The annual session of the Chinese “parliament” is underway: third appointment for Xi Jinping and more control over the economy
AND all ready for the start of the “two sessions”: The Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC), the approximately 3,000-member parliament of the People’s Republic, will meet in Beijing this weekend. The NPC session is expected to unveil the biggest cabinet reshuffle in 10 years. In addition to the confirmation of Xi Jinping as president for a third termLi Qiang and other Xi loyalists in the highest economic positions are expected to be appointed premier (Reuters sources speak of He Lifeng as vice premier and Zhu Hexin as governor of the central bank).
Xi, who is also general secretary of the CPC, has announced an “intense” reorganization of state and party entities. A condition which, according to experts, should deepen control of the party within state bodies. A greater grip on economic policy is expected, with the return of a central commission on financial policies that was abolished in 2023. Private individuals could therefore end up even more under the management of the Party and the State.
Along with policy and legislative proposals, i will then be announced central and local government budgets, military spending budget and economic growth forecast for 2023, which according to Reuters sources could fluctuate between 5% and 6%. In that case it would be an ambitious goal, capable of testing the new economic leadership led (most likely) by Li Qiang. In 2022, China’s GDP grew by 3% instead of the expected 5.5%.
The internationalization of the Chinese currency continues at full speed
Meanwhile, the Chinese yuan continues its internationalization process. A topic present today on the front page of Il Sole 24 Ore. The Chinese currency gained ground internationally in 2022 and is set to increase this year. London-based financial firm Standard Chartered Bank’s Renminbi Globalization Index jumped 26.6% last year, the largest year-on-year increase since 2018.
The index shows the use of the Chinese currency both cross-border and in offshore markets. Among the main reasons, explained a late January Nikkei article, the recovery of the Chinese economy and the launch of programs such as the trading of shares denominated in yuan in Hong Kong. Beijing is making important efforts in the internationalization of the renminbi: last year the yuan rose to fifth place of the most traded currencies in the world, from eighth position in 2019. Compared to 2021, moreover, the issuance of bonds denominated in yuan in abroad has almost tripled.
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