2. PLUS 33
CHINA PLUS: 2 SESSIONS IN REVIEW
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6
CHINA’S FLEXIBLE GROWTH
TARGET IN 2016
ACHIEVING MEDIUM GROWTH
TRYING TO CURE
THE HUKOU HEADACHE
NEW POLICY,
SAME OLD PROBLEMS
TWO SESSIONS:
OPINIONS OUTSIDE CHINA
E-COMMERCE
IMPROVING RURAL LIVING
CONFIDENCE IN
NEW ECONOMY
THE EV CHARGING
CONUNDRUM
DON’T EXPECT
A HARD LANDING
CHINA’S DEFENCE BUDGET
AMIDST ECONOMIC HEADWINDS
EXPANDING CONSUMPTION
BY UPGRADING SUPPLY
CHINA’S UNEVEN
PROPERTY MARKET
THE GREAT BALANCE
OF THE CHINESE
ECONOMY
FOOD SECURITY

3. 5PLUSCHINA4
GROWTH GROWTH
China’s Flexible
Growth Target
in 2016
P
remier Li Keqiang set China’s GDP
growth target at between 6.5 percent to
7 percent for this year. For the first time,
the growth target has been given as a
range instead of as a specific number. And for the
second year in a row, the Chinese government
has lowered the overall growth target.
In his annual government work report at this year’s
annual session of the National People’s Congress,
Premier Li Keqiang announced a flexible GDP tar-
get, calling it a reasonable growth range as China is
gearing up its structural reforms.
The main development targets for 2016 include
GDP growth of 6.5% to 7%, a CPI increase main-
tained at around 3%, and the creation of at least
ten million new urban jobs. Back in 2014, Premier
Li mentioned the “reasonable range” for economic
growth in the government work report of that year.
This year marks the first time that the concept has
been put into use for the country’s GDP target.
Dr. Bessma Momani from the Centre for Inter-
national Governance in Canada says the change
is noteworthy. Momani told China Plus, “I think
suggesting that there’s a flexible range rather than
a hard number is a good sign that the government
is more open to different interpretation of what
would be the final number.”
Likewise, renowned Chinese economist
Xiang Songzuo also believes that a flexible
GDP target is a good idea for the country.
Xiang noted, “I think that’s necessary. The
growth rate of GDP is not the top priority
for the Chinese economy. All these tradi-
tional sectors will be going down, we must
rely on infrastructure, rely on the new in-
dustries to push up growth. But I don’t think
the growing of the new sectors can compen-
sate for the decline of the traditional ones.
So it is rational for Premier Li to set up a
very reasonable or rational target of GDP.”
Aside from being rational, Asian Development
Bank Senior Economist Zhuang Jian believes
that such a concept will also help the govern-
ment, at all levels, steer the economy in the right
direction. As Zhuang explains, “Setting a range
for the target can help provide more chances,
more time to make structural changes. That will
ensure sustainable growth for China. You should
set a growth ceiling in order to avoid inflation,
but at the same time you should also ensure that
growth cannot be lower than necessary for ab-
sorbing or creating more job opportunities.”
Official statistics show that China’s economy grew 6.9 per-
cent year on year in 2015, its slowest annual expansion in a
quarter of a century. Therefore, structural reforms have been
highlighted as one of the country’s key economic tasks. GDP
growth rate is no longer a leading index by which to evaluate
development.
Xiamen Airlines CEO and NPC Deputy Che Shanglun
noted during this year’s session of the NPC that such an ad-
justment would enable local governments to focus more on
the key tasks. Che believes that, “Setting a certain rage for
the GDP target is more objective, more practical, and more
suitable to Chinese realities. It emphasises that economic
development should be of steadiness and of quality.”
6.5
- 7 PERCEN
TRANGE
Deputy Deng Sanlong, Director of the Forestry Bureau of
Hunan agreed, stating that the setting of a flexible growth
target, along with cutting overcapacity and promoting the
service industry, are part of the structural reforms that the
Chinese economy needs, and will help the country emerge
from its economic slowdown in the long run. “I think we
should have a correct view of the growth rate of China.
Though it is experiencing a slowdown, economic devel-
opment within China still ranks number one within the
world.”
In this year’s government work report, Premier Li Keqiang
did not speak lightly of challenges facing the country’s
economy. However, the measures listed by him exerted con-
fidence not only amongst NPC deputies, but also among a
number of foreign officials who were invited to observe this
year’s NPC session.
Canadian ambassador Guy Saint-Jacques was one of them,
and as he told China Plus during the NPC session, “Over-
all, I remain quite optimistic about the situation in China.
And of course, I will be following very closely everything
with regard to the economic reforms and how the Chinese
government aims to improve the economic situation.”
Suggesting that there’s a
flexible range rather than
a hard number is a good
sign that the government
is more open to different
interpretation of what
would be the final
number.

4. 6 CHINA PLUS
GROWTH GROWTH
7
Don’t Expect a
Hard Landing
T
he country’s top economic regulator
says there is no way the Chinese econ-
omy will suffer a hard landing, and the
elimination of industrial overcapacity
does not mean mass unemployment for the peo-
ple. Xu Shaoshi head of National Development
and Reform Commission (NDRC) said on the
sidelines of this year’s session of the NPC that de-
spite the slower pace of economic growth, China
is not in for a hard-landing.
According to Xu, “Even with a growth rate of 6.9
percent (last year), it still proved that the econ-
omy operated within a reasonable range as we
set our target at around 7 percent. Meanwhile,
employment growth was also stable as 13 million
more people were employed; over 3 million more
than the target we set. Income increased steadily
reaching a pace of 7.4 percent, faster than econom-
ic growth. CPI rose gently at 1.4 percent last year
while our environmental quality kept improving.
Therefore, I can say that our economy operated
within a reasonable range.”
Despite this, prior to this year’s sessions of the Na-
tional People’s Congress and the Chinese People’s
Political Consultative Conference, rating agency
Moody’s cut its outlook on China’s credit rating
from stable to negative.
Xu says the world should adopt a new perspective
when judging China’s economy, which is robust
and still has growth potential. He also refutes the
belief in some quarters that China’s economic slow-
down is dragging down the world recovery.
“The quantity of our imports is increasing steadily despite a
declining value,” Xu points out. He goes on to say, “Our im-
port value still ranks second in the world. Our outward in-
vestment is increasing. Last year, our non-financial outward
investment reached 118 billion US dollars, up 14.7 percent.
