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China’s Annual Political Gathering 2017


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The fifth and final session of the 12th National People’s Congress concluded with no significant change in policy direction. While there were few surprises in this year’s gathering, the meetings gave a fresh view on the priorities of the administration and the implications for those operating in China.

This year’s meetings are the warm up act to the much more important 19th Party Congress at the end of this year when Xi Jinping will end his first five-year term as head of the Communist Party of China and when a number of the most senior members of the Party are expected to retire. The question is not if Xi Jinping stays for a second term (that’s a certainty), it is who will join him in the Politburo and the Standing Committee as this will influence the next five years and give early indication whether he may break with recent precedent and stay for a third term (2022-2027).

In this year’s report we look at how the Chinese authorities are seeking to balance growth, economic reform, and stability. Last year, the authorities spelled out a desire to achieve growth and reform—including drastically reducing overcapacity—while ensuring stability and enduring minimal pain. Achieving this simultaneously remains extremely challenging. This year they talked extensively about the reform agenda and its role in ensuring long-term growth, yet the importance of stability leading into the 19th Party Congress later this year is potentially even more important. “Stability is of overriding importance,” stressed Li Keqiang. Other key topics at this year’s sessions beyond ensuring reform and continued growth included a focus on job creation and poverty alleviation.

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China’s Annual Political Gathering 2017

  1. 1. FifthSessionofthe 12th NationalPeople’s Congress March 2017
  2. 2. © Brunswick | 2017 | Thejust concluded National People’s Congress (NPC) and Chinese People’s Political Consultative Congress (CPPCC)gave a fresh view on the priorities of theadministration and the implications for thoseoperating in this ever complex market. TheTwo Sessions, held in March and commonly known in Chinaas thelianghui, are among themost important events in theChinesepolitical calendar. This year theTwo Sessions are the warm upact to themuch more important 19th Party Congress at the end of thisyear when Xi Jinping will end hisfirst five-year term ashead of theCommunist Party of China and when anumber of themost senior members of theParty are expected to retire. The question is not if Xi Jinping staysfor a second term (that’s a certainty), it iswho will join him in the Politburo and theStanding Committee asthiswill influence thenext five years and give early indication whetherhe may break with recent precedent and stayfor a third term (2022-2027). Key topics at thisyear’s sessions included ensuring reform, continued growth, job creation, and poverty alleviation. There were few surprises. Instead discussions focusedon moving forward directives already agreed. Key observations from thisyear’s gathering are below. Afuller analysis follows. Stillgrowing Growth hasslowed. But,atarget of 6.5% for an economy of more than USD 11 trillion represents adding more thanSwitzerland to theworld thisyear or more thanGermany over thenext five years (assuming the country continues at thisrate). Chinais open TheChinese authorities would have it thatChinais one of theworld’s most open economies and thebastion of globalization. Yet,stories abound of unfair competition, protectionism and operational challenges in-market. The truthremains somewhere in between. Thedoor is not closing to foreign investment. China will continue to open upand thelatest Two Sessions talks about new areas of liberalization. Thecatalogue of industries open to foreign investment will be revised and trials granting market access based on anegative list will be accelerated. The reality, however, isthat some sectors are more welcoming thanothers. It remains important to understand how foreign investors align with national development goals and can tackle challenges. Communicating thevalue one brings to China isparamount. ChinaGoingGlobal Chinesebusinesses will continue to seek expansion overseas. However, tightening capital controls and greater scrutiny of investment outside investors’ core business will impact the pace of investment in thenear term. Supply-sidereform Supply-side reform will be afocusin theyear ahead, most notably in the shape of simplified and streamlined administration, tax cuts,expanded market access, and innovation. On the faceofit, theseshouldbe positives for investors. Butwhile reforms should help