Back to business as China plans May NPC?

Authorities in China announced on Wednesday that the annual National People's Congress is now scheduled to open on May 22. The NPC is one of the country's biggest political events, but this year's session was postponed due to the coronavirus outbreak.

The leadership of President Xi Jinping is eager to use the event to show the world that its response to the pandemic has been a success. All eyes are now on what kind of economic plans the leadership will announce at the NPC, particularly as the world's second-largest economy has been hit hard by the outbreak.

The NPC brings about 3,000 representatives from across the nation to Beijing to decide policies for the coming year. It usually begins on March 5 every year, but the 2020 session has been delayed for two and a half months.

With the announcement of the new date, authorities in Beijing lowered the coronavirus emergency level on Thursday from the highest alert to the second rung down.

People from other areas of China, except for Hubei Province, no longer need to be quarantined for 14 days upon arriving in Beijing. Chinese people may feel that life is getting back to normal. But things are not that simple.

The National People's Congress in 2019.

More than ever, this year's highlight is economic policy.
China's GDP growth fell deep into the negative in the first quarter of 2020. The economy shrank 6.8% from a year before. That's the first negative quarterly growth since 1992, when the country began releasing such data. Even after the global financial crisis of 2008, China managed to grow at more than 6%.

The government's earlier scenario of a V-shaped recovery is not realistic, as economies in China's key export markets in Europe and the United States have virtually ground to a halt.

The sharp drop in demand has seriously affected Chinese exporters. Some manufacturers that were able to restart production have had to close their factories and put employees on leave.

This footwear manufacturer closed its factory and put all employees on leave.

In addition, domestic demand also remains sluggish. The severe cooling of consumer sentiment has brought retail sales during the first quarter of 2020 down by 19% from last year.

It's not just manufacturing that's feeling the squeeze. Estimates suggest some 90 million people will travel within China during the Labor Day holidays from May 1 to 5. But the figure is almost half that of last year. And authorities are requiring tourist attractions to allow entry to just 30% of capacity to prevent mass gatherings.

Wide-ranging impact

Unemployment has also become one of the most pressing issues. The government reported a jobless rate of 5.9% in March. Some analysts are concerned about inevitable mass layoffs and social instability.

The situation is especially severe for university graduates. A record number of 8.74 million new graduates will enter the job market this year. Many companies have suspended job offers to new graduates to keep costs down.

Du Rui, a university student majoring in Japanese, says: "It's very hard to find a suitable job as many companies have reduced job offers to new graduates. Most companies hold interviews online due to the risk of infection, which makes me worried that I might not come across well or understand everything about the employment conditions."

She says some classmates have already decided to abandon looking for a job now and are instead aiming for graduate school.

University student Du Rui uses her tablet to look for a job after graduation, but is worried about finding a suitable position.

Different times, different response

China played a leading role in the global economy in the aftermath of the 2008 crisis. However, it's unclear it can do that this time.

During the financial crisis, Beijing rolled out a stimulus plan worth four trillion yuan, or nearly 600 billion dollars. But now, state-owned firms and local governments are weighed down by huge debts.

So the question is, how daring and proactive will the economic plans that President Xi Jinping's administration announces at the NPC be?

And China watchers are keeping a close eye on whether it will announce this year's GDP growth target at the opening session as usual.