This episode covers China’s 2023 Lianghui (‘Two Sessions’), with comments from Jens Eskelund, vice president of the European Chamber; manufacturing and services activity in February; and imports and exports in January and February. From the Chamber side, the Tianjin Position Paper will launch and be available to download on 10th March.
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Full text of the 2023 Government Work Report:
China’s Official February PMI data (in Chinese):
Official foreign trade data January-February (in Chinese):
European Chamber Tianjin Position Paper launch:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
RUI: China’s 2023 Lianghui, the annual sessions of the country’s national legislature and top political advisory body, opened on 4th March. During the Two Sessions, major policy priorities are outlined, legislation is ratified and key personnel changes within the government are confirmed.
MARIANN: China’s outgoing premier, Li Keqiang delivered the government’s annual work report on 5th March, reviewing the progress made on the government’s development plans from last year and setting out the key priorities for the coming year. The GDP target for 2023 was set at around 5 per cent, and his presentation emphasised economic recovery and stability for the year ahead. Premier Li reiterated China’s drive for self-reliance in some strategic areas, including science and technology, and pledged that the country would continue its transition to sustainable green development.
RUI: Commenting on the business community’s reception of the newly announced economic targets is Jens Eskelund, vice president of the European Chamber.
Jens Eskelund: The economic targets announced for 2023 confirm to us what we have been able to see on the streets of China over the past few months. We have put COVID behind us, economic activity is picking up and we are confident that for many of us 2023 would be a good year. It’s important now when we have a little bit of tailwind that this opportunity is being used in the right way to make changes that will allow us all to go sustainable in the future. There’s still work to do in terms of opening markets, levelling playing fields, growing domestic consumption and promoting high-quality and sustainable growth. We hope that that also would be a big part of the deliberations at the NPC.
RUI: China’s manufacturing and services activity both continued to recover in February, with the pace of expansion exceeding expectations as business operations were getting back on track after a decrease in the number of COVID-infections across the country.
MARIANN: According to the National Bureau of Statistics, factory activity increased at the fastest pace recorded in almost eleven years, with 18 out of the 21 surveyed sectors registering expansion. While the largest expansion was seen among large enterprises, small and medium-sized companies registered the steepest rebounds last month, with their activity recovering to expansion territory after several months of decline. Services activity also continued to strengthen in February, with the rate of expansion the fastest recorded since March 2021.
RUI: China’s exports continued to drop in the first two months of 2023 amid weak global demand, and imports also fell sharply from the same period last year, according to data released by the Chinese customs authorities on 7th March.
MARIANN: In the January-February period, the value of exports shrank 6.8 per cent year-on-year in dollar terms, with the rate of decline easing from the previous two months. At the same time, the value of imports fell more than 10 per cent, which exceeded the rate of decline recorded in December. Data from the first two months of the year are usually combined to avoid any distortions caused by the Chinese New Year holiday, which always falls in this period. The official data also revealed that China’s trade with the European Union dropped 10 per cent in January-February, with exports from China to the EU shrinking more than twice as much as imports from the EU.
RUI: Tianjin is one of four cities in China with provincial status reporting directly to the central government. In the earlier years of 2000 it posted an annual GDP well above the national average. However, by 2021, the city fell out of the list of the top ten cities in terms of their contribution to GDP, a sign that it is falling short of its potential.
MARIANN: The European Chamber is launching the second edition of its Tianjin Position Paper on 10th March, which puts forward 20 constructive recommendations outlining how Tianjin can get its economic development back on track and further boost business confidence.
RUI: Join our event in Tianjin and download the Tianjin Position Paper from the Chamber’s website to find out more about how European companies operating in Tianjin see the situation on the ground, and what tangible steps they recommend the local government takes for the city to realise its potential.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.