growth, theydo not represent a serious challenge to theovercapacity and inefficiencies thathave plagued many old pillars of theeconomy— from petrochemicals to steel and coal. Geopolitics Ameeting between thepresidents of Chinaand theU.S. may happen as early asApril. Yet relations remain strained and will likely remain thatway even after ameeting of thepresidents. Both sides have statedthattheydo not want atrade war. While stressing this,Li Keqiang issued aveiled warning thatif atrade war erupts that“the first to incur losses would bethe foreign investment companies, in particular the US-funded enterprises.” Potentially more pressing is managing issuesin theKorean peninsula. The Belt and Road TheBelt and Road Initiative hasso far been long on rhetoric and short on tangible achievements, but theseare early days in along-term initiative. Theinitiative was unveiled in 2013 and aims to connect Chinawith Europe, the Middle Eastand Africa along the ancient Silk Road land and searoutes. Asignificant government endorsed forum focusedon theBelt and Road will be heldin mid-May and is being positioned as anew chapter. Thelong- term impact of thisinitiative should not be ignored. HigherQualityProducts Companies selling in Chinashould pay attention to Premier Li’s call for more products sold in China to be produced on thesame production lines, meet the same standards, and be of thesame quality as thosefor export. Disparities in product quality havehistorically been called outby consumers in China. Stability Achieving theHoly Trinity of growth, reform, and stability remains extremely challenging. Intherun upto the19th Party Congress at theend of thisyear the authorities will balance reform and growth with ensuring stability. Seeking Growth, Reform and Stability 2
  3. 3. © Brunswick | 2017 | Increasingpowerof Xi Since Xi Jinping became head of the Communist Party of Chinain 2012 much hasbeen written about his systematic increase in power. In October last year hewas anointed “core” leader of theParty, cementing hisposition at thetop of theParty and effectively confirming hisconsolidation of power. The term was originally coined by Deng Xiaoping in 1989 when hestatedthat every leadership team must havea core and thatif thisis undefined theteam will be weakened. Whilethelatesttitle is largely symbolic, thedesignation isan important signal thatXi Jinping stands above hispeers. Speeches and documents from this year’s Two Sessions paid increased tribute and reference to Xi Jinping, reaffirming thiselevated status. Premier Li Keqiang started his opening remarks thisyear noting thatXi Jinping was at thecore of theParty and that this“reflects the fundamental interests of the Party and the Chinese people.” Thetiming of thedesignation as core leader, one year before theend of Xi Jinping’s first five-year term as headof theParty, isimportant as it increases Xi Jinping’s ability to influence personnel appointments. Thepast fewmonths havealready seen personnel changes in government and Party posts. This includes theheads of theNational Development and Reform Commission and theMinistry ofCommerce who are now led by close associates of Xi Jinping—He Lifeng and Zhong Shan, respectively. Over thecoming months expect continued political jockeying asrising stars and protégés are positioned ahead of the19th Party Congress. Xi Jinping and theadministration have been criticized by some for alack of substantive progress on thereform agenda. To be clear, western style political reform wasnever on the agenda. But,even thedegree of economic and social reform hasbeen slower thanmany hadhoped. The optimists hopethat aftera first term consolidating power and addressing vested interests who stand to lose out from amore ‘market-driven’ economic approach, thatasecond term will see more substantive actions. Time will tell. The Two Sessionsin Review 3
  4. 4. © Brunswick | 2017 | IfChinese politics is astory of balancing contradictory priorities, then there isperhaps no better example thantheattempt to achieve theHoly Trinity of growth, economic reform, and stability. Atlast year’s Two Sessions, theauthorities spelled out a desire to achieve growth and reform— including drastically reducing overcapacity—while ensuring stability and enduring minimal pain. Achieving thisHoly Trinity simultaneously remains extremely challenging. This year’s meeting talked extensively about thereform agenda and itsrole in ensuring long-term growth, yet the importance of stability leading into the 19th Party Congress later thisyear is potentially even more important. Li Keqiang stressed that“stability is of overriding importance” and referenced stability close to 30 times in his opening address. EconomicGrowth Premier Li struck acautiously positive tone on theeconomy, looking back on last year in whichChina “registered