China’s ‘Two Sessions’ gathering for 2021 commenced on March 4, with the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC) meetings also marking the start of the 14th Five-Year Plan (FYP) period.
The government work report, delivered by Premier Li Keqiang, was structured into three major parts. Firstly, the report reviewed the government’s development goals and tasks in 2020, highlighting the response to the COVID-19 epidemic and the advancement of economic and social development in the country. Secondly, it set out major targets and tasks for the 14th FYP period ahead. And thirdly, the report detailed major tasks for 2021.
The work report reiterates the importance of creating a robust domestic market in the 14th FYP period, highlighting the prioritization of domestic economic “circulation” in the “dual circulation” economic development principle first introduced by President Xi Jinping. We can expect this doctrine to guide the direction of China’s economic planning in the coming five years. Of the two economic circulation components, the strongest focus is on the domestic cycle -- creating jobs, raising income levels in both urban and rural populations, and continuing to boost domestic consumption. The international cycle, relating to economic growth derived from engagement in foreign trade and investment, plays a complimentary role.
The work report also pays direct attention to the real estate market, upholding the guiding principle that home are for living in and not for speculation, and, for the first time, pledging to meet citizens’ housing needs and to address prominent housing issues in large cities.
We anticipate that the actions stemming from the objectives stated in the report will have benefits for China’s real estate market. In this update we interpret the work report’s key messages impacting China’s real estate market, with excerpts from the full text of Premier Li’s speech as published in the English language Report on the Work of the Government.