Fri, Mar 07, 2003 - Page 1 News List

Relieving rural poverty becomes China's top goal

SPENDING PRIORITIES The military is to get the lowest rise in spending for 14 years while alleviating the lot of the rural poor takes center stage

AP , BEIJING

Preparing for new leadership, China proposed its lowest military spending hike in 14 years yesterday and earmarked funds for the countryside to move toward the government's top goal -- helping those left behind by convulsive economic reform.

The national budget, released on the second day of the National People's Congress, China's legislature, appears in line with the priorities identified by a government trying to improve the living standards of its people -- and thus maintain legitimacy as it completes a leadership transition.

"Implementing the budget for 2003 will be an arduous task for us," said Finance Minister Xiang Huaicheng (項懷誠) in a budget address to the legislature. Still, he sounded a positive note about the previous year.

"The national economy continued to grow rapidly, all social undertakings progressed and the living standards of the people further rose despite the adverse effects of a notable slowdown in the growth of the world economy," Xiang said.

China also announced a sweeping government reform to consolidate trade operations, streamline its communist-era economic planning apparatus and create an oversight agency for banks. The moves will bring China's ministerial system -- once based on the control-oriented needs of Marxist-style communism -- closer to Western models.

The two-week congress where the budget was presented will appoint a successor to 76-year-old President Jiang Zemin (江澤民), who is stepping aside but will retain influence through a key military post. The presidency is almost certain to go to Hu Jintao (胡錦濤), 60, who took over in November as Communist Party general secretary.

He and other new leaders have focused on domestic issues, particularly reducing poverty, in the months between their ascension to the Communist Party's top spots and their appointment to equivalent positions in the government.

In addition to anti-poverty measures, the new Chinese budget promises to increase spending on infrastructure, the environment and what it calls "the strategic restructuring of agriculture."

China has acknowledged it needs Herculean efforts in those areas to modernize as it tries to create what it calls a "well-off society" and a friendly climate for international investment.

An increase of 4.6 billion yuan (US$550 million) was announced to double the subsistence allowances for urban residents living below the poverty line. That would have an immediate effect for tens of millions of Chinese who have barely enough to get by. In addition, an increase of 4.7 billion yuan (US$570 million) will subsidize re-employment programs.

The announced rise in the military budget -- 9.6 percent -- was unexpectedly low and noteworthy because it followed 13 consecutive years of double-digit defense spending increases.

The new military budget was drawn up, according to Xiang, "with a view to adapting to changes in the international situation, safeguarding national security and sovereignty and territorial integrity and raising the combat effectiveness of the armed forces in fighting wars to defend the country with the use of high technology."

Such an increase would raise China's announced military budget to 185.3 billion yuan (US$22.4 billion), although actual spending is thought to be typically much higher than what it announces.

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