After economic boom, China now focuses on quality of life

(CBS News) China's annual session of parliament is underway Tuesday as the economic giant lays out plans for the future and prepares for a new leader.

It's a gathering of delegates from every corner of China, every province, every ethnic group, including farmers, local bureaucrats, business leaders and military officers.

It's called the National People's Congress, but it's all organized by the Communist Party, and the party is worried about its support among the Chinese people. Party officials are using this grand stage to admit that, in the rush to create China's economic miracle, they neglected China's quality of life.

China's Premier Wen Jiaboa acknowledged government mismanagement in every aspect of daily life. In housing, health care, social security and official corruption, Jiaboa promised an era of reform.

But nothing has angered China's public quite like the unprecedented air pollution. For 14 days this year, the air in Beijing has been dangerous to breathe, and party officials like spokeswoman Fu Ying are admitting it's a problem they have to solve. "Every morning I check for smog," Fu told a packed press conference, "and I have two masks at home -- one for me, one for my daughter."

The party is using all these confessions and candor to argue that it's listening to public concerns.

The congress will end a week from Sunday with the formal anointment of Xi Jinping as China's next president.

Two parts of Jinping's new budget are revealing: massive deficit spending to keep China's economy growing, and a big increase for the military. It's still roughly a fifth of what the U.S. spends on defense, but iti represents China's largest military budget in decades.