China parliament examines growth, living standards

BEIJING (Reuters) - The Chinese leadership's efforts to engineer a trouble-free succession and push both economic growth and improved living standards in coming years move to the national parliament from Friday.

The annual full session of the National People's Congress (NPC) will open with a report by Premier Wen Jiabao, who with President Hu Jintao is entering the last stretch of a second five-year term steering the world's third-biggest economy. They are due to make way to a new generation of leaders from 2012.

Wen's speech in the Great Hall of the People will be as cautious as the Communist Party-controlled parliament, whose 3,000-odd delegates - officials, executives and workers and farmers -- are chosen and trained to keep their criticisms muted.

Yet Wen's report and the 10 or so days of discussions will also address strains worrying China, including fast-rising property prices, income inequality and a skewing of loans and investment to projects favored by local governments.

The attention and the backstage lobbying will give Hu and Wen, and a younger generation of aspiring leaders, chances to put their stamp on policy and consolidate influence, said Zheng Yongnian, director of the East Asian Institute in Singapore.

"This year and next year are going to be very important for succession politics and the two meetings are part of that," Zheng said, referring to the NPC and the Chinese People's Political Consultative Conference, an advisory body meeting alongside the parliament.

"The NPC is not that powerful, but it allows people to see what the agenda is and who is setting that agenda," Zheng said. "Who controls the policy agenda will enjoy a political advantage when it comes to succession issues."

"YOU CAN'T GET AWAY FROM GROWTH"

Attention will fall on Vice President Xi Jinping and Vice Premier Li Keqiang, the favored successors to Hu and Wen respectively.

Li is leading efforts to improve health care and food safety and his influence could be boosted by extra attention to - and possible spending on - those issues.

Provincial leaders hoping for a spot in the next central leadership could also court attention.

They include Bo Xilai, Party chief of Chongqing, who has orchestrated publicity by cracking down on mafia-like gangs in the southwest city, and Wang Yang, Party chief of the booming southern province of Guangdong. Both have cast themselves as forward-looking leaders with a popular touch.

Hu and Wen will also be looking to secure their influence by pushing improvements to welfare, health care and schooling, especially for China's 700 million-strong farming population.

"The key is that to fund these plans to improve public welfare you need to keep increasing government revenues, and that requires continued fast economic growth," said Mao Shoulong of the Renmin University in Beijing.

"You can't get away from the need for growth."

The parliament may discuss proposals for spending and policy goals in the next government five-year development plan from 2011.

Since 2003, Hu and Wen have vowed to transform China's economic model, easing dependence on heavy industry and exports to focus on grassroots growth and welfare.

"By ensuring those policy priorities are in the five-year plan, they can consolidate their influence beyond retirement," said Zheng, the Singapore-based researcher.

Their results have fallen short of ambitions. Many sectors and officials are committed to a recipe of industrial expansion they believe has worked and helped China escape a serious slowdown in the global economic downturn.

"It is very difficult to get change out of a political system that seems to be succeeding so brilliantly on its own terms," Barry Naughton of the University of California, San Diego, wrote recently for the China Leadership Monitor website.

Wen made a plea for his more populist plans last weekend, sympathizing with complaints about income disparities, rising housing prices, graduate unemployment, poor health care and registration rules hindering movement to and between cities.

"I'll spare nothing in exerting myself on my duties until I die," he told an online question-and-answer session. "When a society's wealth is concentrated in the hands of a few, then it is certainly unjust, and that society will be unstable."

State media reports have indicated that all those issues will receive attention at the session.

But the parliament affirms rather than makes policy, which is left to elite Party circles. Delegates suggest tweaks to settled decisions and China watchers expect few big changes to broad economic policy, currency management or spending priorities.

"We expect no change in the official macro policy stance, but expect some expenditure shift in the next budget", Tao Wang, an economist with UBS in Beijing, wrote in a report.

"We expect an increase in budgetary spending on 'livelihood' items, including cheap rentals, subsidies to the lower-income population, and social safety net." (Editing by Benjamin Kang Lim and Ron Popeski)

Posted in: World News