Our investment in countries alongside the ‘Belt and Road’
increased by 18.2 percent. This is also China’s contribution.”
Xu Shaoshi says the Chinese and global economies will be
confronted with challenges and difficulties in 2016, but
stresses that China has confidence in maintaining a stable
growth rate. As Xu points out, “In terms of economic
operation this year, we’re already well-prepared mental-
ly and all works are ready. We will focus on advancing
supply-side structural reform while enhancing consumer
demand moderately. We will continue to develop new
markets, invest in new areas, and generate new momen-
tum.”
Xu notes that China will also actively boost effective in-
vestment to shore up economic growth and help industrial
restructuring, stating that, “The central government plans
to invest 500 billion yuan this year. We will focus on key
areas and weak spots so as to support projects involving the
residential sector, grain and water conservancy, railways in
regions of central and west China, technological innovation,
energy conservation and environmental protection, educa-
tion, medical care, culture, sports as well as poverty relief.”
In response to concerns over job losses, Xu has stressed that
eliminating industrial overcapacity and economic transi-
tion will not cause mass unemployment, because, “Firstly,
although some of our enterprises are struggling, they are
taking effective measures to keep job positions. Secondly,
our economic aggregate is increasing. Therefore, every point
increase in our economy will drive more employment than
it could before. Thirdly, tertiary industry has more employ-
ment-producing power. Fourthly, mass entrepreneurship
and innovation are booming and creating more jobs. And
last but not least, the mobility of the labor force between
regions and industries is increasing.”
Xu adds that the central government is spending money to
help state-owned businesses to resettle laid-off workers and
in terms of global economic cooperation, the official says
China will step up exports of its advanced equipment and
production capacity to countries joining the China-pro-
posed Belt and Road Initiative.
O
fficials of the Chinese People’s Political
Consultative Conference (CPPCC)
maintained a confident outlook for the
Chinese economy during this year’s
Two Sessions, despite the challenges being faced in
the current economic transition. Wang Guoqing,
spokesperson for the fourth session of the 12th
National Committee of the CPPCC noted that
China’s economy is generally expanding.
As Wang stated during this year’s annual ses-
sions, “Viewed against the backdrop of the per-
formance of international economies, China’s
6.9-percent growth in 2015 is outstanding, and
the Chinese economy is expanding with good
quality. The fundamentals of China’s economy
remain sound. It is resilient, full of potential and
has ample wiggle room. The economic data in
January showed positive signs. So we’re confi-
dent in China’s economy despite the complicat-
ed world economic situation.”
China is on a painful journey of economic
re-balancing, trying to ditch its over-reliance on
manufacturing and wasteful investment in favour
of domestic consumption and services. However,
China still saw a 6.9-percent rate of annual growth
in 2015, accounting for about a quarter of eco-
nomic growth globally, following active and effi-
cient structural reforms to the country’s economy.
In such a context, Wang Gouqing says China is see-
ing good momentum in its structural reforms, noting
that China’s economy “still maintains a good trend
over the long term. Our economy still has tenacity,
and enough potential. Our economy still has a good
supporting basis and conditions. Our structural
economic reforms continue to advance forward and
these four factors make a difference.”
Wang Guoqing says China’s business environment
for foreigners has improved, not worsened, and the
government is firmly determined to build an interna-
tionalised environment featuring the rule of law and
facilitation of foreign investment. “I believe China
will continue to be the world’s popular destination
for investment and profit can be made here.” Wang
claims. He adds that, “Chinese leaders have reiterated
on recent international occasions that China will
create a good environment for foreign-funded firms
and protect their legal interests instead of altering its
policy of attracting foreign investment.”
Achieving
Medium Growth
Every point increase in
our economy will drive
more employment
than it could before.
Even with a growth rate of
6.9 percent, it still proved
that the economy operated
within a reasonable range
as we set our target at
around 7 percent.
Data from the Ministry of Commerce shows that foreign
direct investment in the Chinese mainland increased 6.4
percent and the number of newly registered foreign-funded
firms grew 11.8 percent year on year in 2015. During the
Two Sessions, Wang explained that advisors at the CPPCC
had considered how to encourage innovation and entrepre-
neurship and improve financial services, and made relevant
suggestions to the National People’s Congress, China’s top
legislature.
CPPCC National Committee member Liu Shijin said during
the CPPCC session that economic growth is a leading
concern among the public. “In the short term, people are
concerned about the current macroeconomic trend, as the
downward pressure is fairly large.”
Last year’s growth figure of 6.9-percent is part of what
authorities refer to as the “new normal” following
years of growth, which hovered in-and-around the
double-digit mark on an annual basis. There has been
debate this year about what level of growth rate would
be acceptable for China. Economist Jia Kang believes
that it is necessary for the country to prevent economic
growth from falling below 6.5 percent, adding that, “I
think the growth range of 6.5 percent to 7 percent is
acceptable. If the rate falls to less than 6.5 percent, we
will have to bring in measures to stabilise growth.”
Many economic observers have suggested a growth rate of
6.5-percent is needed in China in order to ensure that job
numbers remain at a reasonable level. Chinese President
and CPC General Secretary Xi Jinping is on-record saying
that annual growth of at least 6.5 percent will be required
in order to reach the government’s goal of doubling the per
capita income of people, compared with the level of per
capita income in 2010, in the next 5-year plan.
CPPCC member Jia Kang has predicted that the Chinese
economy is likely to bottom out at about 6.5 percent this
year before stabilising. At the same time, Huang Yiping, a
professor of the National Development Institute at Peking
University, says stabilising growth will require action. In
reference to academic concern, Huang noted, “What we
are concerned about is not simply the speed of economic
growth, but what measures will be needed for realising
basic economic growth.”
Huang says this will require that the government fol-
lows a basic principle of reform, namely, “Cut down on
excessive production capacity, leverage and inventories to
dry up excess capacity and reduce costs. The motivation
and the goals are obvious.” The country’s top lawmaking
body, the National People’s Congress, endorsed a growth
target of 6.5 to 7 percent for this year, as well as a more
proactive fiscal policy.

5. 8 9PLUSCHINA
UPGRADEDEFENCE
China’s Defence
Budget amidst
Economic
Headwinds
D
uring this year’s annual meeting
of the National People’s Congress
(NPC), China announced its small-
est increase in defence spending
of the last six years in the face of rising eco-
nomic headwinds and personnel cuts in the
armed forces. Officials from the top legislature
stressed that China must improve national
defence so as to enhance security and fulfil the
country’s obligations.
