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.

1. FifthSessionofthe
12th NationalPeople’s
Congress
March 2017

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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
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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
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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
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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.
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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.
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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
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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. © 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. © Brunswick | 2017 |
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Brunswick Group
Brunswickis an advisory
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The Authors
10
St.JohnMOORE
PartnerandHeadofBeijing
SincemovingtoBeijinginthe1990sSt.Johnhasspenthistimeadvising
Chineseandforeigncompaniesonpublicaffairs,issuemanagement,
cross-borderM&A,andlong-termcorporatereputationmanagement.
HeisaregularauthoronChina’spoliticalenvironment.
smoore@brunswickgroup.com
MEIYan
SeniorPartnerandHeadofChina,Beijing
YanoverseesBrunswick’sChinabusiness. ShejoinedfromViacom,
wheresheledMTVNetworksGreaterChinaandwaschiefrepof
ViacomAsia. Previously,YanheldaseriesofseniorpositionsatTurner
InternationalAsiaPacific,NewsCorp.,STARGroup,ITNandCNN.
ymei@brunswickgroup.com
LUJianzhong
Partner,Shanghai
Dr.LujoinedfromRGEChina,aglobalresourcedevelopmentcompany,
wherehewasgroupexecutivevicepresidentaswellaschairmanofthe
boardofitsdownstreampulpandpaperbusiness. PriortoRGEhewas
atBHPBillitonChinawherehewasactingpresident.
jlu@brunswickgroup.com
GordonGUO
Partner,Beijing
Gordonjoinedfollowing18yearsattheMinistryofCommerceduring
whichhespentfouryearsattheChineseEmbassyintheUKandwas
separatelysecondedintomultipleChinesetradeassociations.
gguo@brunswickgroup.com
GAOYunsong
Partner,Beijing
YunsongjoinedfromP&Gwheresheledgovernmentrelationsand
publicpolicyforGreaterChinafortenyears. Shehasheldpositions
withChineseSOEs,Chineseprivatecompanies,andleadingforeign
companiesoperatinginChina.
ygao@brunswickgroup.com
TheauthorswishtoalsogivespecialthankstoNickBeswickandChenniXufortheir
significantworkonthisreportandtothebroaderteamofRitaFung,Catherine
Huang,BaijiaLiu,HelenZhaoandQiZhangfortheircontributionstothisreport.
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