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Mar. 10, 2015 - Updated 04:16 UTC

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Leaders Aim to Deliver Solutions

Mar. 6, 2017

China's National People's Congress has kicked off its annual session in Beijing. Tonight, we start our 2 days of special coverage with an analysis of China's domestic and diplomatic direction.

The city is under heavy security as delegates across the nation have gathered to attend the political event, in which key policies are discussed.

Attention is particularly high this year, as the ruling Communist Party prepares for a major reshuffle of its leadership at a convention later this year. Leaders are under pressure to show the people that they are capable of delivering solutions to pressing issues such as growing disparity, corruption and the notoriously bad air pollution.

The Congress is taking place as the leaders are facing diplomatic challenges. The new US president continues to target his critical words against China's policies.

Plus the security situation of the region is far from stable. North Korea launched 4 missiles this morning. Japan and South Korea quickly denounced the move. North Korea's act of provocation could be seen as a test on how much influence Beijing can exercise over Pyongyang.


China Focuses on Key Policies

The Congress started on Sunday as delegates arrived to attend the opening ceremony. Thousands of delegates from across the country are in the capital for the event which runs until March 15.

The big issue is the slowing economy. Premier Li Keqiang has set the growth target for this year at around 6.5 percent. That's lower than the actual growth rate of 6.7 percent seen last year. He says stability is more important than a fast pace of development.

"Our country is facing an uphill battle. We are at a crucial stage. China's economy is filled with contradictions. We must not underestimate the difficulties but we are confident we can overcome this challenge," Li said.

With the new target in place, government officials also announced measures to stabilize employment. This includes a plan to create one million more urban jobs compared to last year.

But leaders could be facing another "uphill battle" abroad. US President Donald Trump has repeatedly criticized China over the trade imbalance between the countries.

Li addressed that concern.

"We are seeing a rise in protectionism around the world. Economic globalization is in the fundamental interest of all nations. China will stand firm in promoting free trade," he said.

Chinese officials say the country's defense budget for 2017 has topped 1 trillion yuan, or about 151 billion dollars, for the first time. Chinese Finance Ministry officials announced the figure through the state-run Xinhua News Agency. They said the country's defense budget for 2017 was up by 7 percent from last year.

But Li said yesterday that the country will move quickly to become a strong maritime power to firmly protect its maritime interests. He made clear China's stance to further strengthen its military to defend its borders as well as territorial waters and airspace.


NHK World’s Beijing-based chief correspondent Ryoji Ito joins anchor Sho Beppu in the Chinese capital.

Beppu: What do the Chinese leaders want to achieve most through this year's Congress?

Ito: I think the biggest aim is to show the country's roadmap toward a stable society by further consolidating President Xi Jinping's grip on power. Chinese leaders want a smooth inauguration of his 2nd term at the Communist Party convention later this year.

You might have noticed that Premier Li repeatedly mentioned Xi as the "core" leader in his speech. In fact, he used the word “core” 6 times. In China, the word "core" has been used for charismatic leaders such as Mao Zedong and Deng Xiaoping. Xi appears to be seeking similar authority.

"Under the leadership of the party with comrade Xi Jinping as our "core" leader, we will raise the banner of China's unique socialism."
-Li Keqiang / Chinese Premier

Beppu: In addition to the word “core,” I have found that the word “stability” was repeated in Premier Li’s speech. He said that “stability is of overriding importance.” Does this explain why they lowered the economic growth target for this year?

Ito: Yes, it does. Up to now, the leadership has been taking bold economic measures. Leaders say that China should seek a grand revival of the Chinese people. But they chose to announce modest targets this year. The country still aims to achieve its 10 year goal of doubling per capita income by 2020.

A growth rate of 6.5 percent is the necessary minimum to achieve this. In other words, the target was reduced to the lowest possible level to achieve the goal. This approach is seen in other instances. Unlike previous years, they did not immediately release exact figures for the defense budget at the Congress.

I think that this has something to do with Donald Trump becoming the new president of the US. Beijing takes its relations with Washington seriously. It makes sense that Chinese leaders wanted to avoid making the new US administration nervous.

Beppu: As you mentioned, China’s relations with the US are under the spotlight especially because US President Trump has stepped up criticism against Beijing. Let's take a look at this next story.


Concerns over Trump's Policies
Sho Beppu

This is Wangfujing the busiest commercial district in the capital Beijing. I came here to ask the people what they're thinking about the new US president.

