Chinese Premier Wen Jiabao warned on Wednesday that overheating remains the nation’s top economic foe even as global growth softens, vowing a tough fight against price rises and feverish investment.
In his annual State of the Nation report to the Parliament, Wen targeted pollution, misgovernment and the gulf between urban rich and rural poor as China prepares to go on show at the Olympic Games.
But he mostly dwelt on the risks heady inflation poses to China’s social fabric and double-digit growth, which has transformed the country into the world’s fourth-biggest economy.
”The current price hikes and increasing inflationary pressures are the biggest concern of the people,” Wen told nearly 3 000 deputies of the National People’s Congress, gathered in the Great Hall of the People guarded by cordons of police.
As Wen and President Hu Jintao head into a second five-year term running the country of over 1,3-billion people, they have vowed to build a ”harmonious society” freed of strains over inequality, struggling rural schools and healthcare and noxious air and water.
Yet Wen’s speech underscored how Beijing remains preoccupied above all with generating jobs and lifting incomes, especially for hundreds of millions of poor farmers, while also taming hectic industrial expansion that has bucked cooling measures.
”The primary task for macro-economic regulation this year is to prevent fast economic growth from becoming overheated growth and keep structural price increases from turning into significant inflation,” he said.
Consumer inflation averaged 4,8% last year, well above the government’s 3% target, mostly due to big rises in the cost of food and housing, Wen noted.
Annual consumer inflation hit an 11-year high of 7,1% in January, stoking official worry that it could spread.
”Because factors driving prices up are still at work, upward pressure on prices will remain great this year,” Wen said, vowing ”powerful measures” to counter inflation.
By contrast, he made just glancing reference to the credit crunch and global economic slowdown that have spooked the United States and Europe, saying China would watch developments and ”take prompt and flexible measures”.
Olympics spotlight
Beijing is preparing to host the Olympic Games in August, and the vast preparations have drawn a sometimes uncomfortable international gaze on China’s environmental and social strains.
Wen stressed the Games, as well as the following Paralympics, could promote China to a world sometimes wary of its fast-expanding economic and political clout.
”All sons and daughters of the Chinese nation are looking forward to them,” Wen said of the sports spectacles.
”They will be of great importance in promoting China’s economic and social development and increasing friendship and cooperation.”
But accompanied by dutiful applause from ranks of deputies, Wen also sought to turn some of the government’s attention to longer-term worries over pollution, inequality and corruption.
Heavy polluters will be a particular target of government efforts to stifle excessive investment, Wen said.
He also promised more spending on sewage treatment, clean energy, and repairing polluted rivers and lakes.
The national Parliament, whose members are carefully vetted by the Communist Party, is due to pass a government reorganisation planthat Wen said would cut red-tape and corruption.
Outside the Great Hall, a lone protester tossed leaflets in the air, decrying official corruption in the northern province of Shanxi. She was quickly taken away by police.
Wen did not commit to the broader democratic reforms even Party experts and some officials have recently urged.
Industry associations and other non-government groups will gain a bigger say in state policy, and drafts of proposed government regulations would be released to the public for comment, he said.
One of the longest bursts of applause in Wen’s poker-faced delivery came when he warned Taiwan, the self-ruled island that holds its presidential election on March 22, that China would never abandon its demands to unite the island as part of ”one China”.
”Reunification of the two sides is inevitable,” Wen said. – Reuters