According to the budget report delivered the annu-
al session of China’s top legislature, Beijing plans to
raise the 2016 defence budget by 7.6 percent to 954
billion yuan, or about 146 billion US dollars.
NPC deputy Chen Zhou and an expert on national
defence policy and military strategy, explained
that though the rate hike between 7 and 8 per-
cent would be China’s lowest increase for defence
spending in six years, increased defence spending
must be a priority for the country going forward.
“No matter whether it is for the sake of se-
curity, for the need to meet the challenges
of military reform, or for the need to
deepen reform and fulfil our obli-
gations, we must unswervingly
increase our national defence
capabilities continuously, so
as to accelerate our techno-
logical innovation and break-
through and accelerate our building
of an elite combat force and promote our
army’s transformation from quantity-orienta-
tion to a focus on quality and efficiency.”
Chen believes that the development of China’s
national defence must be coordinated with the
development of the economy. As Chen ex-
plained, “Our country should determine the
scale of its defence budget, which should adhere
to the principle of coordinated development of
defence and economy. It should also comply with
the need of national defence and the level of the
country’s economic development.”
Chen says China’s defence budget has accounted for an av-
erage of 1.3 percent of the country’s GDP over the course of
the past decade, which is significantly lower than the world
average of 2.6 percent. Last year, China’s defence spending
amounted to only 24 percent of that of the United States.
Chen says that compared with other world powers, China’s
defence budget is rather low regardless of whether you look
at it in terms of a proportion of GDP, or in terms of civilian
per capita or military per capita defence fees. Military ex-
perts claim that the cut of 300,000 service people announced
by Chinese President Xi Jinping in September might also
have helped drive down the defence budget growth figure.
Whilst delivering the annual government work report,
Chinese Premier Li Keqiang stated that China will make its
military more revolutionary, modern, and better structured;
noting that the military works meticulously so as to ensure
combat readiness and control of China’s border, coastal and
air defences.
As a result, Li Keqiang has said that logistics and equipment
development will be stepped up and the military’s size and
structure will undergo reforms.
A
s part of the attempt to drive domes-
tic consumption and keep personal
spending from flowing outside the
country, Chinese authorities have
been instituting supply-side reforms. But how
are these reforms impacting the daily lives of
people in China.
In a city somewhere in China, a Chinese family sits
down for dinner together. They are discussing ar-
rangements for a party to celebrate their first baby’s
one month birthday. The grandmother, Tang Lina,
is also the sales director for two international com-
panies and as a result has bought almost everything
needed for the baby from abroad.
As Tang proudly explains, ”The cradle for the baby,
as well as its five prams, were bought from either
the UK or the US. I’ve never bought anything for
the baby at home. The only exception is the towel,
which I bought from a shopping mall in Beijing,
yet that was produced in Japan.”
Tang says she used to shop within China but now
prefers to go abroad because of the high quality
and relatively reasonable prices, free of tariffs. “If
the prices of the products at home were similar to
those in foreign markets, I would definitely do my
shopping here,” Tang laments.
And the question of tariffs is exactly what the gov-
ernment is working towards. In a speech delivered
during this year’s annual two sessions of parlia-
ment, Chinese Premier Li Keqiang said the govern-
ment would remove policy barriers, improve the
consumer environment, and safeguard the rights
and interests of consumers, as a means of changing
the trend towards high-end consumption.
Li stated, “We will cut import tariffs on some con-
sumer goods and increase the number of duty-free
stores. We will work to strengthen the growth
of consumption in elderly care, health services,
housekeeping services, educational and training
services, and cultural and sports services.”
Expanding
Consumption
by Upgrading
Supply
Cai Jiming, deputy of China’s National People’s Congress, is
responsible for reviewing the government work report. Cai
believes that the new policy will play a big role in expand-
ing domestic demand, telling China Plus that, “I agree with
adjusting our policies towards customs to attract more
people to spend money at home. That way, the contribution
of domestic demand to GDP growth will be substantially
increased.”
Investment and international trade used to be the two main
drivers of growth in the Chinese economy. Both sectors saw
a slump after the 2008 global financial crisis, prompting
China to move towards an economy where consumption
contributes more towards the growth in GDP; with varying
results. According to official statistics, consumption ac-
counted for 66.4 percent of GDP growth last year, repre-
senting an increase of over 15 percent compared with 2014.
Some experts claim that the figures show China is success-
fully making the transformation.
But not everyone agrees with that view. Professor Yin
Xingming of Fudan University in Shanghai, says China
still faces many challenges including a mismatch between
supply and demand, and an increasing income gap between
the urban and rural populations. According to China’s 13th
five-year plan, China will make efforts to transform itself
into a manufacturer of advanced and quality products, with
the scientific and technological sector set to contribute sixty
percent of economic growth.
As for the income gap, professor Yin says one solution
would be to provide more education opportunities for
people living in poorer, remote areas, so as to increase their
productivity and help them to get a better paid job in the
cities. As Professor Yin points out, “It is unlikely any low
productivity labour will be able to buy luxury products. So
the best way for the government is to improve labor quality.
In other words, the Chinese government needs to spend
more money on education for low-skilled workers.” The gov-
ernment plans to tackle this problem over the next five years
by a gradual expansion of secondary vocational education.
China still faces many
challenges including a
mismatch between supply
and demand, and an
increasing income gap
between the urban and
rural populations

6. 10 11CHINA PLUS
HUKOU
11
FOOD
C
hina’s household registration sys-
tem, or Hukou, determines where
a citizen can access public services
such as medical care, education,
and pensions. This has been a constant source
of grievance for many people within China’s
cities. Hukou reform was high on the agenda
earlier this year at the annual session of the
National People’s Congress in Beijing.
Song Ying, a white-collar worker living in Shang-
hai, moved to the city two years ago from Ningxia
Hui Autonomous Region. After some serious
effort, she was able to acquire a local hukou. As a
result, life has since become much easier for her.
As she attests, “It is far more convenient for me to
process documents, licenses and the such. And it
is easier to find a job because companies generally
prefer to hire candidates with a local hukou.”
Song is lucky; acquiring a hukou in a big city is
often next to impossible. According to the National
Bureau of Statistics, more than 8 million people
living and working in Beijing are doing so without
a local hukou. Yang Liu is one such person.
