantly more on its military: officially, $230 billion. In global comparison, only the US spends more money on its military, namely around $770 billion.
But China’s leadership is growing increasingly concerned about its neighborhood: There are repeated armed incidents on the border to India, and there are far-reaching territorial disputes in the South and East China Seas. In neighboring Afghanistan, there are fears of a resurgence of terrorism (China.Table reported). In addition, more and more anti-China alliances are being formed, such as Aukus or Quad (China.Table reported).
And last month, the United States presented its long-awaited Indo-Pacific strategy to counter China’s growing influence. Among other things, Washington wants to strengthen its relations with South Korea and Japan. A particular thorn in Beijing’s side, however, is America’s focus on Taiwan.
And so Li Keqiang did not hide Beijing’s plans on Saturday. He reiterated Beijing’s desire to resolve the “Taiwan question” once and for all – and to do so “within the modern era.” President Xi Jinping had already left no doubt that the reunification of China would be realized by the 100th anniversary of the People’s Republic in 2049 at the latest – if necessary by military force.
With Russia’s invasion of Ukraine and Russian President Vladimir Putin’s previous statements, there should be no illusions about China’s stance on Taiwan. No one can say they were unaware of Beijing’s plans. Li Keqiang told the National People’s Congress, “We will push forward the peaceful growth of cross-Taiwan Strait relations and the reunification of China.” He objected to “separatist activities”, Taiwan independence efforts, and – above all – foreign interference. “All of us, Chinese on both sides of the Taiwan Strait, should come together to advance the great and glorious cause of China’s revival.” To be sure, peaceful-sounding vocabulary is used here. Behind them, however, are thinly veiled threats.
The order in which the topics in the government work report presented by Premier Li Keqiang are addressed says a lot about the government’s priorities for the coming year. The report’s structure also reflects China’s balance of power. The influence of different policy areas is balanced with the concerns of the people, to which the government must respond to maintain social stability. The rule here is that the most important things come first.
First, a look back at the previous year: The economy, and not ideology for instance, was once again the top priority. Most important in this area was growth, which reached 8.1 percent. However, growth is only meaningful if it creates jobs and keeps prices stable. Unemployment was at 5.1 percent, and more than twelve million new jobs were created.
As the second most important area in his review, Li mentions innovation. He does not emphasize the innovation expenditures of the state, but those of the companies. Last year, they invested 15.7 percent more on research and development. The high-tech industry grew by 18.2 percent. Agriculture followed, where Li reported a record in grain production. Li praises the free-market reforms and opening to the outside world, which, interestingly enough, are still mentioned in the same breath, even though the country is physically sealing itself off while simultaneously trying to strengthen the market economy. Premier Li is particularly proud of the fact that, for the first time, China has over 150 million companies competing in the market economy.
It is followed by environmental protection. Particulate matter pollution in urban areas has dropped by 9.1 percent. Only then does Li emphasize the standard of living of the population in his speech. Disposable income per capita has risen by 8.1 percent. Other keywords: fighting poverty and renovating apartments and houses. And only at the end does Li mention the pandemic. The measures have been “consolidated,” he says very routinely. The military plays only a minor role in the speech.
But much more important is the question of how Premier Li will set the priorities in the new year. We list them here according to the order in which they were mentioned in the speech.
1. stable economic growth
Although Li expects higher tax revenues, the burden on private companies is likely to decrease in the future. The government wants to stabilize debt at 2.8 percent of GDP with a slight downward trend. A “cautious” monetary policy is planned. In other words, the money supply is to be kept on a tight rein. The central bank is to lower interest rates slightly to make it easier to manage shocks and crises. Beijing also wants to further decentralize budgetary responsibility. Local authorities will thus be given more control over how they procure money and what they spend it on. The bulk of investment will be left to the private sector. Overall, the government says it wants to “tighten its belt and keep its spending low for the good of the people.” These are all measures that are taken when the economy is not expected to slow down significantly. But Li will have to readjust, of course, depending on how the year develops.
