China's economy, govt revamp in focus as parliament set to open

China opens its annual parliamentary session on Sunday, with the National People's Congress (NPC) set to implement the biggest government shakeup in a decade as Beijing confronts a host of challenges and looks to revive its COVID-battered economy.

Premier Li Keqiang will open the session at 9am (0100 GMT), reading out a government work report that is expected to include an economic growth target that could range as high as 6% in a bid to boost confidence and build on a promising post-pandemic recovery, sources involved in policy discussions said.

Li and a slate of more reform-oriented economic policy officials are set to retire during the congress, making way for loyalists to President Xi Jinping, who further tightened his grip on power when he secured a precedent-breaking third-leadership term at last October's Communist Party Congress.

During the NPC, former Shanghai party chief Li Qiang, a longtime Xi ally, is expected to be confirmed as premier.

The 63-year-old Li will be tasked with reinvigorating an economy, the world's second-largest, that grew just 3% last year, bruised by three years of Covid curbs, crisis in its vast property sector, a crackdown on private enterprise that has rattled investors, and weakening demand for Chinese exports.

The rubber-stamp parliament, which will end on March 13, will also discuss Xi's plans for an "intensive" and "wide-ranging" reorganisation of state and Communist Party entities, state media reported on Tuesday, with analysts expecting a further deepening of Communist Party penetration of state bodies.

"We might see institutional changes that indicate an elevated importance of, and more party control over, the financial regulatory system," Goldman Sachs analysts wrote.

On the opening day of the NPC, China is also likely to announce its central and military spending budgets.

The gathering of nearly 3,000 delegates, the first since China abruptly dropped its zero-Covid policy in December following rare nationwide protests, will take place in the cavernous Great Hall of the People on the west side of Tiananmen Square amid tight security in the capital.

Globally, China faces numerous headwinds including worsening relations with the US, which is trying to block its access to cutting-edge technologies, and fraught ties with western Europe, a crucial trading partner, over Beijing's diplomatic support for Russia in its war in Ukraine.