a slower but stable performance with good momentum for growth.” Having expanded 6.7% in 2016, thisyear the authorities target growth of “around 6.5%, orhigher if possible in practice.” This isthelowest growth target in more than20 years. During theclosing press conference, Li Keqiang noted that he’d read international reports commenting on thedecreasing growth in China. The premier observed thatgrowth of 6.5% is not low nor isit easy to achieve. He went on to compare thestateof today’s economy to an adult Shaolin monk who could perform fewer somersaults compared to ayounger monk, yet remained impressive. He continued by noting thatif thecountry achieves this year’s economic growth target the volume of growth will be larger than last year and thatit remains critical to focuson quality growth over quantity. Changing theeconomic growth drivers away from infrastructure investment and manufacturing to consumption and innovation-driven sectors has been apriority since themid-2000s. Last year consumption became the main driver of economic growth with thevalueof theservice sector representing 51.6% of GDP. Yet more work remains on reforming theold pillars that drove theeconomy for thefirst 30-years of theopening up era. Premier Li stated thatthecountry can “now advance only through reform and innovation.” Jobs,Entrepreneurship and Stability Continued steady economic growth is critical to ensuring employment. Creating jobs for graduates and those impacted by industrial restructuring is apriority. Ifgrowth slips, stability will be undermined. Premier Li noted at theclose of theTwo Sessions thatover thelast four years more than50 million new urban jobs hadbeen created and thisyear theyaimed to create 11 million new urban jobs—one million more thanlast year. Thepressure to create jobs thisyear is even higher with thenumber of graduates thehighest in history with 7.95m studentsgraduating from college and more thanfive million graduating from vocational schools. This ison top of thethousands impacted by industrial restructuring. This year Li Keqiang re-stressed the importance of creating an environment thatenables graduates and laid off workers to create their own businesses and create their own employment opportunities as opposed to expecting thegovernment to provide secure employment. Thepremier noted that while more needs to be done to support entrepreneurship and innovation, theenvironment is working with “on average more than 40,000 market entities registered on a daily basis, which amounted to an annual increase of more than 10 million entities.” Premier Li called on foreign journalists at theclosing press conference “to provide morecoverage of the fact that employment in China is created by China itself.” Povertyalleviation Ayear ago Li Keqiang pledged to move theremaining 60 million citizens in poverty to above theofficial poverty line by 2020. During last year thenumber of people living in poverty in rural areas was reduced by roughly 12.4 million leaving 43.35 million in poverty at the end of last year. Tackling thesevast discrepancies remains apriority. Thisyear the government aims to reduce thosein poverty by more than10 million. To achieve thisthegovernment has increased poverty alleviation funding by more than30% and earmarked RMB100 billion. Xi Jinping noted thatthecloser to the deadline, “the moredifficult the campaign to eradicate poverty will be” Balancing the Holy Trinity – stability is paramount 4
  5. 5. © Brunswick | 2017 | and Li Keqiang stated thatpoverty cannot be eradicated only by the actions of thegovernment and they will “support non-governmental participation in combating poverty.” Inter-governmental organizations, non-profits, and corporates should consider if and howtheycan support thismission in theyears ahead. DeepeningReform Atthestart of theTwo Sessions Li Keqiang laid outfive major reform priorities for theyear ahead thatwill support supply side reform: cut overcapacity; cutexcess urban real estateinventory; deleverage debt; cut corporate costs; and strengthen areas of weakness (focusedon poverty alleviation and developmental disparities). InhisWork Report, Li noted that the authorities had“pushed ahead with reforms to restructure and reorganize state-owned enterprises and introduced into them mixed ownership structures” and heannounced thatthe government “will encourage non-public enterprises to participate in SOE reforms.” There islimited detail on additional measures related to SOE reform and theattention given to SOE reform in thepremier’s remarks thisyear was notably less thanin previous years. However, thedrop in attention is not for a change in commitment, but because last year theauthorities reached agreement on actions. They promulgated 38 regulations and programs to guide SOE reform, pilot projects in