Yang spoke with China Plus about her desire to
gain that that elusive Beijing hukou, stressing that,
“A Beijing resident can enjoy many social perks,
which are not available to migrants. For example,
if I want to travel to Taiwan on my own, I simply
can’t when my hukou is from Hebei. I have to be a
Beijinger to do that sort of thing.”
Yang is not the only one who thinks this way. In
fact, social perks attached to one’s hukou are a big
selling point for most people and that inevitably
leads to problems.
Peng Xizhe, director at the State Innovative In-
stitute for Public Management and Public Policy
Studies at Fudan University, elaborates that, “We
think the hukou system is very important because
our social management and public services are
based on this system. Despite being originally
designed as a household registration system, it
became much more than that. In effect, you can get
different social welfare depending on where your
hukou is (issued). That causes problems.”
The central government has been searching for an overarch-
ing solution for several years but it has been a difficult issue
to address considering the pace of change within society.
NPC Deputy Cai Jiming suggested that government “can
first list the differences between local residents and migrants
in terms of housing, medical care, education, employment,
unemployment insurance, and pension relief. Then, we try
to abolish these distinctions one by one. If we can achieve
that, we can say mission accomplished.”
But Cai’s vision cannot be realised overnight. However, there
has been progress. Last December, provisional regulations
on residence cards started being implemented in Beijing. Du
Peng, director of the Information Centre for Ageing Studies
in Renmin University of China, claims that residence cards
contribute to social fairness.
He adds, “If I want to work in the city and I have a res-
idence card, I can get access to related information and
receive training. In other words, if residence cards can
guarantee more welfare gradually, hukous will eventually
become useless.”
On the broader issue of welfare in general, during this
year’s session of the National People’s Congress, NPC
Deputy Han Deyun called for action from the govern-
ment to “make sure migrants who have residence cards
can take their children with them and these children
should have access to education.”
This is a common plea from those who have moved to major
urban conurbations such as Beijing. Resident Zhou Zhao-
jun, who has lived in Beijing for 26 years, explains as much
to China Plus, pointing out that, “I now have a proper job
and I have also bought an apartment. The only thing that
bothers me is my children’s education.
In Beijing, if you don’t have a hukou, you cannot partici-
pate in the college entrance examination.” And although
the situation has not changed just yet, Zhou is optimistic
because the issue is now firmly on the government agen-
da. It’s simply a matter of time before wide scale changes
begin to be made.
Trying to Cure
the Hukou
Headache
D
uring this year’s National People’s Con-
gress (NPC) in Beijing, Chinese Agri-
culture Minister Han Changfu spoke
out at a news briefing and highlighted
the issue of safeguarding China’s food security as
a “strategic” goal. Han Changfu noted that food
security has always been and will remain a major
issue in China, a country with a population of 1.3
billion people. He pledged that authorities will
maintain a “zero-tolerance” attitude towards food
security issues and will spare no efforts to solve
problems no matter how minor they are.
“Basically speaking, we will continue to maintain a
tough stance on both production and supervision
procedures in a bid to ensure that people consume
quality-assured food. We should not only eat well
but also safely,” Han stated on the sidelines of the
NPC.
To that end, Han put forward several measures on
the issue including a tough crackdown on illegal
food additives as well as substandard pesticide
residues. In addition, some of the most hazardous
pesticides will be purchased under a real name
system starting from this year.
The country’s demand for food will remain high
in the long run as the population further in-
creases with the ending of the one-child policy;
as urbanization continues to progress; and as the
country’s consumption structure changes. Chi-
na’s grain output reached over 620 million tons
in 2015; the figure has increased for 12 consecu-
tive years. However, about one-fifth of the coun-
try’s grain output last year was actually imported
grains, amounting to around 120 million tons.
According to Han, the large amount of grain imports
resulted from structural demand and price competition.
“Grain from foreign countries is indeed cheaper than
ours; much cheaper. The scale of our agriculture is small
and the cost is high. So we don’t have any advantage
in grain prices. For that reason, we’ve imported a large
amount of grain.”
Han added that China will not seek a consecutive
increase in grain output during the next 5 years, but
authorities will consolidate and improve grain output
capacity. Furthermore, concrete methods will be taken
to improve China’s soil quality, as intensive farming in
certain Southern regions has left the soil vulnerable to
pests and diseases.
On this issue, Han said, “Firstly, we will control the input
to the soil. Secondly, we will treat contaminated soil.
The Agriculture Ministry, the Ministry of Finance and
the Hunan Provincial Government are taking collective
measures to treat heavy metal-polluted soil. Thirdly,
farms should let the crops lie fallow and plant in rotation
in order to reduce the pressure on the soil.”
As for the issue of international agricultural coop-
eration, China is actively encouraging enterprises
to invest in Russia’s far east region with a belief that
Sino-Russian cooperation could be deepened by en-
larging bilateral trade as well as enhancing research on
agricultural science and technology.
According to Han, “The two sides could launch joint
scientific research, promote more exchanges on achieve-
ments and technology, as well as train more professionals
from the other side. We expect more cooperation as long
as it is beneficial for bilateral agricultural development
and helpful to both peoples.”
You can get
different social welfare
depending on where
your hukou is (issued).

7. 12 13CHINA PLUS
New Policy,
Same Old
Problems
T
he newly-adopted two-child policy
was an important issue amongst law-
makers gathered in Beijing during
the Two Sessions, but it is unclear
whether families around the country are or
will be rushing to start larger families.
Song Qiuxia, a white-collar worker living in
Guangdong province, and her husband gave
birth to their first child last year. Despite
loving being a mother, Song is not enthusiastic
about the new policy, telling China Plus, “I
wouldn’t even consider having a second child.
Raising a kid can be very expensive. For exam-
ple, the kindergarten fees for just one semester
cost me an entire month’s salary.” Song is not
the only person to express such views within
the larger cities.
According to a survey carried out by the Popula-
tion Research Institute of Guangdong, only some
34 percent of 12,000 families included within the
sample would opt to have a second child. The
reasons against having a second child include
high costs, a lack of babysitters, as well as a
shortage of educational and medical resources.
However, these reasons are also the common
worries of those who plan to have or already
have had a second child. Li Kun is a case in
point. Li hopes that the government will help
with two things in particular now that she is
pregnant for the second time.
