Beijing: Strained ties with the US, concerns over inflation and widening income gap, and how to rollback the economic stimulus measures will top the agenda of China's Parliament when it meets for its annual session this week.
The National Peoples Congress (NPC), scheduled to begin its meeting from March 5, will see the Chinese leadership spell out its broad economic, social and foreign policy goals for this year.
The NPC which has over 3000 members would begin its
meeting with the address of Prime Minister Wen Jiabao, whose
government is buoyant over the recovery of the economy that
grew at an impressive 8.7 per cent, coming in a year hit by
a world wide recession.
However, analysts have expressed concern over overheating
and rise in inflation as a result of last year's aggressive
expansion of credit induced as a stimulant to the economy.
"Many economists, inside and outside policy making, have
raised doubts over the sustainability of growth, saying the
recovery is not genuine as it was largely fuelled by
government's massive spending," The South China Morning Post
said.
It pointed out that the recovery came as Beijing embarked
on an unprecedented spending spree -- 4 trillion yuan -- to
keep the economy growing amid the global downturn.
Most analysts agree that top of policymakers' concerns
was curtailing inflation, asset bubbles and overcapacity, and
when and how to withdraw the economic stimulus.
"China is now experiencing a V-shaped recovery, but the
government's success at stimulating growth has begun to
translate into growing concerns about inflation," said Jing
Ulrich, JPMorgan's China Equities and Commodities chairperson.
Ahead of the NPC, the National Committee of the Chinese
People's Political Consultative Conference (CPPCC), the second
body of the Chinese Parliament begins its session tomorrow as
analysts and observers watch with interest.
The ruling Communist Party leadership has already raised
curiosity by elevating Panchan Lama, the young monk projected
as an alternative to Dalai Lama, to its membership, a move
seen as an attempt to step up campaign against the Dalai Lama.
Tom Orlik, a Beijing-based China analyst with Stone and
McCarthy Research Associates, said the problem for Wen's
government would be to "manage the withdrawal of the stimulus
without scaring the markets or pulling the rug out from under
the recovery".
Litai Xue, a columnist in the official China Daily said
it was a challenge for the country to tide over international
issues like the growing friction with the US.
"Enhancing its national strength depends on whether
Beijing can avert a collusion with the United States during
this time, a key point that is vital to its period of
strategic opportunity," he said.
China's relations with US have hit a rocky ground
recently, with Beijing fuming over Washington's arms sales to
Taiwan and President Barack Obama's meeting with Dalai Lama.
"External forces will do their best to contain China's
rise and severe tests including military struggles do exist in
the near future," he wrote.
PTI
First Published: Tuesday, March 02, 2010, 18:23