China’s leaders face major decisions on reform at annual National People’s Congress

Jason Lee/Reuters - A military delegate from the Chinese People's Liberation Army looks back as he and others arrive at the Great Hall of the People for a plenary meeting of the National People's Congress.

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Washington Post | 5 March 2014

BEIJING — China’s military spending will increase by 12.2 percent this year, officials announced Wednesday at an annual meeting of top government leaders.

The budgeted $131.56 billion in spending comes after a year in which new Chinese President Xi Jinping has consolidated considerable power domestically and adopted an aggressive posture in foreign policy, particularly in territorial conflicts with neighbors.

Annual gathering of the National People’s Congress could bring clarity on intentions. 

On Tuesday, before the budget’s release, government spokeswoman Fu Ying rejected equating increased military spending with a more aggressive Chinese military. “China’s national defense power is defensive in nature,” she said. 

But in announcing the military increase Wednesday, Premier Li Keqiang vowed that leaders would “resolutely uphold China’s maritime rights and interests, and build China into a maritime power.”

And in a veiled reference to territorial disputes with Japan, he said, “We will safeguard the victory of World War II . . . and will not allow anyone to reverse the course of history.”

Last year, China expanded its military by 10.7 percent, making clear its national priorities even in the face of slower economic growth.

Chinese leaders also unveiled their projection for China’s economy to grow 7.5 percent in 2014, unchanged from the previous two years’ targets. The relatively modest projection after decades of runaway growth suggests that Chinese leaders are continuing to focus on growth in gross domestic product but also beginning to prioritize economic sustainability, environmental concerns and social stability.

The new figures came on the first day of China’s National People’s Congress, an annual parliamentary meeting comprising highly choreographed speeches, news conferences and rubber-stamp votes for initiatives laid out by the Communist Party. 

It is the first full meeting of China’s lawmakers since Xi outlined a wide-reaching plan for economic and social reforms last year. Experts are closely watching this year’s congress, which lasts until March 13, for clues about how and how far the party plans to carry out those promised reforms — to liberalize financial markets, rein in its powerful state-owned enterprises and tackle pollution, corruption and local government debt — especially in the face of considerable resistance. 

In November, China’s new leaders announced their most sweeping package of economic, social and legal reforms in decades, including a relaxation of the country’s “one-child” policy and the scrapping of the much-criticized system of labor camps.

The promised reforms suggested a new vision of China’s future as a country still firmly under the grip of the Communist Party but increasingly driven by market forces and willing to sacrifice continued breakneck economic growth for sustainable growth and environmental concern.

In Wednesday’s opening speech, Premier Li included specific measures for tackling pollution such as shutting down 50,000 small coal-fired furnaces, cutting down sulphur and nitrogen emissions from coal-burning power plants, removing old, high-emission cars from the roads and promoting cleaner diesel-fueled vehicles.

Li also acknowledged public worries about the sustainability of China’s economy, over-capacity production in some industries, food safety and social security for rural residents and the elderly.

In recent months, China’s top government think tanks have debated whether the country’s economic growth target for 2014 should stay at 7.5 percent or drop to 7 percent. Many urging a lower growth target argued that it is necessary in order to focus on executing much needed reforms.

China’s growth in the past year, while strong compared with that of many developed countries, is near its slowest pace since the Asian financial crisis of the 1990s.

“There was overseas speculation that China’s economy would have a ‘hard landing,’ ” and, as a result, Chinese officials took preventive measures, Li said. “We did not adopt short-term stimulus, increase the deficit or issue excessive currency.”

After a year-long anti-corruption campaign launched by Xi, government organizers made this year’s gathering more austere. Delegates will eat cheaper buffet meals without any liquor, according to a government spokeswoman, in a nod to leaders’ recent emphasis on frugality and anti-corruption.