Five things to watch out for at China's National People's Congress

Neil Connor
President Xi Jinping and Premier Li Keqiang attend the opening ceremony of the Chinese People's Political Consultative Conference (CPPCC) 2017 in Beijing. - 2017 Getty Images

The annual meeting of China's legislature, the National People's Congress (NPC), begins at Beijing's Great Hall of the People on Sunday and will run until March 15.

The 3,000-member parliament has largely rubber stamp functions. However, statements by officials - particularly at the press conferences which are held on the sidelines - can sometimes reveal how China’s leadership is thinking.

Here are five things that observers will be looking out for.

Profile | Xi Jinping

1. Military spending

China's defence budget is usually outlined in the Prime Minister’s Work Report, which is delivered on the opening day of the NPC. In recent years, however, a senior official has revealed the figure at a pre-conference press gathering. 

Last year, China surprised many by announcing its lowest increase in six years. It said its military budget would grow by just 7.6 percent to 954 billion yuan (£113 billion).

Just a few days ago in Washington, Donald Trump's administration indicated it would seek a 10 percent increase in military spending to $603 (£491 billion). Tensions have been mounting in recent weeks between Beijing and a US president many in China see as being unpredictable.

China's defence budget announcement – which will be made in the 90th anniversary year of the founding of the People's Liberation Army (PLA) – should give an indication of just how concerned army chiefs are of Mr Trump’s plans for US forces.

NPC China - Credit: EPA

2. Donald Trump 

Observers are also expected to obtain a clearer picture of the diplomatic rivalry between the world’s two most powerful nations at a press conference held by China’s foreign minister, Wang Yi.

China refused to be drawn into open confrontation with Mr Trump after he made a series of provocative announcements on Taiwan, the South China Sea and trade.

Since then, Xi Jinping, the Chinese president, and the new US leader have held a “cordial” phone conversation, which has helped ease tensions.

But many believe China is still deciding how it should view Mr Trump and what measures it should take to uphold what Beijing calls 'major country relations’' 

Wang Yi, a veteran diplomat, might provide some clues when he meets the press.

National People’s Congress (NPC) | Explained

3. Economy 

China reported a 6.7 percent GDP growth in 2016 - the lowest level in nearly three decades, but still in-line with the prediction of 6.5-7 percent that was made at last year’s NPC.

Authorities are seeking to maintain economic growth above 6.5 percent until at least 2020, but many experts believe the world’s second largest economy is facing significant headwinds.

ANZ bank said in a research note that China may hedge its bets at this year’s NPC with a 6 to 7 percent prediction, while Bloomberg has suggested that the word 'about' may be inserted before a 6.5 percent forecast.

Raymond Yeung, Chief Economist Greater China at ANZ, said: “The reality is the Chinese economy has become more sensitive to global and domestic events beyond the government’s control, including the market reaction to its own policy actions.”

4. Hong Kong and Taiwan

The NPC comes at a sensitive time for Hong Kong, only weeks ahead of the election of a chief executive in the former British colony.

Concerns have been raised in the city over the erosion of the ‘one country, two systems’ principle, in which Hong Kong supposedly enjoys freedoms and a semi-autonomous status from Beijing. Officials could indicate which candidate they favour in the city’s leadership race.

China's Xinhua news agency has also suggested that observers will "expect signals" on ties between China and Taiwan, which last year elected as leader Tsai Ing-wen, who is from the pro-Independence Democratic Progressive Party (DPP).

Ms Tsai has refused to endorse Beijing's position that Taiwan and the mainland are part of a single Chinese nation, a position which Xinhua said has "hampered cross-Strait communication".

At a glance | The One China policy

5. Who will be promoted?

Five of the seven members of the Politburo Standing Committee – all except Mr Xi and Li Keqiang, the prime minister – are expected to step down after reaching the mandatory retirement age of 68 at this autumn’s Party Congress. Many new faces are also expected to be named within the 25-member Politburo at the summit.

The high-level political gathering, which is held every five years, will see Mr Xi and Mr Li being backed to continue for their second terms. But the Chinese president will also be seeking to ensure that after he stands down, which is expected to be in 2023, his legacy remains intact and that he continues to have influence within the party.

The NPC is a time for leading officials to make their cases for promotion - by showing obedience to Mr Xi.

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