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Key issues at China's NPC

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(Reuters) -- Key issues at China's annual session of parliament, the National People's Congress, which opened on Friday in Beijing:

Economy | Unrest | Banking | Taiwan | HK | Three Represents | Property | Rights


Delegates have many issues to keep them occupied.
Delegates have many issues to keep them occupied.
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China warns the U.S. against meddling in Hong Kong affairs.
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The Second Session of the 10th National People's Congress runs in Beijing from March 5 for ten days.

China boasts the fastest growing major economy in the world, but worries about resurgent inflation, bubbles in sectors such as property and steel and wants to moderate the pace of growth.

There is constant pressure from big trading partners for China to reform its fixed currency policy to better reflect the strength of the economy. It is also trying to reform big state banks burdened with an estimated $240 billion in bad loans.

State planners will reveal economic targets, the finance minister will unveil the budget and the central bank and bank regulators are due to hold news conferences at the session.


China's leaders worry over a rich-poor gap that has widened as the wealthy coastal regions and cities race ahead of the hinterland. Moves are afoot to boost rural incomes by cutting taxes and fees and by giving farmers more rights over their land.

In cities, the government is hoping private business can soak up millions of workers being laid off by defunct state firms and is pumping money into the "rust belt" northeast to try to revive industry there and head off frequent social unrest.

Banking reform

Crucial reforms of the debt-laden banking sector, perhaps the weakest link in the economy, will be charted, but new rescue plans are unlikely so soon after China injected $45 billion in foreign exchange reserves into two state banks to help them write off debts.

There could be criticism over the unprecedented tapping of the reserves, which did not require approval from parliament and sparked debate over moral hazard. There could also be calls to involve the NPC in decisions involving state funding.


China watchers will pore over Premier Wen Jiabao's every word on diplomatic foe Taiwan for hints of reprisals over the island's first referendum, alongside presidential elections on March 20.

China has been rallying against Taiwan President Chen Shui-bian's re-election bid later this month.
China has been rallying against Taiwan President Chen Shui-bian's re-election bid later this month.

Beijing views the poll as a move towards independence and has warned of war. But most analysts rule out military conflict in the near future and say Wen will be firm in his opposition to a separate Taiwan but soft in tone.

The premier delivers a speech at the opening of parliament on Friday and holds a news conference on closing day, March 14.

Hong Kong

Hong Kong will be high on the agenda, with heated debate on patriotism in the free-wheeling territory spilling into parliamentary discussions.

Beijing is worried about growing calls for democracy in Hong Kong -- highlighted by a march of 500,000 demonstrators in July -- fearing sentiment could spread from the former British colony to the mainland and escalate into demands for independence.

China took steps to boost Hong Kong's economy but has become increasingly strident against demands for more voting rights.

Three Represents

Jiang Zemin, who retired as president a year ago, is expected to join China's pantheon of socialist greats when his "Three Represents" political theory is enshrined in the constitution as one of the guiding principles of the nation.

The "Three Represents" says the Communist Party stands for advanced productive forces, advanced culture and the interests of the majority of the Chinese people. The theory paved the way for the party to admit entrepreneurs to its ranks.

Analysts said the move would expand Jiang's influence behind the scenes. The former party chief has handed both of China's top jobs to Hu Jintao, but is expected to retain his post as chairman of the state Central Military Commission -- the top military job.

Private property

As a nod to the role of entrepreneurs and the private sector, China is expected to amend its constitution to protect all kinds of private property obtained legally.

This will mean China putting private assets, seized by the ruling Communist Party after taking power in 1949, on an equal footing with public property -- a move seen as key to protecting wealth and sustaining economic development.

Some analysts see this as a significant step by a government keen to ensure its political philosophies are increasingly in tune with the realities of modern China.

Human rights

Legislators are set to amend the constitution with the phrase: "The state respects and guarantees human rights." Analysts say this may reflect a genuine recognition by the Hu-Wen leadership of the need to improve rights conditions.

But China's concept of human rights differs from international norms, focusing on social and economic rights rather than individual political rights. Overseas groups say it won't have a quick impact but opens the door for future change.

Copyright 2004 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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