tenreform areas were carried outat thecorporate level of central SOEs,and more than760 measures were taken by provincial authorities in thelast year alone. EncouragingGood ConstructiveBehavior Theauthorities’ effortsto tackle corruption will continue. This stopped being acampaign long ago and isnow part of thebroader ‘new normal’ environment. Past behavior thatwas regarded asacceptable isno longer tolerated, regardless of position or background. Theestablishment ofa new state supervisory commission is thenext step in thearsenal to change behavior. Thenew commission will coordinate with theCentral Commission for Discipline Inspection and integrate government supervision departments and corruption prevention bureaus. Thenew commission will supervise Party, government and judicial bodies. At hismeeting with thepress, Li Keqiang noted that asthecountry has increased access to themarket it must create anenvironment of fair competition while investigating and punishing casesof wrongdoing. He summed upby stating that“we want to send the signal of "go ahead, go ahead, and go ahead" to market entities abiding by the laws and regulations; show the green light of "can do, can do, and can do" to start-ups and innovators relying on labor; and promptly flash the yellow cardto illegal and undesirable activities, sending them off with ared card if necessary.” ForeignInvestment Li Keqiang reiterated thatChina will remain open to foreign investment and noted that last year Chinautilized more thanUSD 130 billion of overseas investment, which ranked thehighest among developing countries. The premier noted that thecatalogue of industries open to foreign investment will be revised and thattheywill make service industries, manufacturing, and mining more open to foreign investment. He also statedthatthegovernment will expand a pilot program thatgrants market access on thebasis of a negative list. Chinahashistorically restricted foreign investment in any sector it doesn’t explicitly approve. Anegative list approach would allow all investment not explicitly forbidden and detailed in anegative list. Following theestablishment of pilot free trade zones in Shanghai in 2013 and zones in Guangdong, Tianjin and Fujian, theauthorities have further expanded theinitiative. Last year seven new pilot free trade zones and 12 new experimental zones for cross- border e-commerce were created. This year “11 high-standard pilot free trade zones” will be launched drawing on “practices developed in these zones that are proven to work.” Yet, thismonth,EUand U.S. trade groups published reports criticizing theMadein China2025 strategy dueto preferential treatment given to Chinese companies. The U.S.Chamber of Commerce cited central government- directed initiatives and theEuropean Chamber of Commerce in China accused Chinaof setting aggressive market-share targets for theChinese and international markets and “self- reliance” for key components. Addressing theseconcerns, Premier Li statedthat “foreign firms will betreated the same as domestic firms” and “will enjoy the same preferential policies under the Made in China 2025 initiative.” Statements are simple. Proof is in action. 5
  6. 6. © Brunswick | 2017 | Poweringthe Nation Adjusting China’s energy mix hasbeen amajor priority over thepast four years. Beyond theobvious environmental imperative, the government hastheadded incentive of needing to tackle overcapacity in the nation’s vast network of coalmines. Wind, solar, hydro and nuclear are all destined to play a part in thesolution. Anew energy mix will require Chinato address ‘zombie enterprises’ thatlitter thestate-owned power-generation, petroleum and natural gas sectors, something Premier Li pledged to do in hiswork report. Ifthegovernment is successful,genuine competition from theprivate sector should emerge. Upstream oil and gas, where thestate- owned sector hastraditionally lacked expertise, shouldbe furtheropened to private Chinese and foreign players, but details on suchreform are yet to be announced. Underpinning everything, of course, is theneed to “make the skies blue again,” an aim Premier Li stated multiple times in hisreport. Inaddition to rolling back coal power generation, the government will continue to look at the roles and responsibilities ofregulators and enterprises in protecting the environment. The Healthof the Nation Theauthorities continue to grapple with healthcare reform and balancing access and affordability. Last year Li Keqiang noted that“health is at the root of happiness” and spoke about creating ahealthyChinaand ensuring access to medical care. During 2015 theauthorities achieved complete basic medical insurance coverage. In theyear ahead subsidies for basic health insurance for rural and non-working urban residents will be increased while also adding