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Special> NPC & CPPCC Sessions 2009> Latest
UPDATED: March 2, 2009
China's Parliamentary Sessions to Focus on Economic Downturn
The two parliamentary sessions -- the Second Session of the 11th National People's Congress (NPC, the top legislature) and the Second Session of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC, the top advisory body) -- are set to start March 5 and March 3, respectively

As the global downturn continues to take its toll on China's economy, responses to the turmoil will be high on the agenda of lawmakers and political advisors who are scheduled to gather here early next month for their annual full sessions.

The two parliamentary sessions -- the Second Session of the 11th National People's Congress (NPC, the top legislature) and the Second Session of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC, the top advisory body) -- are set to start March 5 and March 3, respectively.

NPC deputies and economic analysts said discussions are likely to focus on spurring domestic demand to maintain economic growth as exports slump.


China's export-dependent economy faces unusual hardship. Premier Wen Jiabao said last month that 2009 would be the toughest year so far in the new millennium for the country's economy.

Zhao Tao, deputy secretary-general of the Communist Party of China Central Committee's policy research office, said economic woes include plunging export orders, slower payments from overseas buyers, rapidly decelerating industrial output growth and a sagging property market.

Take Guangdong, which has the largest economy of all China's provinces and is the most export-oriented. Its exports accounted for more than one fourth of the country's total of 1.43 trillion U.S. dollars last year.

Last month, Guangdong exported 24.2 billion U.S. dollars worth of goods, down 23.6 percent year-on-year. In November and December, the declines were 5.1 percent and 6.8 percent, respectively.

Liang Yaowen, director-general of the Guangdong Foreign Trade and Economic Cooperation Department, forecast last month that Guangdong's exports might grow as little as 0.1 percent this year.

Nationawide, January exports plunged 17.5 percent year-on-year. It was the third straight month of contraction, after declines of 2.4 percent in November and 2.8 percent in December.

Export declines took some of the sizzle out of economic growth since exports, along with investment and consumption, are one of the three major factors driving the economy.

The National Bureau of Statistics (NBS) said Jan. 22 that in the fourth quarter of 2008, China's economic growth slid to 6.8 percent year-on-year, sharply down from 9 percent in the previous quarter. That was the slowest pace since the fourth quarter of 1999, when the economy grew only 6.1 percent as a result of the Asian financial crisis.

On a full-year basis, the NBS said China's gross domestic product (GDP) grew 9 percent year-on-year, the lowest since 2001, when an annual rate of 8.3 percent was recorded.

Breaking down growth by activity, the 9 percent included 4.2 percentage points from investment, 4 points from consumption and 0.8 point from exports, according to the NBS. In 2007, exports contributed more than 3 percentage points of the annual 13 percent GDP growth.


Beijing-based government economist Wang Xiaoguang said it might take three years, or even longer, for China's exports to recover, based on the world economic situation. China must rely more on consumption and investment over the next several years, he said.

Expanding domestic demand was both an emergency response measure and a long-term strategy for Chinese economic growth, he told Xinhua.

According to Wang, increasing domestic demand would partly offset the impact of plunging exports and prevent the downward economic spiral from continuing. Expanding domestic demand and adjusting the economic structure would also help the Chinese economy achieve more lasting growth.

Wang said that methods of boosting domestic demand would undoubtedly be a hot issue at the March meetings.

NPC deputy Pei Chunliang, who is also president of the cement producer Chunjiang Group based in the central Henan Province, agreed with Wang. "In the current economic environment, expanding domestic demand is one of the most important tasks for the country," Pei told Xinhua.

"Only if the Chinese economy grows stably and fast could the government solve such problems as creating more jobs and establishing a better social security network."

China still officially projects 8 percent GDP growth this year, a pace that many Chinese officials and analysts believe is the minimum needed to create enough jobs and maintain social stability.

Since October, the government has announced several aggressive measures to bolster domestic demand and increase investment. These included a 4-trillion-yuan (about 585 billion U.S. dollars) stimulus package, a plan to expand rural ownership of home appliances, support plans for key industries and the issue of 3G licenses, among others.

Even so, Pei said there would still be many difficulties in achieving 8-percent growth through increasing domestic demand, such as how to better tap the rural consumption market and spur private investment.

The two parliamentary sessions would provide the chance for lawmakers and political advisors to exchange views and make proposals, he added.

The government has pinned its hopes for an economic revival on stronger rural demand as exports fall. In its first policy document of the year, issued Feb. 1, the central government said the biggest potential for boosting domestic demand was in rural areas.

Pei, a farmer-turned entrepreneur, said more rural consumption would only occur if farm incomes rose, which was doubtful this year given the swelling ranks of returning jobless migrants and falling world commodity prices.

Official statistics indicate that more than 20 million rural migrants, 15.3 percent of the 130 million migrants working outside their hometowns, had returned home without jobs.

"Without higher incomes, farmers will certainly tighten their belt. So it is important to create more jobs for migrant workers. The government needs to do more, and so do enterprises. The problem is how," Pei said.

Pei has a specific interest in knowing when the economy might rebound, because he plans to build another cement production line at an estimated cost of 300 million yuan.


At recently-concluded sessions of provincial-level people's congresses and people's political consultative conferences, the expansion of domestic demand was a hot topic.

Lawmakers and political advisors offered motions and proposals, such as increasing regional cooperation, cutting corporate tax rates, raising investment in education and health and handing out consumption coupons.

At Beijing's parliamentary sessions in mid-January, organizers held a seminar for top city officials and more than 200 political advisors. They also offered suggestions on boosting consumption and encouraging investment.

Among the attendees was Li Zhe, president of the property developer Riverside Group, who proposed a "patriotic consumption campaign" to boost domestic demand under which the public would be urged to spend its entire income for a year without saving anything.

Combating the economic downturn and boosting domestic demand also got much attention at Guangdong's parliamentary sessions earlier this month.

"How to deal with the economic crisis and company closures are the most worrisome issues among deputies to the congress," said deputy Tan Yanhong, vice general manager of retailer Guangzhou Grandby Co.

Guangdong governor Huang Huahua said the province had been the hardest hit by the financial crisis, and this year it would have to pull out all the stops to boost domestic demand and increase investment.

(Xinhua News Agency February 23, 2009)

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