Beijing is set to announce its economic growth target and endorse new rules around foreign investment in the next two weeks during its major annual parliamentary meeting: the National People's Congress.
The gathering of nearly 3,000 representatives from different strata of Chinese society is typically ceremonial in nature. The real power in the country lies in the Communist Party and its Politburo Standing Committee, headed right now by President Xi Jinping. But announcements made during the congress can shed some light on government policy.
This year's meeting also takes place as the international legal battle over Chinese telecom giant Huawei intensifies, and U.S.-China trade negotiations reach a critical point, with some reports saying a trade deal is close at hand.
The second session of the 13th National People's Congress (NPC) will kick off on Tuesday morning and end next week Friday (Mar. 5-15), a spokesperson announced during a press conference Monday morning.
Separately, a political advisory body — the Chinese People's Political Consultative Conference — will also be meeting at about the same time. As a result, the annual March meetings are typically called "Two Sessions."
This year's meetings come as the People's Republic of China celebrates its 70th anniversary, and are accompanied by their own promotional ploys. They include claims of 5G service — the next generation wireless network that provides super fast mobile speeds — in the press area, as well as an awkwardly phrased English rap song entitled "'Two sessions': To the world from China."
Growth target
Investors are awaiting more serious details on Beijing's policies in the year ahead:
At Tuesday's opening, Premier Li Keqiang is expected to reveal the official economic growth target for 2019. Many economists predict the figure will be around 6 percent to 6.5 percent, a slower rate than last year. The world's second largest economy reported growth of 6.6 percent in 2018, the slowest pace since 1990.
On overall macroeconomic policy, Morgan Stanley economist Robin Xing said in a Thursday note he expects more fiscal easing and a slight increase in broad credit growth, which would help economic growth improve from the second quarter.
Investment law
The congress is scheduled to vote on March 15, the final day of the meeting, on a new law on foreign investment that seeks to increase intellectual property protection and limit technology transfer. If passed, the law will abolish three existing regulations on equity joint ventures, wholly foreign-owned enterprises and contractual joint ventures, according to an English translation of the draft on China Law Translate.
"Voting" by the NPC is far more symbolic than the term is understood in the U.S. Last year, the congress of about 3,000 delegates overwhelmingly approved the removal of term limits, allowing Xi to remain in power beyond the conclusion of his second five-year term.
Trade tensions
China has come under increased pressure from foreign countries that have complained of unequal business access to the local market. Points of contention include alleged forced transfer of technology and intellectual property protection. Trade tensions with the U.S. escalated last year after President Donald Trump announced additional tariffs on $250 billion worth of goods from China, and Beijing countered with its own duties on $110 billion worth of U.S. goods.
Against that backdrop, work on the proposed new foreign investment law has moved quickly. Less than three months ago, the NPC Standing Committee began soliciting comments on its first draft. NPC Observer, a blog founded by Harvard Law student Changhao Wei, pointed out in a post that the draft is "significantly" shorter than one from the Ministry of Commerce in 2015 and has removed most of the details. The blog noted a second version of the latest draft was released in late January and is similar to the December version.
"So, it's statements on a lot of aspirations, and those are positive," said Tim Stratford, chairman of the American Chamber of Commerce in China, said Monday at an event in Hong Kong. "But then, how are they going to be implemented in practice, that's what we don't know."
"There's so much of the business climate right now that sort of inspires a wait-and-see attitude, and I think we don't like to wait and see," said Stratford, who is also managing partner at law firm Covington and Burling's Beijing office. "That's not what we're in our jobs for. We need to make decisions and we need to move ahead."
— CNBC's Kelly Olsen contributed to this report.