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China to Boost Defense Budget; EV Chiefs Give Advice: NPC Update

(Bloomberg) — China’s annual National People’s Congress kicks off on Sunday morning, a key political event that promises a shakeup at the top echelons of government that could further consolidate President Xi Jinping’s power.

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At a media briefing on Saturday that coincided with the opening of the CPPCC, China’s top political advisory body, NPC spokesperson Wang Chao announced that the legislative session will close on the morning of March 13, making it slightly longer than last year’s pandemic-shortened event. .

He also said Beijing needs to increase its defense spending and that China has no fundamental disagreements with Europe. His comments come at a time when US-China tensions are running high over everything from trade, technology to Taiwan, while concern that Beijing may increase support to Russia in its invasion of Ukraine risks antagonizing its trading partners in Europe.

At tomorrow’s opening, Premier Li Keqiang, who is set to be replaced by Xi ally Li Qiang, will deliver his last government work report and outline a target for gross domestic product growth for this year. While last year’s actual GDP growth of 3% missed the official goal by a wide margin, hopes are high that the reopening will boost growth and investor confidence in the world’s second-largest economy.

What to Know:

  • Click here to read more about this year’s NPC

  • What to watch out for this year (video)

  • Forecasts on growth targets, budget goals

  • A QuickTake explainer on the NPC

  • A stock trader’s guide to the NPC

  • Insights on incoming officials, NPC delegates

Upcoming Events

Key upcoming NPC events that have been announced so far include:

  • March 4 — CPPCC, China’s top political advisory body, starts annual session

  • March 5 — NPC opens, with Premier Li Keqiang delivering his last government work report. Delegates will also review work reports submitted by finance minister and head of China’s economic planning agency NDRC

  • March 7 — New Foreign Minister Qin Gang holds a briefing

  • NPC plenary session, with delegates listening to work reports delivered by NPC standing committee chairman, head of the supreme court and the top prosecutor. Session will also introduce government reorganization plans, while delegates will vote on key government roles, including the president, the premier and top ministry officials (Timing to be confirmed)

  • March 13 — NPC closing session. The new premier’s press conference is likely to follow

Latest developments: (Time-stamps are local time in Beijing):

Wang Yang Delivers Opening Speech at CPPCC (3:50 pm)

During a speech delivered at the opening ceremony of the CPPCC, Wang Yang, chairman of the political advisory body and a former vice premier, said the CPPCC has worked to unify Chinese within the country and overseas over the past five years. The CPPCC has strengthened communications with groups in Taiwan and encouraged Hong Kong delegates to speak out on issues including the drafting and implementation of the national security law, he said, adding that it will continue to unify all groups tightly around the Communist Party.

China Defends Military Budget (1:52 pm)

China needs to increase its military spending to meet “complex security challenges” and “fulfill its responsibility as a major country,” Wang Chao, spokesperson for the annual National People’s Congress legislative session, said at a press conference in Beijing Saturday.

Wang did not give a specific number of China’s military budget planned for this year. Increases in China’s defense spending have been “appropriate and reasonable” in past years, he said, adding that the defense budget as a share of China’s gross domestic product has been basically stable for many years, and the percentage is lower than the global average.

Geely and Xiaomi Chiefs Speak (Saturday)

Li Shufu, founder of Chinese carmaker Zhejiang Geely Holding Group Co., said China’s new energy vehicle industry — the world’s largest by output and sales — is developing in a sustainable way through increasing recycling of components like lithium batteries. The government’s policy incentives such as purchase tax breaks have helped the industry and its supply chain keep achieving technological breakthroughs, Li, a delegate to the CPPCC, told reporters on the sidelines of the meeting.

He called on the government to take measures to revitalize domestic carbon trading by introducing more products to the market and bringing in more participants, according to a local media report.

Lei Jun, chairman of Xiaomi Corp., a smartphone and home appliance maker that has ventured into EV manufacturing, is submitting proposals to the NPC on improving the regulation of car-related data and promoting a “car culture” that encourages the growth of China’s auto industry. Lei, an NPC representative, also proposed to push for the development of biorobotics, according to his post on Weibo, a Twitter-like social media platform.

A New Generation to Lead China’s Economy (Friday)

China is about to see its biggest reshuffle of economic policymakers in decades. Outgoing officials include major names such as Premier Li Keqiang, Vice-Premier Liu He, who led trade negotiations with the US, and central bank chief Yi Gang.

Their replacements, to be announced over the next couple of weeks at the annual meeting of China’s National People’s Congress, are generally less internationally experienced, with lesser academic credentials, and are distinguished above all for their close ties to president Xi Jinping.

China Says Pursuing Peaceful Development of Taiwan Relations (Friday)

China will push for peaceful development of relations with Taiwan, Guo Weimin, spokesperson for the annual session of the political advisory body CPPCC, said at a briefing. China will continue to promote exchanges with people from all walks of life in Taiwan, he added.

–With assistance from Li Liu.

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