Changing Gears: The 10th National People's Congress

The National People's Congress of China is made up of almost 3000 delegates elected at the local level for a term of five years. It is the highest organ of state power and holds its annual meeting together with the Chinese People's Political Consultative Conference (CPPCC), which is China’s top advisory body. The NPC can amend the Constitution, propose laws, elect the country's highest officials. It also approves the country's social and economic development plan for five-year periods.

China's economy and how to narrow the gap between rich and poor regions were at the top of the agenda when the parliament held its annual session this March. Leftists raised questions about whether China's continued progress towards a market-driven economy is in tune with the plans to build a socialist countryside. The country seemed to be on the road towards capitalism but now some are suggesting that the pace of the reforms should be reduced, if not haltered. The parliament session closed with a vow to push ahead with economic reform while improving the lives of the country's poor peasants.

The parliament endorsed Chinese Premier Wen Jiabao's work report and the country's 11th Five-Year Plan almost unanimously. The report highlighted the country's new economic policies focusing on rural development and on science and technology. Wen says that the country will push ahead with a long term reform agenda despite the growing economic, social and environmental problems. "Although there will be difficulties in the way ahead, we must not stop ... Backpedaling offers no way out," Wen said. This year, the budget will include an extra $5.2 billion for schooling in rural regions, hospitals and crop subsidies.

The Five-Year Plan projected a growth rate of 8 percent for 2006, and 7.5 percent for the following five years. The parliament also ratified the central budget for 2006 and approved major increases to spending in the nation's military. The matter of Taiwan was also treated, after the cancellation of the unification board in Taiwan sparked dismay in Beijing. At the Congress, Wen Jiabao offered to open talks with the Taiwanese government. The Congress also tackled the problem of environmental pollution aiming for a 20 percent reduction in energy consumption and 30 percent in industrial water consumption.

Raising doubts

Wen Jiabao said that the country must persevere with opening up the nation. This view was met with opposition from Ji Baocheng, who is the president of Renmin University of China and a top economist. According to Ji Baocheng, the rush of the country's large State-owned enterprises to be listed on international markets has led to a significant loss of State assets and is a threat to the mainland's economic stability.

Li Deshui, the head of the National Bureau of Statistics, told Reuters last week that foreigners had gained a strong foothold in the Chinese economy and that the country should take measures to prevent more domestic firms from becoming run over by multinationals.

For the first time in years, some analysts sensed an internal debate at the Congress concerning the overall pace of reforms and the social inequalities they accentuate.

Two sides of the coin

Critics of the results obtained at the Congress have pointed out the fact that Premier Wen Jiabao seemed very compassionate towards his poorest countrymen but did not, in turn, offer any concrete and immediate measures that would help to improve their situation. Wen expressed his regrets that he had not found a way to better solve problems related to health care, education, housing and security.

The new Five-Year Plan plan marks a shift of economic policies from urban development and heavy investment to boosting rural and sci-tech investment in order to ensure sustainable development. These steps are perceived as an attempt to narrow the wealth gap between the rich and the poor areas and to maintain social harmony. According to experts this new plan is the first one emphasizing social and scientific development over economic growth. The problem seems to be how to balance the workings of a socialist system with reforms that are rapidly moving the country towards capitalism. What impact will the new guidelines have on the lives of ordinary Chinese?