more medicines to theinclusion list. Anadditional access challenge has been using medical insurance when having treatment beyond one’s registered homelocation. On-the-spot settlement of medical expenses incurred anywhere in theprovincial- level administrative area where one's insurance is registered isnow possible. Intheyear aheadtheauthorities will accelerate building a nationwide IT network for basic health insurance so thathealthcare costs can besettled directly where incurred. Onthebroader healthof thenation, Li spoke aboutthepriority to further enhance thesafetyof food and drugs. Thehead of theChinaFood and Drug Administration complained thatfood safetyand supervision “still falls short of expectations.” He stressed that irregularities will be punished severely. Expect new regulations and increased enforcement. ProductQualityin China Whendiscussing howto increase consumer spending, thepremier noted it was important to focuson howto boost consumption of quality products. Ina measure that will make those living in Chinahappy, Premier Li called for more products sold domestically to be produced on thesame production lines, meet thesame standards, and be of thesame quality asproducts for export as aroot to “upgrading consumption.” He also promised to “be strict about investigating and punishing the production and sale of counterfeit and substandard goods, false advertising, and price fraud” and strengthening the protection of consumer rights in order to make spending “an enjoyable rather than a disappointing experience.” Disparities in product quality and service standards offered by companies in Chinaand overseas have historically been called outby consumers in China. Companies shouldbe mindful of thisnew focus, however differences in technical standards country-to-country make achieving theneed to “meet the same standards” unclear. 6
  7. 7. © Brunswick | 2017 | Sino-USRelations Relations with theU.S. havebeen strained since theend of last year when President Trump broke with the long standing one-China policy and spoke with Taiwan’s leader. China was fairly restrained in itsresponse and stressed thattheconversation “can’t change Taiwan’s status as apart of China”. Trump doubled down during a Fox News interview on December 11th when hestated thattheU.S.did not haveto stickto itslong-standing position on Taiwan and suggested this could be abargaining chip. Inthesame interview hecriticized China’s currency policies, its activities in the SouthChina Sea and itsstance toward North Korea. Chinaresponded swiftly. They urged Trump to “listen clearly, the one-China policy cannot be traded”. Trump had focusedon an issue fundamentally non-negotiable from China’s point of view. Officials in Chinastatedthat bilateral relations will be badly affected and that cooperation was out of the question if Washington couldn’t recognize China’s point of view regarding theone-China policy. InhisWork Report, Li Keqiang had pointed comments regarding the policy. He noted thatChina“will resolutely oppose and contain separatist activities for Taiwan independence” and “will never tolerate any activity, in any form or name, which attempts to separate Taiwan from the motherland.” Thetone is far stronger thanin recent years. At theclose of theTwo Sessions Li also issued aveiled warning thatif a trade war erupts between theU.S.and China that“the first to incur losseswould be the foreign investment companies, in particular the U.S.-funded enterprises.” He stressed, however, that Chinadoes not want atrade war as it would bring losses to both sides and wouldn’t lead to fairer trade. He also noted that “trade and mutual investment between China and the U.S. have created close to one million jobs in the United States.” Bothsides are working to stabilize relations. The presidents havespoken on thephone and thegroundwork is being put in place for face-to-face meetings in theUS asearly asApril and later in theyear in China. Yet the relationship remains strained. Anupcoming date to pay attention to, potentially after therumored meeting in theU.S., will be theDepartment of theTreasury’s report to Congress in April to seeif theyconclude thatChina hasbeen manipulating itscurrency as Trump haspreviously claimed. One Country,Two Systems Inrelation to Hong Kong, Li Keqiang included standard language in his Work Report about thecommitment to one country, two systems—but went furtherthanin previous years whenhe statedthat “the notion of Hong Kong independence will lead nowhere.” Again—far stronger thanin previous years. During theclosing press conference, heelaborated thatthe principal of one country, two systems must be implemented in its entirety and cannot be bent or distorted. Premier Li also stated thatthecentral government plans to pilot the“bonds connect” between themainland and