If everything goes smoothly, you won’t hear much out of China in the new week. And that’s the way its new leaders want it. Even though the world’s second largest economy officially seats a new president and premier, the beginning of China’s parliamentary session on Tuesday comes without the usual pomp and circumstance. Instead, China’s new leaders hope to show their own version of austerity. For instance, there will be no booze at official meals.
The party leaders want a sober beginning to their terms as the hope for a more sober Chinese economy. They want to avoid any significant pronouncements that could threat China’s gentle economic recovery. The country’s biggest trading partner, Europe, continues to struggle, tensions with Japan have been rising and Chinese workers have been demanding (and in some cases getting) pay raises. Chinese home prices have heated up again as the Beijing government moved late last year to stimulate its economy.
It came after China’s economy grew at its slowest pace in 13 years. The new government knows that its political stability depends upon a steady economy. With choking air pollution, a horrendous record on food safety and sanctioned corruption, the new slate of leaders taking their seats this week would like to reduce China’s reliance on exports to fuel its economic expansion, reassure its trading partners it wants to play fair and stoke a steady and sustainable rise of living standards.
Since early December as the stimulus efforts began, the Shanghai Stock Exchange index has shot up 21 percent. Electricity production is rising and manufacturing has rebounded too. But the political volume has been muted.
Tom Hudson is a financial journalist based in Miami. He is the former co-anchor and managing editor of Nightly Business Report on public television.