As Li explains, “The first one is longer maternity
leave. That way, children can enjoy their moth-
er’s company for a longer period of time. The
second is early childhood education. It is really
hard to find a decent kindergarten nowadays. I
experienced the problem firsthand when I was
looking for one for my first child. If there are
more formal and reliable nurseries and kinder-
gartens around when my second child arrives,
that would be ideal.”
It seems as though the government has received
the message loud and clear. How to better im-
plement the two-child policy was one of the key
topics during this year’s annual session of the
National People’s Congress, China’s top legislature. Chi-
nese Premier Li Keqiang shed a certain amount of light
on the issue when he delivered the annual government
work report at the opening ceremony of the NPC session.
As Li stated, “We will improve the supporting policies to
complement the decision to allow all couples to have two
children. We will encourage the development of kinder-
gartens open to all children.”
Kindergartens that are open to all children represents a
new concept related to early childhood education. NPC
Deputy Wang Meixiang explained this concept further,
noting that, “When the tuition fees of private kinder-
gartens are too high, it’s easy to see the significance
of open-to-all kindergartens, as they can help people
save money in kindergarten fees. Therefore, it is very
important for the government to provide subsidies to
develop this kind of kindergarten.”
However, supporting policies alone are far from enough.
Zheng Zhenzhen, researcher at the Institute of Population
and Labor Economics of the Chinese Academy of Social
Sciences, says that the initial challenge concerns changing
the mindset of prospective parents.
As Zheng told China Plus, ”We have to change the
traditional belief that it is better for one couple to have
only one child. This outdated mindset would destroy
our population’s sustainable development in the long
run. Although on the policy level, we have said good-
bye to family planning, the rooted belief cannot be
changed overnight.”
Changing the mindset may be difficult, but it is defi-
nitely achievable. Li Kun, for instance, did not want
to have a second child initially but as she explained,
“I changed my mind when I noticed my first child’s
need for a sibling. That is something we parents cannot
provide. Also, the two-child policy has been officially
implemented. I would love to give it a go.”
CHILDREN POVERTY
A
t this year’s National People’s
Congress (NPC), Chinese Premier
Li Keqiang officially set China’s
GDP growth target for 2016 to
range between 6.5 to 7 percent. While there
is concern around the world about a possible
hard landing for the Chinese economy, Park
Sung-joon with Incheon National University
in South Korea says the target growth rate
looks sound, pointing out that, “China has
projected its 2016 growth at between 6.5 per-
cent and 7 percent. It will be and it is a rare
growth rate worldwide nowadays. If China
aspires to build a moderately prosperous
state, it needs at least a 6 percent growth. So
the projection is reasonably achievable.”
The new Five-Year Plan also anticipates aver-
age annual growth of above 6.5 percent from
2016 to 2020; this would be the lowest in over
3-decades. However, Kerry Brown, professor
of Chinese Studies with King’s College in the
UK, says there is little need to be concerned,
provided the changes to the economic growth
patterns are managed properly.
Two Sessions:
The Opinions
Outside China
China Plus spoke to several academics outside of
China in an effort to gain a snapshot of opinions
abroad regarding this year’s annual sessions of par-
liament. In no way are the views represented here
representative of the entire academic community
within the expert’s respective countries, and such
views are only offered as an indicator into what
kind of discussion is going on outside of China.
Speaking to China Plus, Brown noted that, “China’s de-
velopment has two quite special situations. One is the
speed; the speed is much higher than other countries.
The other is the scale; it is on a larger scale. Anything
else is the same as other countries, but speed and scale
are the most important factors. The quicker the speed
is, the opportunity and ability to control development
will become weaker. So, this is a problem: How to con-
trol the change. However, at the same time, it needs to
change faster.”
The new Five-Year plan also places a special emphasis
on innovation. Stephen Perry, Chair of the 48 Group
Club, a UK-based NGO known for its commitment
to promoting the economic cooperation, trade and
friendly exchanges between China and the UK, says
the concept of innovation fits with the current eco-
nomic growth strategy.
“Innovation suggests transformation and change, and
always moving forward,” Perry told China Plus, “and if
leaders can accept that things will always be changing,
that there would be no plateaus, no stabilities, things will
always be moving into more and more stages of develop-
ment.”
Stephen Roach, with Yale University’s Jackson Institute
for Global Affairs, says the global economy will stand to
benefit from the changes in the Chinese growth model,
because, “If China is successful in creating a new mid-
dle class, a new consumer-led growth dynamic, that’s an
enormous new source of global aggregate demand for the
world and Asia to benefit from.”

8. 15PLUSCHINA14
HOUSING
15
HOUSING
F
luctuations in China’s housing market
were a major topic of discussion at this
year’s session of the National People’s
Congress (NPC). Reducing housing
inventories has been set as one of the five main
goals of the supply-side structural reform pro-
gram established at this year’s Central Economic
Work Conference.
Many deputies who attended this year’s National
People’s Congress recommended that any policy
shifts need to be based on local conditions. Calls
were also made to try to bring market speculation
under control.
The Communist Party of China Shanghai chief
Han Zheng, a deputy of the National People’s
Congress, has said that addressing the issue
in his city requires a dual-track approach. As
Han Zheng explained, “Because Shanghai has a
population of more than 24 million, we need to
deal with two different issues if we want to make
adjustments: These areas include the market and
the law. The local housing market in Shanghai
needs to be convinced so as to focus on allowing
people to find affordable homes.”
As for the legal side of China’s property market
machinations, Han says, “When it comes to the
law, we should be taking steps to try to ensure that
low-income families are given every opportunity to
access housing. Anyone found shutting people out
of affordable housing in an illegal way should be
punished. This is what will guarantee a healthy and
stable property market.”
Traditionally, housing in China has been con-
sidered a safe investment, compared to the stock
market or other high risk investments. While
the market has been sporadic, housing prices ap-
peared to have bottomed out in the second-half
of last year after declining for well over a year.
However, home prices in the southern Chinese
city of Shenzhen surged nearly 52 percent in the
first month of this year. Meanwhile, prices in
Shanghai increased close to 18 percent.
But while property prices appear to be rebounding in the
major centres, statistics suggest that the property market in
second, third and fourth tier cities in China have not kept
pace. The uneven recovery has prompted suggestions that
the government needs to take a more targeted approach to
its stimulus.