2. strengthening the market economy
Here, Li’s focus is on tax relief and improving liquidity, especially for small and medium-sized enterprises. The government wants to provide jobs for the more than ten million students who are graduating from universities again this year. The issue of jobs keeps cropping up in different places, which highlights its importance for the government.
3. strengthening domestic economy
Another high priority – higher than foreign trade – is the development of China’s internal market for its own companies. In this area, Premier Li is primarily concerned with boosting consumption by “increasing the purchasing power” of the people. In addition, consumer rights are to be bolstered. Premier Li wants to achieve this by “streamlining and decentralizing the administration,” with the goal of “creating a market-based business environment based on clear laws”. The market-economy reforms of state-owned enterprises are to be accelerated. In other words, they are to receive less money. Private companies, on the other hand, should have an easier time obtaining loans.
4. strengthening innovative power of the economy
China wants to further expand its research and development capacities and promote companies that do the same, Li emphasizes. The goal here: “talent centers and innovation hubs of global relevance.”
For companies, this means that R&D investments “can no longer be deducted from taxes at 75 percent, but at 100 percent.” In addition, there are tax breaks for companies that invest in basic research. The expansion of 5G is to make even swifter progress.
5. promotion of regions
Li wants to better interlink China’s regions, balance their economic power and expand their infrastructure. In the process, he also wants to keep minorities and border regions in mind.
6. agriculture and rural regions
The most important news for farmers: The minimum prices for rice and grain will be raised. Premier Li wants to maintain the 120 million hectares of agricultural land while improving its quality. He wants to improve the management of environmental disasters and animal diseases. He also wants to “redouble efforts” in agricultural research. China needs to continue to fight rural poverty, Li said.
7. further promote foreign trade
In this area, Li wants to give smaller and medium-sized companies better access to export credit insurance. “New forms” of foreign trade are to be developed. Customs regulations are to be “simplified” and the logistics system expanded “to an international level.” International investment in China is to be encouraged, especially in medium- and high-end manufacturing, research and development, and modern service industries, as well as investment in the still underdeveloped central, western, and northeastern parts of China. New free trade zones are to be established. The Hainan Free Trade Port is also to be expanded – the only one mentioned by name. Li also wants overall to “create more business opportunities for foreign companies in China” – whatever that means. What is ominous about this is that this point is ranked much lower than the strengthening of domestic consumption. China does, however, plan to “deepen” exchanges in the RECP free trade zone, the largest in the world (China.Table reported). Li also wants to look into “reforming the World Trade Organization” (WTO). That is the only international organization mentioned in the paper.
8. strengthen environmental and climate protection
First, Premier Li mentions environmental pollution and the revitalization of ecosystems. Only then follows emissions reduction and “greater harmony between people and nature.” In 2022, the government wants to gradually work on achieving climate goals, following the principle of ‘first build up the new before tearing down the old.’ The report primarily mentions wind and solar power. Nuclear and hydropower, surprisingly, are not mentioned. Li wants to stop the “blind development” of energy-intensive projects at the same time.
9. improve the well-being of people
The first thing Premier Li mentions here is that improving the quality and fairness of access to education is still a major problem in China. Next, the Premier mentions improving the health care system. He promises to increase the state’s share of health insurance. But China also wants to expand retirement benefits. Interestingly, this point is mentioned last. An indication that the population’s discontent in this area is not as high.
The focus in these nine key areas of government policy for 2022 is thus clearly emerging: a more sustainable market economy, decentralization, innovation, and education. But the government simultaneously wants to keep a closer eye on debt. Social and regional imbalances are also to be reduced. Research and development, as well as the creation of enough jobs, are key. The freedom of Western companies is to be increased, and international economic networking is to be expanded. How this will work out in practice remains to be seen. However, the stronger emphasis on domestic consumption and the domestic economy is already noticeable.
