China to Focus on Creating Jobs; Hong Kong Overhaul: NPC Update
China’s biggest political gathering of the year came to a close Thursday, with the National People’s Congress approving to overhaul Hong Kong’s electoral system and Premier Li Keqiang vowing to focus on creating jobs.
This year’s NPC gathering — condensed into half its usual two-week length due to coronavirus restrictions — showcased President Xi Jinping’s confidence after China emerged from the pandemic as the only major economy to expand in 2020. Over the past week, the government has laid out ambitious plans to overtake the U.S. in research-and-development investment and shift its capital-intensive growth model toward services and consumer spending.
What to Know:
- Click here for more coverage of this year’s NPC
- Full Reports from the NPC: Work on Legislative Affairs; Top Court
- A QuickTake explainer on the NPC
- Five-Year Plan by the Numbers
- Bloomberg Intelligence reacts to GDP; policy implications for banks
- A look at China’s green goals
- TLIV live blog of Premier Li’s press briefing
Latest developments: (Time-stamps are local time in Beijing)
Focus on Jobs (6:27 p.m.)
China will prioritize stable economic growth and the creation of new jobs as its main goals for 2021, with the nation needing sustainable expansion, not large fluctuations, Premier Li said during his annual press briefing.
“We would certainly be happy to see robust growth, but we are also keenly aware of the large uncertainty around the economic rebound in China as well as global economic growth and development,” Li told reporters in Beijing Thursday at the conclusion of the NPC. The growth goal of more than 6% “is not a low target,” he said.
Five Takeaways From China Premier Li’s Press Briefing
Killjoy Stocks (3:27 p.m.)
A surge in Chinese stocks on the last day of the NPC failed to prevent them from posting their worst performance during the event since 2009. The CSI 300 Index fell 2.9% over the week-long legislative meeting despite the gauge surging 2.5% Thursday, its biggest daily gain in two months.
An equity rout triggered by growing concern over liquidity tightening and possible asset bubbles cast a cloud on this year’s gathering, which was condensed into half its usual two-week length due to coronavirus restrictions. Despite gaining in the last two sessions, the benchmark stock gauge is still down 12% from a 13-year high reached on Feb. 10. With the NPC concluding, some investors are looking for buying opportunities.
Hong Kong Overhaul Approved (3:15 p.m.)
Chinese lawmakers approved an extensive overhaul of how Hong Kong chooses its leaders, a momentous step in Beijing’s efforts to curb opposition in the Asian financial hub’s political system.
The National People’s Congress overwhelmingly passed a proposal Thursday expected to change the size and composition of the body that picks the city’s chief executive, and have it nominate local legislators. The rubber-stamp parliament was also slated to call for establishing a mechanism to ensure candidates for elected office are “patriots,” remaking the only open elections under Beijing’s rule.
Takeaways for Commodities (11:12 a.m.)
China’s first attempt to chart a course to carbon neutrality by 2060 appeared underwhelming but the NPC still provided fodder for commodities investors. One is Beijing’s unwillingness to stretch out stimulus now that the recovery from the pandemic is almost assured, which is likely to dent optimism in the idea of a new supercycle. It bodes ill for ferrous markets, particularly given plans to reduce steel output to meet carbon goals, although metals with greener credentials like copper won’t be immune from restraints on spending.
China is taking a two-step approach to climate change that would limit emissions reductions before 2035, but leave most of the heavy lifting for later, when the impact on growth will have less of effect on a wealthier society and new energy sources such as hydrogen will be deployable.
Today’s Only Story (9:04 a.m.)
In case there was any doubt of its importance, the front pages of China’s major financial newspapers were plastered with stories about the annual political event. Also unsurprising was the positive tone of the coverage.
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