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China's top political event lures country’s richest

Preparations ahead of upcoming opening sessions of the Chinese People's Political Consultative Conference (CPPCC) and the National People's Congress (NPC).
WANG ZHAO | AFP | Getty Images
Preparations ahead of upcoming opening sessions of the Chinese People's Political Consultative Conference (CPPCC) and the National People's Congress (NPC).

An increasing number of China's wealthiest individuals are participating in the country's biggest annual political event, underscoring the country's close ties between politics and business.

More than 200 wealthy Chinese are delegates to two major political meetings this year, several media outlets reported this week, up from 155 last year. Among them are 36 billionaires, including Li Hejun, who was recently ranked the country's richest man by Shanghai-based wealth tracker Hurun.

China's parliament, the National People's Congress (NPC), and its advisory body, the Chinese People's Political Consultative Conference (CPPCC), both kick off their annual sessions this week and are closely followed by global markets for future direction on the world's number two economy.

Other delegates to both meetings include China's third-richest man Zong Qinghou, CEO of beverage firm Hangzhou Wahaha, Tencent's Pony Ma who is number five on the country's rich list, and Lei Jun, founder of Xiaomi and tenth-richest man.

Acceptance into the political arena is typically sought-after among China's richest, both for personal reasons as well as to seek favorable policies for their respective enterprises.

"A lot of the rich in China have gotten their wealth from property, which is really about politics. That's why they are very eager to be part of political parties like the NPC and CPPCC," said independent economist and long-term China watcher Andy Xie.

In the past, political connections in China's corporate world were synonymous with crony capitalism, but President Xi Jinping's two-year old corruption crackdown is increasingly changing the nature of the relationship.

"In China, it's now quite important for businesses to have a healthy relationship with the government, and vice-versa," explained Alastair Chan, economist at Moody's Analytics, citing Beijing's push to reform its state-owned enterprise (SOE) sector and opening up financial markets.

With the NPC expected to provide more clarity on planned infrastructure, investment and trade networks across Europe and Asia as part of Beijing's 'going global' strategy, businessmen are also keen on new opportunities.

"We expect to see more overseas infrastructure projects confirmed in 2015 and more Chinese companies, both state and private, to leverage these opportunities to expand their businesses and distribution channels overseas," Barclays analysts said in a recent note.

NPC still meaningful?

Some experts even go as far as to say the NPC has merely become a networking event among businessmen and politicians, drawing parallels with the World Economic Forum in Davos.

"In China, decisions are made by very few people. These types of conventions are not really meaningful in substance…The rich get to schmooze with major politicians," Xie said.

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While Beijing is expected to forecast a lower gross domestic product (GDP) target of around 7 percent for 2015 as it restructures its economy, economists aren't expecting much else in terms of news.

"The NPC meeting is one of the big set-piece events in China's political calendar but it typically includes little in the way of policy announcements. Although the Congress votes on some legislation, it primarily acts as a rubberstamp to the annual budget and to the various government reports," research house Capital Economics wrote in a report.

"Moreover, by the time policy proposals reach the NPC they have been discussed at length within the government and, often, outside government as well, leaving little chance of surprise," it added.