“Shanghai is constantly changing, continues to build itself every day, never stands still,” above all, it is a city with many faces, says Fanny Hoffmann-Loss. She is an architect and project manager at the architectural firm Gerkan Marg and Partners in Shanghai. In her free time, she guides tourists through the city as a Shanghai flâneur: “On the one hand, modern high-rises and an enormous standard of living; on the other, old alleys and historic sites.
As a member of the Shanghai Flaneur, she experiences both up close. The organization has been around for 14 years now and was one of the first to offer tourist tours. She has been giving tours herself for about twelve years. “I really enjoy that. It gets me more in touch with the city.”
During city tours, she talks about the skyline, waterfront development and high-rises of the modern urban center. “These are mostly not sustainable,” Hoffmann-Loss says. On other days, she leads tours of the city’s past through parts steeped in history: old neighborhoods and row houses reflect the British and French colonial periods; monuments recall Shanghai’s Jewish history. ” 2,500 refugees came to Shanghai in 1983. It was the last place in the world to accept refugees without visas.”
This versatility is something her profession has in common with the city. The architectural projects would differ from the German ones, not only in their dimension, but also in their local identity. “Feng shui is very important here. Entrances are always located in the south. Buildings should generally not have too sharp corners.” Otherwise, the team stays true to their German GMP style, he said. “That’s the reason we’re so successful here in the country. Because it’s different.”
One of the projects that were recently completed involves the Huangpu River in the heart of the city. “The city is strongly influenced by its river, which flows through it. It is one of my favorite places. It also changes every day.” Through boat traffic, tides, unexpected visitors. “The other day I even saw water turtles in it.” The project from the so-called South Bund covers two kilometers of the 45-kilometer stretch of shoreline around the river, a promenade with cafes, surrounded by nature. “Walking along the river, with the old and new skyline in the background – I don’t know any other city that has that to offer.”
Hoffmann-Loss has known the city and its country for almost 30 years. She first traveled to Beijing in 1991, and two years later, she was drawn to the People’s Republic again for a Chinese language course. After that, she visited the country more and more often, mainly to see her parents. “Back then, everyone still rode bicycles, and after 8 PM, horse-drawn carts were allowed on the street to bring building materials. I had to bring light bulbs to my parents, who worked at the German Embassy in Beijing at the time, because there were only 20-watt bulbs to buy. It was awfully gloomy everywhere.”
She first came to Shanghai in 1996 for a study scholarship. Hoffmann-Loss studied architecture at the Technical University in Berlin. The move from Germany to a city like this was an adventure for the student. Not only because of the architecture, but also because of the whole flair, the atmosphere – and the ambition, already palpable at the time, to become one of the most exciting cities in the world. “The culture, the people, the vibrancy – it’s an incredibly beautiful and exciting place to study,” Hoffmann-Loss says.
Still, she was quite overwhelmed by the gigantic leap the city had made when she returned to China in 2004 with her husband – who is also an architect. Germany was in the midst of an economic crisis, and many people were losing their jobs. And Shanghai? Booming more than ever with life and opportunity. “The insane growth in major Chinese cities has rapidly increased the quality of life of its citizens and continues today, 15 years later. In Shanghai, unfortunately, this can also mean that a house you want to see is no longer there a month later.”
Fanny Hoffmann-Loss believes this is a major problem. “Because of the rapid modernization, the city is losing a lot of its old. The risk is that soon there will be nothing left of it.” There are only very few areas where the spirit of the past is still alive, she says. “Two or three entrances away from the busy streets, you suddenly find yourself in a village where the old people sit on their little stools in courtyards and alleys, peeling vegetables and watching over the children playing. That’s the old Shanghai.” In such places, the city retains some of its old charm. “It defines the city, to have a bit of both, the old and the new. I sincerely hope it preserves that.”