Hong Kong during thisyear allowing overseas capital to access themainland bond market. Chinaand Globalization During Li Keqiang’s opening remarks hedid not mention thenew Trump administration, butit likely inspired some comments. He emphasized that Chinawill remain committed to global economic cooperation and engaged in multilateral trading regimes. Atthe 2017 World Economic Forum Xi Jinping argued for globalization and trade and against protectionism and isolationism. Whileit is positive to see China stepping forward as an advocate for globalization and against rising protectionism, many observers are concerned with increasing access challenges domestically. Thegulf between international engagement and thedomestic environment highlight continuing contradictions in China. Yet ultimately, international engagement will play apart in driving domestic reform. The Belt and Road TheBelt and Road Initiative wasalso frequently referenced during theTwo Sessions asa critical part of China’s engagement. He Lifeng, head of the National Development and Reform Commission, noted thatChina had invested more thanUSD 50 billion in countries along theBelt and Road since theinitiative launched in 2013 and that theinitiative hadwon support from more than100 countries and international organizations, with nearly 50 cooperation agreements signed between governments. Expect continued priority and attention to given to theBelt and Road Initiative. Premier Li also called outthe upcoming Belt and Road Forum for International Cooperation which will be held in Mayin Beijing. China and the World 7
  8. 8. © Brunswick | 2017 | Theannual Two Sessions are an important milestone in thepolitical calendar. But,thereal focusthisyear is on the19th Party Congress whichis set to take place in thefourth quarter of thisyear (most likely in October). The19th Party Congress will mark the start of Xi Jinping’s second five-year term as headof theParty. The emphasis on stability during thisyear’s Two Sessions should not betaken as an indication thatBeijing isstepping back from longer-term reform, rather their focuson asmooth road to the Party Congress. One of thebiggest questions is who will be in thePolitburo and even more importantly in thePolitburo Standing Committee for thenext fiveyears. Based on recent precedent, a significant number of current Politburo members are expected to retire based on their age. Inrecent years theParty hasoperated an informal rule that senior leaders can be appointed into thePolitburo if they are younger than68 at thetime of a new Party Congress. If theyare older theymust retire. Basedon age and recent precedent fivemembers of the seven person Politburo Standing Committee will retire thisyear, along with at least six additional members of thebroader 25-person Politburo. Theemphasis on ‘precedent’ is because thereis significant debate whetherXi Jinping will break with recent precedent and keep Wang Qishan in theStanding Committee. Wang, who hasbeen instrumental in driving theanti-corruption campaign ashead oftheCentral Commission for Discipline Inspection, will turn 69 in July thisyear. There hasbeen speculation thathecould continue in hiscurrent role leading theanti- corruption drive or even replace Li Keqiang aspremier. IfWang remains, it will add credibility to speculation thatXi Jinping may remain in officefor athird term (2022-2027). Also based on recent precedent, the Congress prior to theretirement of the head of theParty (and thepremier) will include theheir apparent in the Politburo Standing Committee to provide five-years of on thejob training. Theheir apparent will, based on recent precedent, serve for three terms in theStanding Committee (at least one as heir and two asleader). These practices date back to the1990s. In2007 Xi Jinping and Li Keqiang were appointed straight into theStanding Committee before being appointed head of theParty and premier, respec- tively in 2012 and 2013. Later thisyear all eyes will be on who walks out on stage to spot apotential successor. Basedon recent precedent, only two members of thecurrent Politburo are eligible based on age to succeed Xi Jinping and Li Keqiang— theseare Hu Chunhuaand Sun Zhengcai. Yet, justlike Xi Jinping’s own ascension—it ispossible for thefuture leader to rise directly into theStanding Committee having never previously been in thePolitburo. Other candidates to watchin themonths ahead, who may rise from the Politburo into themore exclusive Standing Committee include: Wang Huning; Wang Yang; Han Zheng; and Zhang Chunxian. And, thequestion remains who could be selected from beyond thecurrent Politburo. Whatis clear is thatthePolitburo and theStanding Committee will be filled with asignificant number of Xi Jinping’s allies and protégés. Witha consolidation of power during thefirst five-year term there is hope thatthe second term will see greater reform. What’s Next – the 19th Party Congress 8 Expected vacant seats in the Politburo and Standing Committee based on recent precedent going into the 19th Party Congress later this year are denoted with an asterisk. The top row are Standing Committee members. Xi Jinping Li Keqiang Zhang Dejiang * Yu Zhengsheng * Liu Yunshan * Wang Qishan * Zhang Gaoli * Ma Kai * Wang Huning Liu Yandong * Liu Qibao Xu Qiliang Sun Chunlan Sun Zhengcai Li Jianguo * Li Yuanchao Wang Yang Zhang Chunxian Fan Changlong * Meng Jianzhu * Zhao Leji Hu Chunhua Li Zhanshu Guo Jinlong * Han Zheng Du Qinglin Zhao Hongzhu Yang Jing
