Stocks slip as China fails to announce new stimulus at Congress
BEIJING – In China, where every political decision is taken behind closed doors, the authorities attach extraordinary importance to the public set-pieces of the political calendar, such as the annual meeting of the National Peoples Congress, China’s putative parliament.
Sometimes the NPC pretends to debate issues that matter, even though they have been decided beforehand according to the will of Communist party leaders. (Read the Monitor’s coverage of the 2007 “rubber stamp” session here.)
This year, some officials tried to drum up a little media excitement in advance of Thursday’s opening of the NPC by dropping hints that Prime Minister Wen Jiabao would unveil a new and expanded economic stimulus package. Asian stock markets rose the day before in anticipation, but ended mixed Thursday after Mr. Wen offered nothing of the sort – just a rehash of existing policy. (Click here for the Monitor’s story on China’s $586 billion stimulus package announced last November.)
In his two-hour-long address, he devoted as much time to promises to create jobs, expand social security coverage, and pump money into the impoverished countryside as a Western politician seeking election, saying that such measures would help China reach its growth target of 8 percent. Wen doesn’t need votes, but he needs social stability. That is what this week-long People’s Congress is going to be all about.