For this reason, the Ministry of Housing and Rural Urban Development announced a new directive at the end of August 2021. “Among other things, it mandates that in the future, existing buildings in inner-city areas may not be demolished on a large scale. New development in these areas may only have twice the area of the existing building and at least 50 percent of the resident population is to remain living in the immediate vicinity,” explains the architect. It remains to be seen how this will be implemented. Lisa Marie Jordan
Attention, trigger warning! After reading this text, you will see pigeons with different eyes during your next stroll through the city center. The times when you associated the T-word only with cooing and breadcrumbs should be over once and for all. So if you want to hold on to the perfect world of pigeons, you’d better turn a blind eye now and choose the next article.
Still here? Good. Then it’s time for a pigeon cesura. Because some flying objects that pretend to be harmless tourist pigeons actually turn out to be feathered sly dogs. Of course, the Chinese have long since recognized this and have woven corresponding warnings into the vocabulary. We are talking about the expression 放鸽子 fàng gēzi. Literally, it means “to let pigeons free/fly”, but in a figurative sense it also means “to stand up someone” or “to let someone down”.
There are various stories about where this meaning comes from. The first takes us into the Beijing pigeon-fancier milieu. Apparently, it has happened that flocks of pigeons did not return to their actual owner, but instead landed at competitors. And sometimes the scheme was carried out with the help of collaborating pigeons. Some shady breeders are said to have actually trained their birds to be “kidnapper pigeons” – so-called 诱鸽 yòugē (from 诱拐 yòuguǎi “kidnap, abduct”). These kidnap birds confuse other birds with insidious flight maneuvers and thus cunningly guide them into their own pigeon loft, leaving their original owner empty-handed, or empty-caged, rather.
Another possible explanation leads us to the old Shanghai gambling milieu. Here, lottery tickets with poor chances of winning were colloquially called 白鸽票 báigēpiào “white pigeon tickets”. For the wager of such washout tickets usually quietly flapped into the pockets of lottery operators and was never seen again.
Others say that the pigeon metaphor dates back to the days of the carrier pigeon (信鸽 xìn-gē). When someone eagerly awaited a letter, but only the bird arrived and not the letter, the recipient complained that only a pigeon had been sent (放鸽子 fàng gēzi), not the promised letter. The saying “to let a pigeon fly” is therefore said to have become the winged word for broken promises and missed dates. Either way, pigeons seemed to be unreliable in this case as well. By the way, the Chinese Internet community has taken the term even further. Today, they refer to influencers and Internet personalities who always run their mouths but ultimately fail to deliver as 鸽王 gēwáng “pigeon kings“.
Unfortunately, I must tell you that this is not all. If we continue to cling to the heels of the flying beast, we will be drawn even deeper into the world of human abysses. Sadly, the criminal underworld and mafia circles (黑社会 hēishèhuì) do not stop at human decoys. In criminal milieus, the term 放鸽子 fàng gēzi is a code word for when women swarm out as bait. As amusement ladies and prostitutes, they lure men into their clutches. And then, in the worst case, robbery and assault, even extortion of money and business secrets, await them in their nests. Of course, the whole thing also works the other way around. So our animal metaphor journey harbors a fair amount of turbulence, but I did warn you.
And, last but not least, 放鸽子 fàng gēzi is also a common word in the world of cybercrime. In reference to a legendary Trojan software (木马病毒软件 mùmǎbìngdú ruǎnjiàn) called “gray pigeon” (灰鸽子 huī gēzi), which allowed hackers (黑客 hēikè) to gain access to other people’s computers, “letting pigeons fly” is also used as a synonym for planting malware.
However, now that we have properly plucked the pigeon linguistically, it should perhaps be said for the sake of fairness that 放鸽子 fàng gēzi can of course also be used in the literal sense. For example, when releasing pigeons as a symbol of peace (和平鸽 hépínggē “peace pigeon”). So always look carefully at which pigeon you have in front of you, and keep your faith in the good in people.
Verena Menzel runs the language school New Chinese in Beijing.
