As China’s economic output has increased and its composite national strength has grown and its international influence has expanded, its “two sessions” legislative event — recently concluded for this year — has received increasing attention from the international community.
I would like to share my views on three issues in the event that are of concern to other countries.
First: Military spending
Since 2016, the country’s defense budget growth rate had been dropping. It remained in single digits for six consecutive years, with a growth rate between 6.6 percent and 8.1 percent. From 2016 to 2020, defense budget increases were 7.6 percent, 7 percent, 8.1 percent, 7.5 percent and 6.6 percent. Military spending growth this year is projected to be 6.8 percent, slightly higher than last year.
This growth trend reflects China’s principle of modest, moderate and sustainable military spending.
“Modest” means that in the absence of particularly significant changes in the national security environment, military spending will remain at a level similar to that of an average year and will not experience a sharp increase. In recent years, China's military spending has accounted for less than 2 percent of its total economic output, not only far below that of the United States but also lower than India’s.
“Moderate” means that military spending should meet the needs of effective military modernization and sustain China’s ability to meet the requirement to maintain national security, safeguard overseas interests, promote world peace and fulfill international obligations.
“Sustainable” means to coordinate national defense development with economic development.
Modest, moderate and sustainable military expenditures are compatible with China’s emphasis on a defensive posture. This not only effectively defends national sovereignty and security but also promotes the orderly and steady development of the economy and society, so it’s in line with China’s national conditions and fundamental national interests.
Second: New development pattern
Last year, at its Fifth Plenary Session, the 19th Party Central Committee accelerated the establishment of a new pattern of development that focuses on domestic circulation and features positive interplay between domestic and international circulations. Some analyses in the international community have suggested that the decision was made as a result of joint Western pressure on China and as a manifestation of China’s strategic contraction. This is understandable but not correct.
One of the things we need to know about the new development pattern is that it is about both expanding the domestic market and opening up wider to the world. It is a process of two-way interaction between domestic and international circulations. First and foremost, the new development pattern is an inevitable requirement for China’s economic and social development at a certain stage.
From the history of China’s economic development, the development mode — with investment and trade as the main drivers of economic growth — will gradually transform into a balanced three-wheel driver of consumption, investment and trade. Consumption will play a more important role as a growth engine. This development approach is also in line with the basic development rules of the world’s advanced economies.
Domestic circulation is designed mainly to realize the transformation and upgrading of China’s economic growth model based on the advantages of its big domestic market and large consumer population. In fact, since 2012, an important purpose of many major policy initiatives made by China, be it the Belt and Road Initiative or supply-side structural reform, has been to steadily improve its economic structure, industrial layout and growth drivers. Of course, external changes are also a contributing factor, though not the main ones.
President Xi Jinping has repeatedly noted that the world today is undergoing profound changes of a kind not seen in a century. This requires China to accurately understand, effectively respond and take the initiative. It means that China will scientifically judge and assess the international and domestic situation to better integrate its international and domestic interests, make full use of international and domestic markets and resources and proactively take measures to seize opportunities and address challenges.
Thus, the new pattern of development for China is fundamentally a proactive move by the country, rather than a mere response to foreign pressure.
Third: Sino-U.S. relations
The topic of China-U.S. relations is a must at the two sessions each year for the news conferences of the foreign minister and the Chinese premier. This year was no exception. However, this year the topic carried extra urgency because the United States has a new government. The Biden administration’s policy toward China is still unclear, and the future direction of China-U.S. relations is attracting more attention.
Over the past four years, the China-U.S. relationship has experienced tremendous challenges. The two countries each have their own views about the causes of friction. China sees the Trump administration’s assertive policy toward China as the main culprit, while the U.S. side believes it is the result of China’s aggressive foreign policy.
Logically, the U.S. holds the initiative in China-U.S. relations. Whether in the security, economic, technical or cultural spheres, it is the U.S. that has acted, while China has been forced to react.
Subjectively, China has always adhered to the concept of non-conflict, non-confrontation, mutual respect and win-win cooperation in its relations with the United States. However, the U.S. has used various means to interfere in China’s internal affairs and has been promoting values and ideological diplomacy against China with the apparent intention of launching a new cold war. All this seriously violates the UN Charter and the basic norms of international relations. Therefore, it is a well-founded conclusion that the main sources of the current dilemma in Sino-U.S. relations was the United States.
The new U.S. administration has brought hope for the improvement and development of Sino-U.S. relations. To be honest, the foundation and momentum for the development of bilateral relations is solid. This is true not only in terms of interests — note that the existence of a broad and solid relationship of interests between the two countries is well reflected by the trade volume of 4.1 trillion yuan, an increase of 8.8 percent, in 2020 — but also in terms of perceptions.
Indeed, the two sides agree on many issues. Both recognize, for example, that the biggest challenge they face is domestic. China is the largest developing country, and development is its top priority. The United States, despite being the world’s largest developed country, is also facing many domestic economic, political and social problems. Both countries also realize that only by dealing with domestic issues can they play a significant international role. Both believe that global issues are too serious and complex to be solved by a single country alone without international cooperation.
These are all important points of consensus for the development of the China-U.S. relationship. What needs to be done now is to take practical steps on the basis of consensus.
To promote the stable and orderly development of China-U.S. relations, China has repeatedly signaled goodwill and sincerity and offered constructive suggestions. For example, Chinese State Councilor and Foreign Minister Wang Yi proposed that three lists should be established for China and the U.S. — a list for cooperation, a list for dialogue and a list for control — which is indeed what is urgently needed in the current relationship and what the international community expects. The U.S. should respond positively to this, instead of using so-called “strategic patience” as an excuse to deliberately build a camp of allies against China. This is not the proper role of a responsible power, and will not help.
Recently, President Biden said, “Let's get to work,” on interim national security strategic guidance. These words are also timely for China-U.S. relations.
Now there are expectations that the high-level China-U.S. meetings in Alaska will bring new hope to China-U.S. relations. We shall see.
