Focus on leadership ahead of China’s annual parliament

China's annual parliament, the National People's Congress, starts this weekend, and while observers don't expect radical developments before a pivotal Communist Party congress in the autumn, the meeting will give clues as to how Beijing will deal with Donald Trump's America.

About 3,000 delegates will gather in the Great Hall of the People, bedecked with red flags in classic communist style, and the rhetoric will teem with references to unswerving implementation of the latest Five Year Plan and Chinese president Xi Jinping’s position as the “core leader” of the party.

Communist terminology aside, growing trade tensions with the US have seen China emerge as a champion of global capitalism and globalisation, with Xi telling the Davos economic summit in January: "Pursuing protectionism is like locking yourself in a dark room, which would seem to escape the wind and rain, but also block out the sunshine and air."

This weekend's event is actually two sessions, the lianghui in Chinese. The National People's Congress (NPC) is the parliament while the Chinese People's Political Consultative Conference (CPPCC) is an advisory body.

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Each year, the gathering is attended by more than 5,000 cadres, entrepreneurs, the odd celebrity and other top representatives of Chinese society.

Attention will be on China’s military budget and how much of an increase is expected. Last year military spending grew 7.6 per cent, its lowest increase in six years, but since then China has come under international pressure over its ambitions in the contested South China Sea, and Trump is also planning to increase US military spending by 10 per cent.

Trump has suggested a tough approach on the South China Sea, saying he is "not happy" with China's competing claims with neighbours, including Malaysia, Brunei, the Philippines, Vietnam and self-ruled Taiwan.

There will be reference to reform, especially capital market liberalisation and reform of the public sector, but the focus will be on keeping things ticking over, which means a reiteration of the target of doubling gross domestic product (GDP) in the decade to 2020. This translates into the economy growing at an average 6.5 per cent until then.

Elite body

"There are not too many exciting topics to be discussed at the NPC this year," said Zhang Lifan, a Beijing-based political commentator.

“Environmental protection is a topic that might be raised, how to cope with smog. There might be voices still to be heard on that. The only decisions that will have any effect are made internally within the party.

“Another interesting area will be in regard to rule of law. Many lawyers have been arrested, and we can see if the delegates are supportive of this by reading the vote numbers,” said Zhang.

Xi will use the NPC to push continuity as he looks ahead to the 19th Communist Party congress in the autumn, a five-yearly event during which he is expected to further copperfasten his grip on power.

At that meeting, five of the seven members of the politburo standing committee members will retire. Xi and the premier, Li Keqiang, will retain their positions, but Xi is expected to populate the elite body with his own faction.

Delegates will also watch the NPC to see who is potentially in the frame to succeed him in five years’ time, and there will be close attention to promoted former subordinates and younger provincial and ministerial-level officials.

Traditionally Chinese communist leaders have ruled for 10 years, although rumours abound that Xi will extend his rule.

"It looks like Xi is not just looking at setting out stalls for his second term but to ensure his longer term legacy, for which he is laying down the groundwork for his control or at least influence beyond 2022," said Steve Tsang, director of the Soas China Institute in London.

“If I am right here, Xi will do whatever it takes to ensure things are all under control and himself looking pretty in the run up to the congress. Economic reforms or changes that can potentially throw up uncertainties will be pushed to the wayside until after the congress in the autumn,” said Tsang.

Trade issues

There have already been meetings of the NPC standing committee to make some advance personnel decisions and these show that Xi is keen to maintain his strong grip at the helm as he works to roll out his signature “One Belt, One Road” initiative to build an intercontinental network of infrastructure and trade links with China.

The appointments show he is adding muscle to the team that will deal with the US on trade issues.

Xi has appointed Zhong Shan as his international trade representative and vice commerce minister. Zhong became deputy governor of Zhejiang province in 2003, when Xi was party boss there, and since 2013 he has been China’s trade representative.

A tough negotiator, Zhong will face Trump's team of China hardliners such as commerce secretary Wilbur Ross, his choice for US trade representative, Robert Lighthizer, and trade adviser Peter Navarro.

Another close former associate and name to watch is He Lifeng, who has been named director of the National Development and Reform Commission, which sets macroeconomic policy. Formerly deputy party chief of the northern port city of Tianjin, He has ties to the president that date back to the mid-1980s and attended Xi's wedding to Peng Liyuan in 1987.