Here’s What We Learned From China’s National People’s Congress

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(Bloomberg) -- Chinese President Xi Jinping capped this year’s National People’s Congress by securing a third, norm-defying term in office and shaping some of the policies that will steer the world’s second-largest economy through the year ahead.

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From Beijing’s aggressive stance on US-China relations to its overhaul of some key features of the nation’s bureaucracy, here are the key takeaways from the big political event:

Xi cements control of the country

Lawmakers unanimously voted to give Xi Jinping a third term as president, completing his ascension to supreme leader.

Several of Xi’s allies were appointed to key positions, including Li Qiang as premier. Li had been the front-runner for the job since he was named the party’s No. 2 in October.

The cabinet had few new faces, though. Almost half of the 26 officials in the lineup have been in their positions since 2021 or earlier, according to an analysis by Bloomberg.

Modest GDP target signals no major stimulus

The government set a relatively conservative economic growth target of around 5% for the year, suggesting there won’t be any large fiscal or monetary stimulus this year.

China also retained several of its top economic officials, including central bank Governor Yi Gang, in a sign of policy continuity. He Lifeng, a close Xi ally, was promoted to vice premier, putting him in line to possibly replace Liu He as the top economic policymaker in the country.

Beijing amps up aggressive US rhetoric

Xi made a rare, direct criticism of the US, saying China’s economy was being hindered by “comprehensive containment and suppression by western countries led by the US over the past few years.”

That sentiment was echoed by Qin Gang, the new foreign minister, who warned that soaring US-China tensions risk blowing past any guardrails in the relationship.

China prioritizes technological independence

Xi’s comments about US “containment” signaled a strategy by Beijing to strengthen the private sector and establish technological independence in the face of US efforts to restrict China’s development in technology. The president said China will take forceful measures to support the development of high-end manufacturing.

The bureaucracy was also overhauled as part of that sweeping push to make the economy more self-sufficient. Those plans include the setting up of a national bureau to police and protect data resources, and expanding the Ministry of Science and Technology’s role.

A new powerful financial regulator

China will set up a financial regulator to oversee all sectors except the securities industry. The current banking and insurance watchdog will be absorbed into the new national financial regulatory administration, while the agency overseeing the securities industry will be strengthened.

The People’s Bank of China will lose some of its functions to the new and enlarged financial regulatory body, leaving the central bank focused on broader economic and financial stability management. Economists said China’s model of financial regulation will now model Australia’s.

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