The Two Meetings National People’s Congress and the Chinese People's Political Consultative Conference Review

This past Sunday, the National closing address, Li Keqiang declared People’s Congress and the Chinese the decade’s upcoming reforms “will People's Political Consultative be a self-imposed revolution that will Conference drew to close. Over require real sacrifice, and it will be the course of the two weeks, a few painful.” spotlight moments amid the well- rehearsed political theatre provided In the spirit of the political season, onlookers with clues about the Ogilvy Public Relations has compiled country’s direction. our notes and offers you our view on major themes emerging out of this With over 3,000 national delegates year’s National People’s Congress. gathered in the heavy grey haze We hope this brief recap will serve of Beijing, social reform and the as a foundation and starting point environment were high on the for discussion on the personalities, agenda, and many of the proposals issues, and evolving solutions for and discussions at this year’s two China as it moves into a new decade sessions centered on improving the of leadership. livelihoods China’s urban and rural citizens. Referring to this goal in his A New Generation

This year the two sessions, or Lianghui, had elevated significance as the baton was formally passed from one generation of leaders to the next. This time of leadership renewal was also a time of change and introspection, as China’s top deliberative bodies adjusted their focus toward responding to challenges presented by 30 years of continued growth. As with previous administrations, we won’t see Xi Jinping’s official mantra begin to emerge until later on in his ten years; for now he is planting the seeds that will become his legacy. urbanization, housing, healthcare and As with most of Chinese politics, from government reform measures during his the outside looking in, surprises are time in the Hu-Wen administration. His scarce. With 99% of the Congress voting statement that "reform pays the biggest in favor, Xi Jinping formally accepted his dividend for China" has been well received title as President. Over the course of the by the general public. Vice Premiers Zhang two weeks, one-by-one, a new cadre of Gaoli and Wang Yang are also viewed as seasoned leaders this week accepted their cautious reformists, as Zhang cut his teeth new roles in the Xi cabinet. in the economic development zones of Shenzhen and Tianjin, while Wang made Highlighting a generational shift, the moves towards social reform during his incoming set of leaders is largely devoid time as Party Secretary of Guangdong. of the soviet-trained cadres that were stalwarts of the Hu-Wen Era. Of the 33 new State Council members (Ministers, Livelihood Vice Premiers, and State Councilors), a full 25 were born after the 1950’s, with the While the content of the Lianghui youngest being only 55 years old. Twelve continued to echo many of the themes and Internet users of this group once worked as “educated problems of past years, what strikes us at youth” sent down to live and work in Ogilvy Public Relations is the tone of the say a standard the countryside during the Cultural discussion, and the willingness of even the for water is Revolution, including five in remote inland most senior of leaders to acknowledge the provinces, giving them direct knowledge day-to-day struggles of the average Chinese whether a mayor of the joys and pains of the average citizen. and the challenges the country is facing. dares to jumps in The composition of the State Council Since taking on the role of Party General and swim itself also reflects the potential for further Secretary in the autumn, Xi Jinping has reform. Incoming Premier Li Keqiang is a slowly strengthened and reinforced the long-time supporter of reform, introducing rhetoric of simplifying government and — Xi Jinping bringing it closer to the people. While past for further changes in the coming year. years have floated the rhetoric of “min sheng” – people’s livelihoods – this year, The most significant outcome is the that rhetoric started to turn into action. transference of the Ministry of Railways to the Ministry of Transport. The Ministry This year’s Lianghui featured spirited of Railways is considered to be the last and surprisingly public discussion and and most solid remnant of the state- debate on a wide array of issues from planned economy and has been plagued contaminated milk powder, to soil and by scandal and debt as China’s rail system water pollution, and income disparity. has grown to be the largest in the world. The discovery this week of over 6,000 The dissolution is a strong signal of the dead swine in the main water supply new leaders’ plan to separate the function for Shanghai city also brought a graphic of the government and its enterprises. example of the challenges faced by legislators. The phrase “Beautiful China” Significantly, the superministry reform is an early slogan coming out of the new has focused on the Ministry of Railways, leadership describing the vision for a Ministry of Health, Ministry of Family prettier, cleaner country. Expanding the Planning, the State Food and Drug air monitoring network, protecting clear Administration and the National Energy water sources, and forestation are all a part of the plan. Nine Ministries Welcome Their New Ministers The NPC isn’t quite ready to shed its well- earned reputation as a rubber-stamp parliament, yet the signals from this year’s sessions may mean greater openness and consideration on issues of minsheng reform.

MFA MOD NDRC Wang Yi Chang Wanquan Xu Shaoshi Restructuring

One of the major actions of the NPC this year was putting in place a plan for a modest restructuring of government ministries. Creating “superministries” by MOF MLR MOFCOM Lou Jiwei Jiang Daming Gao Hucheng consolidating the function of a broad array of existing bureaucracies is said to be a top priority for Xi and Li, but many observers had expected greater changes than we saw this week. With the National Development Reform Commission and the Ministry of MOH & Family State Ethnic Affairs Ministry Of Land and Resources potentially on the Planning Commission Supervision Li Bin Wang Zhengwei Huang Shuxian block, Xi may be keeping his powder dry Administration – all ministries that relate one of the most frequently used words of closely with people’s everyday lives. the Congress this week, as the leadership With the integration aimed at reducing continues to search for ways to close the bureaucracy, improving efficiency, and yawning gap between the coast and the strengthening overall function, the provinces while keeping China’s growth leadership appears to be aiming to ease story on track. Parsing the definitions immediate tension while buying time for of urban development, it appears that a new round of investment in urbanization policies will be initiated to strengthen the Economy & Urbanization infrastructure and job creation potential of China’s third and fourth-tier cities. For the first time in 30 years at the Congress, the government work report delivered by the Premier didn’t include Conclusion the word “fast” in its economic growth target. In its place were targets for “high- On Sunday, Chinese state media ran quality” and “continuous and healthy” profiles of the new leadership team. They growth, continuing to reset expectations read “Xi Jinping: Pursuing dream for 1.3 and reinforce the “new normal” of high billion Chinese” and “Li Keqiang: a reform- single digit growth. minded premier,” headlines revealing of their roles as a man of vision and a man of Measures were announced this week action. Proving the descriptor correct, Li to build a more robust and sustainable Keqiang closed the NPC with three notable economy, including the continued no’s for the incoming administration: No opening up of the capital account by the new government buildings, no increase People’s Bank of China and a commitment in government payrolls, and no increase to creating nine million jobs in China’s growing cities. The surprise retention of in government spending on food, travel, PBOC Governor Zhou Xiaochuan in his and hospitality. Whether by choice or by current role sends a strong signal that the necessity, this year’s National People’s government isn’t ready to part with its Congress has struck a new tone in strongest financial leaders, and together addressing the perception gap between with Vice Premier Zhang Gaoli and newly the government and the people. Even announced Finance Minister Lou Jiwei, as mention of political reform remains Zhou will continue on the road to financial conspicuously absent from official speeches, reform as laid out in the 12th Five-Year the reform agenda appears ready to fill the Plan. vacuum.

Looking towards the next engine for growth, Premier Li Keqiang returned to an old hobby-horse when he called for the integrated development of rural and urban areas. Urbanization became