  9. 9. © Brunswick | 2017 | What are the TwoSessions? TheTwo Sessions, or lianghui (两会) as thesessions are commonly known in China,are theannual gathering of the National People’s Congress (全国人民 代表大会全国人民代表大会) and the ChinesePeople’s Political Consultative Conference (中国人民政治协商会议中 国人民政治协商会议). TheTwo Sessions are typically held during the first two weeks in March. What isthe NPC? TheNational People’s Congress (NPC) is thehighest legislative body in Chinaand hassole responsibility for enacting legislation in thecountry. TheNPC meets once a year in March and enacts and amends basic laws relating to the Constitution, criminal offences,civil affairs, stateorgans and other relevant matters. WhentheNPC is not in session each March, theStanding Committee of theNPC istasked with enacting and amending laws, with theexception of basic laws that mustbe enacted by the NPC. TheNPC isalso responsible for electing and appointing members to central stateorgans—including theStanding Committee of theNPC,thePresident of thePeople’s Republic of China (currently Xi Jinping) and thePremier of theStateCouncil (currently Li Keqiang). Based on nominations by thePremier, theNPC isalso responsible for appointing China’s Vice Premiers, State Councilors, and Ministers. This isthefifthand final session of the 12th NPC. The12th NPC wasformed in March 2013 and will serve a five year term. This year’s session washeld from March 5th to 15th. What isthe CPPCC? TheChinese People’s Political Consultative Conference (CPPCC)is a political advisory body thatconsists of representatives from arange of political organization, academia, business lead- ers, celebrities, and otherexperts. The National Committee of theChinese People’s Political Consultative Conference (中国人民政治协商会议全 国委员会会) meets on an annual basis at thesame time astheNPC. This isthefifthand final session of the 12th CPPCC. This year’s session was held from March 3rd to 13th. Political Backgrounder 9
  10. 10. © Brunswick | 2017 | Tel: Tel: Tel: BRUNSWICK GREATER CHINA Brunswick Group Brunswickis an advisory firm specializingin critical issuesand corporate relations:a global partnershipwith23 offices in 14 countries. Founded in 1987,Brunswickhas grownorganically, operatingasa singleprofit center– allowingus to respondseamlesslyto our clients’needs,wherever theyare in the world. Our GreaterChinateamof more than100 across Beijing,Hong Kongand Shanghaiadviseclientson a broadrangeof critical issuesimpactingbusiness success. The Authors 10 St.JohnMOORE PartnerandHeadofBeijing SincemovingtoBeijinginthe1990sSt.Johnhasspenthistimeadvising Chineseandforeigncompaniesonpublicaffairs,issuemanagement, cross-borderM&A,andlong-termcorporatereputationmanagement. HeisaregularauthoronChina’spoliticalenvironment. MEIYan SeniorPartnerandHeadofChina,Beijing YanoverseesBrunswick’sChinabusiness. ShejoinedfromViacom, wheresheledMTVNetworksGreaterChinaandwaschiefrepof ViacomAsia. Previously,YanheldaseriesofseniorpositionsatTurner InternationalAsiaPacific,NewsCorp.,STARGroup,ITNandCNN. LUJianzhong Partner,Shanghai Dr.LujoinedfromRGEChina,aglobalresourcedevelopmentcompany, wherehewasgroupexecutivevicepresidentaswellaschairmanofthe boardofitsdownstreampulpandpaperbusiness. PriortoRGEhewas atBHPBillitonChinawherehewasactingpresident. GordonGUO Partner,Beijing Gordonjoinedfollowing18yearsattheMinistryofCommerceduring whichhespentfouryearsattheChineseEmbassyintheUKandwas separatelysecondedintomultipleChinesetradeassociations. GAOYunsong Partner,Beijing YunsongjoinedfromP&Gwheresheledgovernmentrelationsand publicpolicyforGreaterChinafortenyears. Shehasheldpositions withChineseSOEs,Chineseprivatecompanies,andleadingforeign companiesoperatinginChina. TheauthorswishtoalsogivespecialthankstoNickBeswickandChenniXufortheir significantworkonthisreportandtothebroaderteamofRitaFung,Catherine Huang,BaijiaLiu,HelenZhaoandQiZhangfortheircontributionstothisreport. BEIJING 2605TwinTowers(East), 12BJianguomenwaiAvenue, Beijing,100022,China +86(10)5960-8600 HONGKONG 12Floor,DinaHouse, 11DuddellStreet,Central HongKongSAR +8523512-5000 SHANGHAI 2907UnitedPlaza, 1468NanjingRoadWest, Shanghai,200040,China +86(21)6039-6388