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Today, China's annual Parliament — the National People's Congress — will open for 10 days.
Key points:
- China's GDP growth rate expected to be announced as slowest rate in 26 years
- Economists say China's debt is already unsustainable at 2.5 times annual GDP
- Military spending increased by 7 per cent or 1.3 per cent of GDP
About 3,000 delegates from China's 31 provinces will converge at the Great Hall of the People in Tiananmen Square to approve decisions already made by the leadership.
The highlight will be a "state of the nation" address delivered by Chinese Premier Li Keqiang. He will announce gross domestic product (GDP) growth rate figures for 2017 and plans for economic reform.
Its widely expected growth will be downgraded from 6.7 per cent in 2016 to 6.5 per cent in 2017, the slowest rate in 26 years but still high by international standards.
Mr Li is likely to label that a "good outcome" in terms of China's "sustainable growth program".
He will outline reforms to hasten China's economic transition towards a high-tech, innovative economy driven by domestic consumption and the service industries, and away from the old economy of manufacturing, construction, steel and coal.
But many economists believe the tough economic decisions will not be made and the massive and stagnant state-owned enterprises will not be closed or scaled back as they should be.
The Government fears mass unemployment and the social unrest that could bring, and continues to prop them up with more debt.
Economist say China's debt is already unsustainable at 2.5 times the annual GDP, and are concerned it could lead to a deeper economic downturn or even meltdown.
Chinese critic Zhang Lifan said it was a huge and fatal mistake: "The state owned enterprises lack vitality but they are preferred because many of the leaders own them. The end result is that the private companies, the real economy shrinks."
Enforcing claims over South China Sea
Parliamentary spokesperson Fu Ying revealed yesterday that China would increase its military spending by 7 per cent, or 1.3 per cent of GDP. It is the slowest increase since 2010.
More details will be provided later today, but most of that increase is expected to go to the Chinese navy so China can enforce its claims over the South China Sea.
Some commentators feel this could lead to further tensions in the disputed territory after US President Donald Trump promised to confront China with record increases for the US navy.
Professor Bates Gill, from the Australian National University (ANU), said China still had a long way to go to match US capabilities.
"They're starting again from a very low base in terms of it being a naval power. So we ought to expect that we will see the bulk of the major investment for Chinese military modernisation to be in its navy and from a Chinese perspective that's absolutely necessary," he said.
China's navy has been much more active in the South China Sea in recent months. Its first aircraft carrier, the Soviet-era "Liaoning", has taken a tour around the disputed territory.
Under President Xi Jinping, the Chinese navy, once limited to coastal operations, has developed rapidly.
Eighteen ships were commissioned in 2016, including missile destroyers, corvettes and guided missile frigates. But it still lags far behind the US which operates 10 aircraft carriers.
Mr Trump vowed to increase the US navy to 350 ships from the current 290 as part of one of the "greatest military build-ups in American history".
Xu Guangyu, a retired major general in the People's Liberation Army, told Chinese state media the development of the Chinese navy was an urgent priority.
"It's like a marathon and we're falling behind. We need to step on the gas," Mr Xu said.
Professor Gill said the Chinese especially needed to overhaul their outdated submarines if they wanted any real military power in South China Sea.
"They have to improve their operational abilities, lowering their sound signals to make that area more dangerous [and] more uncertain for other powers, especially for the United States, to be operating there ... it's going to require a lot of operations and training and it's going to take many more years," he said.
This year will also be a prelude to the all-important Communist Party's 19th National Congress, where five of the seven members of the all-powerful Politburo Standing Committee are expected to be replaced.
The Congress will be one of the few opportunities to see who is in or out of favour with President Xi Jinping and his senior leadership.
It is believed the President will use the Congress, expected by September, to consolidate his power base and secure a third term which could see him rule until 2027.
Topics: economic-trends, world-politics, china, asia