China’s two sessions: Brace for impact

All eyes will be watching China’s “Liang Hui” or “Two Sessions” of the National People’s Congress (NPC), China’s legislature, and the Chinese People’s Political Consultative Conference (CPPCC), the top political advisory body, as they meet in Beijing this week.

Mapping China’s future

This year’s meetings are particularly important, as an impactful institutional reform plan will be tabled, along with a Communist Party proposal to scrap the two-term constitutional limit on the state presidency and the nomination of key national leadership positions. These will have enormous implications for all multinational companies.

On the Agenda

  1. Ratifying the Government Report
  2. Ratifying the National Economic and Social Development Plan
  3. Ratifying the Constitutional Amendment
  4. Ratifying Reports of the Supreme Court and the Supreme Procuratorate
  5. Institutional Reforms (Government Restructuring and Leadership Reshuffle)

Specific details will be unveiled in the next few days, but the reform would likely see a thorough shakeup of various agencies across the Party, government, military and civil organizations and possibly the formation of a few “Super Ministries” in key strategic areas such as financial regulation.

The Two Sessions will also formalize the establishment of a new, more powerful anti-corruption agency, which will operate independently from any administrative body and would have the power to investigate all state employees. This would elevate the power and broaden the scope of President Xi’s anti-corruption drive. 

Implications for MNCs

For the first time in decades, the macro environment of China is undergoing profound changes. While the centralization of power will provide the political continuity necessary to push forward some tough reforms, the enhanced state control and supervision will likely give rise to new challenges and opportunities. MNCs are advised to keep a close eye on the changes pertaining to their sector especially in the finance, manufacturing, energy, technology, healthcare, environment and poverty alleviation areas. 

Preparing for Impact

Powell Tate Australia will provide a summary of the key outcomes after the conclusion of the Two Sessions. Upon request, we can also offer industry-specific analysis, stakeholder mapping, audits, narrative and messaging workshops for clients across a variety of sectors. For more information, please contact us at admin@powelltate.com.

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