Struggle for influence

In today's China, a government's policy plan is the result of a complex battle for power. It's no longer decided by a handful of people in the corridors of power, but by a range of interest groups, all vying for their two cents worth.

Political reformers argue with hardliners, environmentalists with the advocates of growth at all costs in backwards provinces, state-run enterprises with private businesses and farmers with urban elites. So even though the 3,000 parliamentarians of the National People's Congress are not freely elected in the Western sense, the government gets understandably nervous when so many interest groups come together in Beijing to discuss China's problems.

State and party leader Xi Jinping has claimed more power for himself than any of his predecessors since Deng Xiaoping. But now, more than ever, opinion is starkly divided on the path China should be taking as it becomes ever stronger. The latest government position paper reflects the current balance of power in Beijing fairly accurately.

It was, for example, no coincidence that the most hotly debated issue at the National People's Congress was environmental protection. Shortly before it began, the government approved a highly critical and ambitious documentary about air pollution, with the new environment minister, Chen Jining, even praising it outright. The film was not made out of the blue, nor was it made without the government's endorsement - at a time when the party is, in fact, clamping down on freedom of expression.

Nevertheless, after attracting hundreds of millions of views, it fell foul of censors and was taken down from several prominent sites on which is had been available. Seemingly, this was the concession that environmental reformers had to make to security authorities, who maintained that there was an increased risk of uncontrollable mass movements.

The film can still be watched on YouTube, but in China, the video-sharing platform is only accessible via VPN. An estimated 90 million Chinese have VPN software - often available for free - which allows them to circumvent state censors. The documentary shows that environmental problems are high on the government agenda and to what extent Beijing is unnerved by public disquiet.

"The progress we have made still falls short of the expectations of our people," admitted Premier Li Keqiang.

But there were surprises in other areas, too: China wants to allow banks to set interest rates on savings freely by the end of the year. China's finance experts have been arguing about how free the financial system should be for some time. At the same time the government is introducing an insurance system for bank loans. There are also to be more private banks. Bank supervisory board boss Shang Fulin admitted there were weak points in the financial system, but says that, by and large, the risks are under control.

This evaluation is shared by the majority of foreign observers. The Chinese yen should also be given more room to maneuver. Markets are to play a bigger role in determining the future of enterprises. Those in debt, even state companies, will have to get used to less state help from here on.

It's clear that proponents of free markets are in a powerful position against the supporters of a bigger role for the state in the economy. The underlying debate is about the extent to which the state needs to keep a grip on the reins in order to ensure China's rise is manageable.

The market faction says too much "state" puts a brake on the economy, and that a fast-growing economy contributes more to prosperity and consequently to the stability of the country than even the most skillful state management. The supporters of the state economy warn that too much market can lead to the state losing control.

The economy is an increasingly important factor in foreign policy, while the military - mentioned only on page 37 of the premier's 39-page speech - has been so weakened by the anti-corruption campaign that its role is now smaller than it has ever been in the history of the People's Republic.

Li promised foreign companies a "stable, fair, transparent and reliable business environment " But this doesn't mean that Chinese companies won't be getting preferential treatment. Then again, there are no German ICE trains in France either, even though there are supposed to be open markets in the EU. Last year, a number of Western companies complained they were being disadvantaged in China, but last year also saw the country sign off on the world's highest number of overseas investments. So things can't be that bad.

Debate is also raging around the social system. Social politicians are at loggerheads with financial politicians over the question: how much welfare is necessary to secure social stability and how much welfare can China afford without plunging into the same trouble as many Western states.

On this front the social politicians got the upper hand. Experience in recent years has shown that Beijing puts its money where its mouth is. It doesn't really have a choice. The public pressure on Beijing to introduce reforms is growing.

One of Germany's leading experts on China, Frank Sieren has lived in Beijing for 20 years.