Speaking earlier this year during the National People’s
Congress, NPC deputy Lu Wei spoke to China Plus about
the concerns that many have at present with regard to the
future outlook of China’s property market in the bigger
cities. “Right now, inventory reduction should be focused
on the third and fourth-tier cities. In big cities like Beijing,
Shanghai and Guangzhou, efforts should be focused instead
on ensuring the properties that are available are affordable.
Steps need to be taken to try to prevent people from taking
advantage of broad-based government stimulus packages.”
Lu Wei is of the firm belief that supervision over this issue
is incredibly important, because, “If we open up too many
options, people are going to take advantage. This is going
to lead to another round of overheating in the property
market.”
Another concern raised during this year’s NPC was the
availability of financing. Huang Qifan, Mayor of Chongqing,
suggested that there needs to be regulations on non-bank
lending when it comes to down payments. As he pointed
out, “Property developers or their agents have been too
active in providing loans to home buyers to cover their
down payments. This could lead to a large-scale investment
bubble. We don’t want another situation like we saw in the
United States with the subprime mortgage crisis. Inventory
reduction and structural reforms are what’s needed.”
Ultimately, authorities are working on legislation to elim-
inate non-bank lending for down payments in China. The
subprime mortgage crisis in the United States saw com-
panies engage in predatory lending, convincing would-be
home-buyers with little equity to purchase homes on con-
tracts which would require a massive balloon payment after
a certain period of time. Credit defaults from this practice
were the stimulus for the global financial crisis in 2009. Chi-
na will attempt to avoid such a situation at all costs.
Tackling
China’s Uneven
Home Market
Recovery
Anyone found
shutting people out of
affordable housing in
an illegal way should be
punished.

9. 16 CHINA 17PLUS 1716
E-COMMERCE
16 CHINA
T
he task of building a more digitised
society was emphasised by central
authorities during this year’s Two
Sessions, and the efforts will not only
be confined to big cities. That is because this
year’s government work report encouraged the
introduction of e-commerce into rural areas.
Such encouragement led to heated debate
among political advisors, who attended this
years annual session of the Chinese People’s
Political Consultative Conference (CPPCC)
back in March, as to how introducing e-com-
merce into rural areas would guarantee farm-
ers a better life.
Mr. Zhang is a farmer living in Pinggu District
in the northeast of Beijing. Talking of his experi-
ences as a farmer, Zhang explains to China Plus,
“Farming in the past was mostly weather-depen-
dent. After harvest, the only thing I could do
was just wait for buyers. Sometimes I grew too
much, and the vegetables would rot in the field.
It always worried me.”
Limited choices, low efficiency and information
asymmetry, have long been the main shortfalls of
traditional Chinese agriculture. But Zhang says
things changed when he began using an online
platform to sell products.
As Zhang enthuses, “Now I can sell my prod-
ucts directly to residents in the city. What’s
more, we can grow the vegetables according to
their personal preferences.” A lot of work has
gone into optimising the agricultural industri-
al chain and encouraging people to start new
businesses in rural areas.
Earlier this year, e-commerce giant Alibaba
reached a deal with the National Development
and Reform Commission (NDRC) to work
together in more than 300 rural areas to help
develop e-commerce. While rural dwellers in
China are willing to spend online, many of them
are still relatively poor, which limits purchas-
ing power and ultimately means they have few
resources to invest in building a businesses.
National political adviser Liang Weihua is one of the stron-
gest promoters of introducing e-commerce into the coun-
tryside, noting that, ”During our field trips to remote rural
areas, we discovered that many of them were rich in terms of
agricultural resources and natural and organic products. But
they were limited by inaccessibility and transport hurdles,
and the lack of an information communication platform.
E-commerce will largely shorten the distance between com-
panies, costumers, and farmers.”
Liang also pointed out that the success of e-commerce
will help China realise its goal of lifting 70 million people
in rural areas out of poverty by 2020. In this year’s annual
government work report, Premier Li Keqiang announced a
fiber-optic networks plan, which includes a program, involv-
ing 50-thousand administrative villages, which will enable
rural residents to enjoy a more digital way of life.
During this year’s CPPCC sessions, political advisers includ-
ing Liu Hanyuan lobbied for the building of a big data plat-
form for the agricultural sector. As Liu explains, “Building a
big data analysis platform is necessary for balancing supply
and demand, and as a forecasting mechanism. The sharing
of information will lower the risk of price fluctuations, as
well as costs during circulation, and at the same time im-
prove efficiency.”
For a number of entrepreneurs, long-distance transporta-
tion, logistics costs and storage conditions for fresh products
represent big concerns. That is why, during the CPPCC
session, political advisers including Liang Weihua suggested
the need for a better logistics network. Liang also pointed
out that the government should play a better role in super-
vision.
As Liang told China Plus, “The development of e-commerce
also requires more regulations. We are living in an infor-
mation age, so a supervision mechanism is needed in case
a false or misleading message gets widely spread.” Though
the scale of online shopping in rural areas is still lower than
in the cities, political advisers and industry insiders believe
there is huge space for growth.
E-commerce
Improves China’s
Rural Living
Standards
Limited choices,
low efficiency and
information asymmetry,
have long been the main
shortfalls of traditional
Chinese agriculture.

10. 18 19CHINA PLUS
OPINION OPINION
On the 16th of March 2016, the 12 day secession of
China’s legislature ended and Premier Li Keqiang
met the press. The importance of this press confer-
ence lies in the fact that in the12 days prior to this,
China’s new five year plan was being fine tuned
by its legislature and this five year plan comes at a
time when the world’s second largest economy is
sailing through choppy waters in the wake of an
economic transition and a flagging global economy.
Li had admitted in his inaugural address to the leg-
islature that it is going to be “a difficult battle” but
in his press conference the Premier seemed much
more upbeat, primarily because of the successful
finalization of the five year plan.
Speaking to the reporters at the press conference,
the Premier highlighted growth targets, unemploy-
ment risks, corporate debt, new technology and
innovation, Sino-U.S. relations, and relations with
Russia and Japan. Most importantly, in the days
following, he emphasized that the economy, despite
facing challenges, is in no danger of a hard landing.
At the press conference a number of questions
were asked by various national and international
media outlets, including Reuters, Xinhua News
Agency, NBC, China News Service, Bloomberg
News, People’s Daily, China Radio International,
Spanish News Agency EFE, Phoenix TV, Russia
Today, China Daily, CTI Television Incorpo-
ration, China National Radio, Nikkei Business
Daily, and CCTV.
