China to tackle economic, social progress at meetings

The opening of the 12th National People's Congress at the Great Hall of the People in Beijing last March. This year's NPC and CPPCC meetings come amid concerns over the economy, which faces slowing growth, overcapacity and volatile markets.
The opening of the 12th National People's Congress at the Great Hall of the People in Beijing last March. This year's NPC and CPPCC meetings come amid concerns over the economy, which faces slowing growth, overcapacity and volatile markets.PHOTO: EUROPEAN PRESSPHOTO AGENCY

Observers looking for clues to country's outlook and plans to address slowdown

Economic and social progress are expected to dominate the agenda when China opens two major political meetings this week, as the country makes its final push towards becoming a "moderately prosperous society" by 2020.

This comes as concerns swirl over the health of the world's second-largest economy, which faces slowing growth, overcapacity and volatile markets.

Observers will be looking to Premier Li Keqiang to provide clues on the country's outlook and plans to tackle these problems, when he presents the government's work report, growth target and budget at the opening of the annual meeting of the National People's Congress (NPC), or Parliament, on Saturday.

"There has been a lot of gloomy economic news, so there will be interest in this year's growth target," Peking University political analyst Zhang Jian told The Straits Times. "It indicates how well the government expects the economy to do."

China is likely to set the target at between 6.5 per cent and 7 per cent this year, with some experts suggesting that it might fix a range rather than a specific target, so as to have more policy flexibility. Last year's target was 7 per cent.

  • About the 'two meetings'

  • WHAT: The annual meetings of the National People's Congress (NPC), or China's national legislature, and the Chinese People's Political Consultative Conference (CPPCC), the country's top political advisory body. The two events are collectively known as "liang hui", or "two meetings" in Chinese.

    WHEN: This year's "liang hui" kicks off with the CPPCC's opening tomorrow and the NPC's opening on Saturday. The sessions are held in Beijing and are slated to end on March 16.

    SIGNIFICANCE: "Liang hui" is one of the biggest events on China's calendar. Attended by top national and provincial leaders, it will be scrutinised for plans and the projected outlook for China amid slowing growth. Delegates will also finalise the 13th Five-Year Plan, which kicks off this year, by the end of which China aims to achieve its vaunted goal of becoming a "moderately prosperous society".

    ON THE AGENDA:

    • Economy: All eyes will be on China's growth target this year, which gives an insight into the government's assessment of the economy. Growth will likely be placed at 6.5 to 7 per cent.

    • Overcapacity: China has made reducing industrial overcapacity a key goal this year, over concerns that it could lead to a wave of bad loans and firm closures. How it deals with the resulting unemployment in sectors such as coal and steel is another concern.

    • Inclusivity: The government wants to make growth more inclusive for Chinese citizens, in a country where income inequality has worsened despite years of swift development.

    • Defence: Given the economic slowdown, there has been speculation that China may slow its military budget growth. But others are predicting an increase because of the major reforms and upgrading in the People's Liberation Army.

    • Environment: After bouts of "airpocalypse" triggered unprecedented pollution red alerts in Beijing last year, expect the environment to still be a hot topic of debate.

The NPC meeting will be held in Beijing at the same time as the annual session of the Chinese People's Political Consultative Conference (CPPCC), which opens tomorrow. The CPPCC is China's top political advisory body.

High on the agenda this year is the finalising of China's 13th Five-Year Plan, designed to guide the country's economic and social development until 2020, by which time the government aims to have lifted every citizen out of poverty and established a "moderately prosperous society".

The NPC and CPPCC sessions are known collectively as "liang hui" or "two meetings", a major event on China's political calendar that sees more than 5,000 legislators and advisers descending on the capital.

High on the agenda this year is the finalising of China's 13th Five-Year Plan, designed to guide the country's economic and social development until 2020, by which time the government aims to have lifted every citizen out of poverty and established a "moderately prosperous society".

The target is important for the Communist Party's political legitimacy, but it will need to entail more inclusive growth in a country that has one of the world's highest levels of income inequality today.

The beginning of the Five-Year Plan also comes at a challenging juncture, with the country undergoing tough economic restructuring.

Human Resources and Social Security Minister Yin Weimin told reporters on Monday that 1.8 million workers in the coal and steel industries will likely be laid off as part of efforts to reduce industrial overcapacity, which the government has identified as a key task for this year.

Mr Li's work report could give more information on the specifics of cutting capacity, said HSBC bank economists Qu Hongbin and Julia Wang. "There could be more policy details on policies to cushion the impact (of cutting capacity), by boosting the fund available for social security payment, retraining as well as accelerating the pace of disbursement," they said in a research note.

The government's budget will also be scrutinised for its military spending. There has been speculation that China may slow military budget growth in tandem with the economy's, but other reports are predicting a sharp increase because of major reforms and upgrades.

Diplomatic issues that could be raised include tensions in the South China Sea and with North Korea and the United States.

Separately, China's ties with Taiwan and Hong Kong may be under the spotlight too, with a pro-independence government winning power in Taiwan, and the rise of localism and violent protests in Hong Kong in the past months.

Analysts say Chinese leaders and delegates could use the occasion to signal their views on the latest developments. "It will be interesting to see if President Xi Jinping chooses to visit the Taiwan or Hong Kong delegation, and what he might say to them," said University of Chicago political analyst Yang Dali.

And while the Chinese Premier usually takes centre stage during the NPC session, there has also been buzz about how much delegates might use the phrase he xin to describe Mr Xi as the "core" of the Communist Party's leadership.

The phrase, pushed by several provincial leaders since January, is seen as a move to elevate his status. "Typically, this shouldn't happen since this is not a party event," said Professor Zhang. "But Xi isn't your typical leader."

A version of this article appeared in the print edition of The Straits Times on March 02, 2016, with the headline 'China to tackle economic, social progress at meetings'. Print Edition | Subscribe