"I think China-US relations will gradually improve. The media says if the countries work together, it will result in a 'win-win' situation. Ordinary Chinese like me hope for better ties. We don't want conflict," says one man there.

"Trump's policies may not be exactly the same as Obama's, but I think he'll continue Obama's 'Asia-Pacific rebalance strategy' and increase US military presence there. The target of those policies is most likely China," says another.

US President Donald Trump's controversial remarks are causing concern among Chinese people.

"They are the greatest currency manipulators ever!" Trump has said of China.

"You look at China in the South China Sea," he said at another event. "They don't respect us. They are not supposed to be doing that."

Throughout his election campaign, Trump again and again took China to task. Since his victory in November, he has kept on making remarks that could make the Chinese government nervous.

As president-elect, Trump signaled his readiness to rethink an issue Beijing considers nonnegotiable its "One China" principle. Trump's phone conversation with Taiwanese President Tsai Ing-wen in early December was against conventional protocol. Trump told Fox News that he didn't feel bound by the "One China" principle unless strings, such as trade negotiations, were attached.

Beijing's response was swift.

"The 'One China' principle is the political basis for China-US relations. If the foundation is interfered with or damaged, there would be no sound and stable development of the bilateral ties and cooperation," says Chinese Foreign Ministry spokesperson Geng Shuang.

The following month, China sent a signal by sailing an aircraft carrier around Taiwan. In January, speaking at the World Economic Forum in Davos, Chinese President Xi Jinping defended globalization. It was an apparent response to Trump's protectionist rhetoric.

"Pursuing protectionism is like locking oneself in a dark room. No one will emerge as a winner in a trade war," Xi said.

Trump was sworn in as president later in the month. Attention was focused on if he would follow through with his campaign rhetoric about China. Finally, on February 9, Trump and Xi spoke by phone and Trump told the Chinese president he would honor the "One China" policy.

But Trump continues to criticize China over the trade imbalance with the US.

"Seventy thousand factories closed since China joined the WTO -- 70,000 factories," Trump said.

A key focus will be on how China deals with the US from here.


Beppu: How are Chinese leaders reacting to Trump’s remarks about China’s economic policies?

Ito: The Trump administration is imposing sanctions such as anti-dumping duties on Chinese imports, complaining that the goods are sold below fair value. But China's reaction has so far been restrained. I think there are several reasons. One is that leaders here may have been ready to see US sanctions to some extent because Chinese imports account for nearly half the US trade deficits.

The other one is that Chinese leaders regard Trump as a practical businessperson. In fact, leaders here would feel comfortable that, unlike previous US presidents, Trump is not pressing China to adopt American values such as freedom, democracy and human rights.

They may be thinking that Xi should hold talks with Trump just like Japanese Prime Minister Shinzo Abe did. They expect that if Xi directly explains that China is selling the dollar and buying the yuan in order to prevent the yuan from lowering against the dollar and that China is helping produce several million jobs in the US through trade and investment, Trump may relax his criticism to some extent.

Beppu: How will Chinese leaders deal with Trump on security issues?

Ito: Compared to the economy, security issues will prove much more difficult to solve. As for Taiwan, Trump agreed to honor the "One China" policy, but he is fiercely criticizing China over the disputes in the South China Sea and hinted at taking tougher measures. Chinese leaders don’t want to cause diplomatic frictions especially ahead of the Communist party convention. At the same time, they don’t want to be seen making concessions over "core interests" and face strong public criticism. President Xi may toughen his position if that is needed to stay in power longer and that could cause tensions between the two countries.

Beppu: How will Chinese leaders try to avoid that?

Ito: I think China’s leadership will seek a new form of bilateral relations with the US through cooperation on the economic front as well as dealing with North Korea together. What is important for Beijing is that Washington doesn’t interfere in China’s key interests. But leaders may be wondering whether the Trump administration is ready to accept this idea. When US Secretary of State Rex Tillerson visits China later this month, Xi hopes to arrange the date of his first summit with Trump. The Chinese president will certainly be interested in confirming the US stance when he meets Trump.

Beppu: The National People’s Congress continues until March 15. Journalists covering this event will next focus on the foreign minister’s press conference scheduled on Wednesday. Tomorrow, for day 2 of our special coverage from Beijing, I will share an expert’s view and analyze the country’s diplomatic direction.