There is a famous saying regarding the relation-
ship between the US and the world economy, and
it goes like this: “If the US economy sneezes the
world catches a cold.” Similarly, when we see the
world’s second largest economy transitioning and
undergoing rigorous reforms towards a market and
consumer demand oriented economy, the economy
itself is bound to slow down and a few hiccups are
to be expected, as was the case with a few mild but
short lived scares in China’s stock market in 2015.
Just like the US economy, the world’s second largest
economy is also intertwined with the rest of the
planet. It is safe to postulate that, “If the Chinese
economy gets an itch, the world economy will get
the pox;” especially when China is responsible for
35 percent of the world economy. There is bound
to be a lot interest in China’s economy and its
transition and more specifically this new five year
plan. The Q&A secession covered a wide range of
questions concerning the Chinese economy.
Ranging from financial stability, meeting growth
targets, the China-US relationship driving the
global economy, pension funds, reforms and
layoffs, reforms and market access, issues in the
Asia-Pacific region, the issue of preserving cultural
relics, Hong Kong’s future, the new economy,
China-Russia trade relations, medical insurance,
government openness, social security packages and
grain prices including agricultural subsidies.
Li Keqiang answered all the questions in detail
and painted a clear path of how China is set to
Confidence in
New Economy

11. 20 21CHINA PLUS
OPINION
20
AUTO
achieve its annual economic growth targets while
at the same time the government is going to
strengthen its supply-side reform. The Premier
showed a lot a confidence in the government’s
capacity to anchor the economy “if it slides be-
low the appropriate range”. Aside from pivoting
policies to counter economic issues, the Belt and
Road initiative will provide a lot of support and
investment to advance the economy.
Regarding Sino-U.S. relations, Premier Li said that
China-U.S. cooperation is the key to benefitting
Asia-Pacific stability. Without cooperation and
peaceful dialogue, negotiations cannot take place
for a peaceful resolution and Premier Li said that
“China-U.S. relations will move forward regardless
of the U.S. election result.”
When Sino-Russian relations were touched upon,
the Premier explained that relations with Russia
have stood the test of time and will be unscathed
despite changing international situations. In refer-
ence to relations with Japan the Premier hoped that
“relations do not retrogress as bilateral ties have
shown signs of improvement.”
A lot of focus has been given in the government
report to the “new economy.” Li explained the con-
cept of the new economy and said, “We will foster
new growth engines to help promote economic re-
structuring.” Even though a lot of the world media
is skeptical of the economic conditions in China,
one should not get fazed by this negative skepti-
cism which is usually based on misinformation and
half truths. With China’s economic reforms gaining
ground a lot of positives have been observed.
Indeed the economy has slowed down but most
certainly there will be no hard landing because one
has to keep in mind that China is still a developing
country with a government with pockets that run
very deep. Hence, the word “developing” should
be enough for people to understand that there is
still tremendous room for growth and investment;
almost the entire western side of China is under-
developed and plans have been set in motion to
overcome this.
A lot of economists and experts talk about the hur-
dles and challenges which most economies faced in
the wake of transition from being manufacturing
driven to services driven and these economists ar-
gue that those economies went through prolonged
periods of busts before revitalizing. China’s case is
quite different because China’s economy is massive
and large scale economies with strong foundations
do not hit rock bottom abruptly; it takes time. One
can take the example of the US economy.
The US economy is the world’s largest economy and despite
facing many challenges in the recent past, due to the finan-
cial meltdown in 2008, it still hasn’t had a hard landing.
Similarly China’s economy is integrated into the world
economy and with the global economy slowing down it has
compelled China to switch off its after burners in order to
sail at a normal pace.
This slowdown is not a hard landing, but rather a shift in
gears designed to implement reforms. The major challeng-
es of transition include unemployment, bankruptcies, bad
debts and capital reappropriation. The Chinese government
certainly has some answers to these challenges because
comapred with China’s previous transition, its economy has
grown tenfold this time round.
The government’s pockets are much deeper, thus holding
the promise of a much wider social security safety net.
Furthermore, Premier Li pledged that a government fund of
15.4 billion US dollars could be bolstered if required, which
would lessen the impact of transitional hiccuops on the
ordinary Chinese citizens.
The Author: Shafei Moiz Hali has a master’s degree from
George Mason University, Virginia, USA in the field of In-
ternational Commerce and Public Policy. Mr. Hali has been
working as an Assistant Professor at the National Defence
University (NDU), Islamabad, Pakistan with the department
of Government and Public Policy Since 2009. Currently he is
pursuing his PhD from the College of Public Administration at
the Huazhong University of Science and Technology (HUST),
China.
The views expressed above are the opinion of the author
and do not neccessarily reflect the views of China Plus or
China Radio International.
A
t this year’s annual legislative ses-
sion in Beijing, political advisers
called for unified efforts in the new
energy vehicle industry in the hope
of making a breakthrough in the technology.
After failing in Beijing’s license plate lottery
system for some three years, Beijing resident
Qin Xiaofei finally made the decision in Janu-
ary to buy a battery-driven car to chauffeur his
pregnant wife around the city.
According to Qin, one of the biggest concerns he
has with his new car is finding enough charging
stations. As Qin told China Plus, “Up until now,
I find charging to be the most troublesome
aspect of owning this kind of car. All the parking
spaces in my community have been leased out.
Without a parking space, we can’t install our own
charging post and have to go to other places to
charge the car. And there aren’t many charging
stations in Beijing right now.”
Qin’s concern is shared by many drivers of
new energy vehicles in China. These concerns
have prompted local government authorities
to expand their existing charging networks. In
Beijing, for example, municipal authorities have
vowed to add another 5,000 public charging
posts throughout the city this year.
But, according to political adviser Ma Li, concerns
for the lack of charging posts and battery life have
stunted market growth. Ma believes that drivers
will only be content when pure electric cars have a
range of 1,000 kilometres on each charge.
Commenting on the current situation, Ma point-
ed out that, “Regardless of the type of new ener-
gy vehicle, cars should serve a practical function
first and foremost. One of the problems with
electric cars is their range, which at present only
reaches around 400 kilometres (per charge). People will
only be able to forget their concerns once the vehicles can
cover 1,000 kilometres on a single charge.”
