China wrapped up this year's annual session of the country's parliament after paving the way for a controversial third term for President Xi Jinping, with its neighbor Japan increasingly on guard against the Asian power's ambition.

In a bid to cement the authority of the Communist Party, the National People's Congress on Thursday adopted a resolution to alter Hong Kong's electoral system so that the mainland can exclude pro-democracy activists from the political arena in the territory.

Chinese President Xi Jinping (front) and Premier Li Keqiang are pictured on the last day of the annual session of the National People's Congress at the Great Hall of the People in Beijing on March 11, 2021. (Kyodo) ==Kyodo

Also at the parliament, the Chinese government pledged to take measures to surpass the United States as the world's biggest economy by 2035, highlighting Xi's eagerness to remain in power at least for the next decade.

In February, meanwhile, Xi's leadership enforced a law allowing its coast guard to use weapons in waters it claims, a move sparking fears in Tokyo that Beijing has been attempting to bring the Japanese-controlled disputed islands in the East China Sea into its fold.

"Xi has successfully contained the novel coronavirus, and then he has been trying to expel nuisances in Hong Kong and enhance citizens' loyalty to him by vowing to boost the Chinese economy," a diplomatic source in Beijing said.

"Unfortunately, Xi has been steadily preparing to become China's emperor for life," the source said.

"At the same time, Xi has been keen to bolster China's influence on its neighbors including Japan, and for that purpose, he may take every step he can. Japan should become much more vigilant against China," he added.

In the early 2010s, Beijing and Tokyo were mired in a territorial row over the uninhabited Senkaku Islands, called Diaoyu in China, but bilateral ties have been improving in the past few years by effectively shelving the spat.

File photo taken in September 2012 shows the Senkaku Islands in the East China Sea. (Kyodo) ==Kyodo

With its relations with the United States under former President Donald Trump deteriorating over several issues such as trade, Hong Kong and Taiwan, China has been extending its olive branch to Japan, one of the closest U.S. allies in the world.

Earlier this month, China's Foreign Minister Wang Yi stressed at a press conference that the nation's new coast guard law does "not target any specific country," while expressing hope for further improvement in ties with Japan.

Asked about how the two Asian nations can cooperate, Wang said China and Japan have "every reason to support each other" for the success of the Tokyo Olympics, which has been put off by one year to July, and the Beijing Winter Games in February 2022.

"Wang talked about Sino-Japanese relations in a very careful manner. It seems that China has put emphasis on Japan as its tensions with the United States have shown little sign of easing soon," a source familiar with Beijing's thinking said.

"For peace and stability in the region, Japan should maintain the current relations with China, while gauging how U.S. policy toward Beijing will change" under the administration of U.S. President Joe Biden, who took office in January, he said.

At home, however, the Chinese Communist Party has taken actions to strengthen Xi's clout, erode democracy and freedoms in Hong Kong and accelerate the country's military rise in the nearby waters.

In 2018, China removed from its Constitution the two-term limit for the president and vice president, which would enable Xi, who became the head of the party in 2012, to hold on to power for life.

All eyes are on whether Xi will be re-elected as leader of the Communist Party at its twice-a-decade congress in autumn next year.

An anti-government protester is held by a police officer in the populous shopping district of Causeway Bay on Hong Kong Island on Oct. 1, 2020, China's National Day. More than 80 people were arrested for taking part in unauthorized assemblies and other offenses. (Kyodo)

In late June 2020, the mainland enacted a national security law for Hong Kong to crack down on what it views as secession, subversion, terrorism and collusion with foreign forces, aiming to quell protesters against the pro-Beijing government in the territory.

China also plans to increase its defense spending in 2021 by 6.8 percent from last year to 1.36 trillion yuan ($210.14 billion), as Xi has promised to give the nation's military forces "world-class" status by the mid-21st century.

Even after the coast guard law takes effect, Chinese official vessels have frequently entered Japan's territorial waters around the Senkakus, with Beijing insisting that the islets are the country's "inherent territory."

To counter China's movement, Japanese policymakers have recently argued that it is possible for the nation's coast guard to fire on foreign official ships under laws by regarding their forcible landing on the islands as violent crimes.

"There is speculation that China's economy will become the world's largest as early as in 2028, so it is still necessary for Tokyo to get along with Beijing in economic terms," a Japanese government source said.

"But we should also warn against China's military moves. We have to seriously map out our diplomatic strategy toward China, while closely watching how the country will change under the long-term rule by Xi," the source said.

He added Xi's first state visit to Japan since he became president in 2013, which has been delayed due to the pandemic, may be canceled against a backdrop of backlash from conservative lawmakers of the ruling party headed by Prime Minister Yoshihide Suga.

"Under the present circumstances, it is impossible for Suga's government to invite Xi to visit Japan," the source said. "But if Japan proposes the cancellation of Xi's visit, that could shake relations between Japan and China."

At the press conference on the sidelines of National People's Congress, Foreign Minister Wang was mum about whether Beijing and Tokyo have been arranging Xi's trip to Japan.

This year's session of China's parliament was held for seven days through Thursday.