China opens its annual parliamentary session with the Communist Party set to unveil a new economic growth model focused on boosting wages and narrowing a worrying wealth gap.


The 10-day gathering of the National People’s Congress (NPC) in Beijing’s Great Hall of the People begins with a “state of the nation” speech from Premier Wen Jiabao, who will outline the government’s priorities for the year. After decades of blistering export-dependent growth that has made China’s economy the second-largest in the world, Beijing now wants to follow a more sustainable, environmentally-friendly path via higher domestic consumption. The ruling Communist Party also wants to reassure the more than 200 million migrant workers who have helped fuel China’s economic boom – but are seen as a potential source of social unrest – that they have not been forgotten. Wen pledged in a chat with Internet users to tackle soaring inflation, the widening rich-poor divide and persistent official corruption in the world’s most populous nation. Those are among the hot-button issues that sparked popular uprisings in Tunisia, Egypt, Libya and elsewhere in the Arab world, and which consistently top the lists of public concerns in China. “The purpose of our economic development is to meet the people’s growing material and cultural needs, and make the lives of commoners better and better,” the premier said. Soaring food and fuel prices have especially touched a raw nerve, and experts say inflation should top the NPC agenda. “I think over the next week we will hear a lot about the need to deal with inflation in the short-term and also to rebalance the economy over the longer-term,” Royal Bank of Canada senior strategist Brian Jackson said. He predicted further interest rate hikes and a stronger yuan in the coming months, which would “not only help curb price pressures, but should also boost the purchasing power of Chinese households.” Headlines in China Soaring food and housing costs have grabbed the headlines in China, which has a history of inflation-triggered public unrest, and Wen is expected to make renewed pledges of equitable growth and fairness. “I always say we should not only make the cake of social wealth as big as possible, but also distribute the cake in a fair way and let everyone enjoy the fruits of reform and opening up,” Wen said in Sunday’s online chat. He has already said China would aim for seven percent annual growth over the next five years – a rare lowering of its usual target of eight percent expansion, until now seen as key to staving off social unrest. The urgency of addressing key social issues has been underlined in the past two weeks by mysterious Internet calls for weekly Sunday “strolling” rallies in major cities, which have largely fizzled under a smothering security presence. Some observers say the moment is ripe for Beijing to embrace real reform. “Nothing short of a communications revolution is taking place on their watch, radically transforming social attitudes and expectations,” Human Rights Watch’s senior Asia researcher Nicholas Bequelin said in a column this week. “The rulers in Beijing would be well advised to take note before today’s murmurs of unrest turn into a roar,” he wrote in Foreign Policy. But new signals on political reform at the NPC are unlikely, especially ahead of a pivotal Communist Party meeting in late 2012 that will finalise the next generation of leaders.