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The annual meeting of China's legislature, the National People's Congress (NPC), has always been more political pep rally than lawmaking event. Dozens of flags are hoisted atop Beijing’s Great Hall of the People, flowerpots cover huge swaths of Tiananmen Square, and banners carrying the ideological slogans of the moment are everywhere to be seen. Amid the trappings of a grand political convention, the 3,000 delegates—most of them selected by the Communist Party, which also preapproves the laws they'll vote on—sit through 10 days of work reports presented in a series of speeches by leadership. At the end of the session, freshly re-educated delegates are expected to carry Beijing's doctrine back home.

During this year's congress, which opened March 5, the message sent from Beijing had a degree of urgency to it. The emphasis from the Party leadership has been on the social inequalities brought about by the country's rapid and chaotic economic growth. One of the important goals President Hu Jintao set for this year's congress is to promote a "harmonious society" by finding ways to address the populace's many grievances while bolstering central Party authority over the provinces. The widening gap between China's rich and poor—evident in a sharp rise in public demonstrations against government corruption, labor strife and other civil disturbances—may threaten Party rule, higher-ups fear. "When the leadership starts talking about harmony," says Wu Guogang, professor of political science at the University of Victoria in British Columbia, "it's a pretty good indication that they're afraid things aren't harmonious at all."

Beijing's sense that the country is reaching a boiling point is heightened by its own estimates, which show that in 2003, some 3 million citizens engaged in 58,000 public protests, up 15% compared with the previous year. Figures for last year are not available, but there's been no apparent letup in unrest. In November, for example, as many as 100,000 Sichuan province residents physically blocked construction of a hydroelectric dam before police could regain control.

In most cases, riots and protests are directly linked to economic issues. Over the past decade, China's State Letters and Visits Bureau—which collects complaints from aggrieved citizens—has seen a substantial increase in petitions over the appropriation of farmland and homes by local officials and property developers for new public and private projects. Meanwhile, according to a report released last year by the Chinese Academy of Social Sciences, urban incomes have grown so rapidly that they now exceed rural incomes by more than 300% on average. "China is in the robber-baron stage of its economic development," says Nick Young, editor of the Beijing-based China Development Brief, a quarterly journal on civil society. "People are dispossessed, and that causes social strains."

Easing the tension depends in part on how successful the government is in curbing the excesses of the economic boom. According to recent reports by China's official news agency, NPC delegates will spend the week discussing topics like poverty alleviation, food safety and better conditions for workers. And last Saturday, Premier Wen Jiabao announced that the country would abolish taxes on farmers next year, two years ahead of schedule. "The Communist Party wants to maintain its monopoly on power," says Joseph Cheng, a political scientist at City University of Hong Kong, "But it is sophisticated and understands that it needs to address social grievances by making the cadres more responsive, more competent."

This does not mean Beijing won't reach for the whip. During a session of the Chinese People's Political Consultative Conference, an advisory body whose annual meeting convenes ahead of the NPC's, Hu delivered a surprisingly conciliatory speech on the possibility of talks with Taiwan, saying that the government "will continue to seek prospects of peaceful reunification" with the island. Yet topping the NPC agenda this week is ratification of a new "antisecession" law, which may set out the steps Beijing would take should Taiwan declare independence from the mainland.

In domestic matters, too, the same combination of hard and soft is evident. Notwithstanding talk about addressing social strains, in April the NPC's Standing Committee will begin to devise a law to strengthen police powers and penalties for disturbing public order. According to a draft of the proposed changes seen by TIME, the new law would allow police to increase fines, seize property, close down businesses, and hold under house arrest anyone who "violates public-security management." Says Liu Junning, a political scientist at the Chinese Cultural Research Institute in Beijing: "If the ‘harmonious society' is the carrot, then these laws are the stick."

• Susan Jakes | Beijing
• At the National People's Congress, China's leaders try to handle a rising tide of public discontent