Xing Lei, chief editor of top publication China Auto Review,
echoes that view, and notes that car makers are working on
batteries to further commercialise electric vehicles, noting
that, “Batteries account for pretty much 50 percent of the
cost of a new energy vehicle. So it’s the biggest bottleneck.
A higher battery density gives you a better range. So now
companies are working to reduce the cost of batteries, to
drive down the prices of the new energy vehicles themselves,
so that they could be more affordable in the future.”
Leading market players within China, like BYD, are seeking
to mass produce the key component and are making leaps
and strides in doing so. Sherry Li, BYD’s general manager
of public relations told China Plus, that BYD are making all
types of battery products that can be commercialised. “Our
new factory producing LiFePO4 batteries was put into pro-
duction last year. This is the largest type of lithium battery in
the world.” However, a breakthrough in the field may still be
far off despite the work of BYD. For this reason,
Ma Li spoke out during the annual two sessions and called
for a more unified approach to research at a national level.
As Ma says, “We have been asking for years that research on
fundamental and common technologies must be led by the
central government. They should establish a research insti-
tution specialised on batteries. When the research produces
concrete results, the government can sell this to companies.
It will also facilitate the setting up of unified standards for
products later on down the line.”
Despite his continued calls for a unified approach
backed by the central government, Ma believes the
outlook is bright evidenced by the fact that the Minis-
try of Industry and Information Technology, together
with nine private companies, are working to build a re-
search centre or common platform for batteries backed
by 500 million yuan of investment.
THE EV CHARGING CONUNDRUMTHE EV CHARGING CONUNDRUMTHE EV CHARGING CONUNDRUM
The word
“developing” should
be enough for people
to understand that
there is still tremendous
room for growth and
investment.

12. 23PLUSCHINA22
I
t would be impossible for me to side
with a view that we’re not able to meet
our major economic development target
this year,” said Premier Li Keqiang at
the two-hour long press conference at
the end of the yearly conference of the Nation-
al People’s Congress, the country’s top legis-
lature. The growth target aforementioned for
2016 is a range from 6.5 to 7 per cent, the first
time of a non-specific figure goal in decades of
Chinese economic history.
What’s at controversial is if the Chinese economy
will continue to record a robust expansion at a
time of great international uncertainty and strong
domestic headwinds. Some economists tend to
believe that, a slow-down in Chinese economy
is necessary or even unavoidable in the process
of structure reform - bankrupting unprofitable
enterprises, closing down factories burdened with
overcapacity, laying off surplus workers, cutting
back government debt levels, etc.
They are right in the sense that the Chinese econ-
omy is at a key stage of reform, which is in fact
more about rebalance. China is transforming its
economic model from relying on export and heavy
investment to one focusing on service industry and
domestic consumption. The understanding is the
latter model offers stable and long-term growth,
while the export business is current in trouble
when the rest of the world is still struggling in the
post-2008 financial crisis doldrums.
A balancing act is also required in regions with
different economic performances. For example, on
one hand, the northeast of China, the so-called rust
belt, is bleeding from a dwindling population as
well as struggling heavy industries. On the other,
you have regions like the city of Chongqing, which
recorded an impressive 11% economic growth last
year, compared to a national average of 6.9%.
A closer look at various industries also present
a mixed picture of Chinese economy. As point-
ed out by Premier Li Keqiang, some industries
such as the Internet and online shopping are
thriving as usual, while others like the steel and
coal industries are filled with zombie companies
- undead but still operating. How to take on the
zombies while at the same time further boost
the booming sectors of the economy necessitates
carefully-designed balancing policies.
The doubt about Chinese economic growth also
originates from the stock market crashes late last
year and the stability of the value of the national
currency RMB. The concerns finally dwells on the
Chinese government’s stewardship of economic transition,
which is considered a key to for China to move beyond the
so-called middle income trap. China needs to keep its eco-
nomic growing at 6.5% on average for the next five years, i.e.
the 13th Five-Year Plan, in order to materialize its long-term
goal of doubling per capita GDP between 2010 and 2020.
Speaking to global media, Premier Li Keqiang expressed his
confidence that “reform and development are not in conflict
… we’ll press ahead with cutting overcapacity while ensur-
ing there’re no massive job losses.”
The Chinese economy, said one renowned economist whom
I talked to, is certainly facing challenges like overcapacity
and deep debts held by local governments. But it is also true
that the economy is nowhere near the bad shape as suggest-
ed by world media headlines. The fundamentals speak for
themselves. For example, consumption accounted for some
two-thirds of China’s GDP growth in 2015. How strong is
the Chinese spending power? Here’s a good example carried
in local Australian news:
Speaking at the Australian Financial Review Business Sum-
mit Tuesday in Melbourne, Richard Henfrey, CEO of the
vitamin company Blackmores, said that sales of a Black-
mores Vitamin E cream were running at about 3000 tubes a
month. But that changed dramatically after movie star Fan
Bingbing was photographed with a tube in her handbag - by
the way, it’s not a paid advertisement. Within weeks sales of
the cream soared to 100,000 tubes a month. Today sales are
running at about 500,000 tubes a month and still growing.
When commented on the investment of other Australian
companies in China, Henfrey was surprised that others
had not followed in the footsteps of Blackmores. With an ex-
ceptionally high saving rate and the world’s largest foreign
reserve, China has rooms and tools to deal with economic
risks. Compare China’s fiscal and monetary resources to
that of Europe or the United States, whose interests rates are
nearly zero, China is at a much better position to keep rapid
economic expansion while continue to deepen structural
reforms.
The International Monetary Fund projected that Chinese
economy would grow at 6.3% in 2016. If that’s the case,
there’s little reason that China can’t reach it’s target growth
range of 6.5 to 7%.
Furthermore, theoretically speaking, the idea that a short-term
slowdown is unavoidable to trade for a long-term growth
doesn’t really hold water. Looking back at Chinese econom-
ic miracle one the past decades, the growth has always been
scored hand in hand with reform and opening up.
The subtlety may lie in which region or sector the growth
comes from and where the reforms are applied to. Therefore,
a grand test in rebalancing.
OPINIONOPINION

13. China Plus, a member of China Radio
International, is a comprehensive
provider of news and information,
covering a number of different platforms
including print, radio and digital media.
China Plus strives for quality and clarity
as part of its in-depth reporting of China-
related news, as such news relates to
Chinese people and to the wider world.
Editor-in-chief Stuart Wiggin
Design & Layout Stuart Wiggin
Executive editor Wang Lei