Chinese parliament opens with sharp rise in defence budget

China’s annual parliament kicked off today with a steep hike in the 2014 defence budget, jangling the nerves of its regional rivals; an economic growth target for the year of 7.5 per cent; and a declaration of war on pollution.

The National People’s Congress (NPC) is largely a formality, where nearly 3,000 delegates gather in the Great Hall of the People, which is bedecked in red flags, to give rubber-stamp approval to policies decided behind closed doors by the Communist Party elite months earlier.

Premier Li Keqiang addressed the gathering, which gives a useful insight into the economic and policy goals of the leadership for the year despite its ceremonial nature.

“We will resolutely declare war against pollution as we declared war against poverty,” Mr Li said, adding that the government would fight corruption “without mercy” and “crack down” on terrorism.

The defence budget decision is closely watched and is especially so this year as China is taking a more assertive position in disputes with its neighbours over territories in the South China Sea.

Relations are especially tense with Japan over an archipelago of uninhabited but resource-rich islands known as Senkaku in Japan and Diaoyu in China. The islands are controlled by Japan but are claimed by China and Taiwan.

“We will resolutely safeguard China’s sovereignty, security and development interests – we will not allow anyone to reverse the course of history,” the premier said, promising to “build China into a maritime power”.

The defence budget is set to rise to 808.23 billion yuan (€96 billion), which means spending on defence is higher than the 9.5 per cent rate of increase in total government expenditure.

Analysts believe China’s actual military spending is significantly higher than announced, as it does not include state security spending. The Pentagon estimates it at between €98 billion and €157 billion in 2012.

China’s spend is dwarfed by spending in the US, which was €461 billion last year.

On microblogging website Sina Weibo, one contributor, Mao Xiao Wei, wrote in response to Mr Li’s speech: “We didn’t hear too much about Mao Zedong Thought, Deng Xiaoping Theory or Scientific Development. Interesting. All we heard was housing reform, education reform, medical reform, economic reform and internet reform. 2014 is definitely a year of reform. But I am not clear how they will reform.”

Another contributor, Danxiao Rushu de Ciwei, wrote: “Dear Chairman Xi and Premier Li, can we make houses a bit cheaper? Can we pay a bit less social insurance? People are very sad about the severe smog.”

Turning to the economy, Mr Li said “painful structural adjustments need to be made” in China’s development, he said, though he said economic growth would remain stable, and forecast growth this year of 7.5 per cent which is in line with expectations.

Reforms were the “top priority” for the government and had entered “a critical stage”, he said.

“We must rely on the people, break mental shackles and vested interests with determination as great as a warrior cutting his wrist, and deepen reforms in all fronts,” said Mr Li.

The congress marks one year since Xi Jinping was confirmed as president and takes place over 10 days at the Great Hall, which is on Tiananmen Square at the heart of Beijing.