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Wen pledges to address economic inequalities

Premier Wen Jiabao (溫家寶) yesterday admitted China faced "glaring" social problems and pledged more help for the poor to deal with simmering unrest as he forecast economic growth of eight percent this year.

In his annual "state of the nation" address to parliament at the Great Hall of the People, Wen said a priority of the government would be to ensure the country's rapid social and economic development was not reckless.

In the report Wen acknowledged that "we clearly see that problems and difficulties remain" in guiding the world's fastest growing major economy while keeping 1.3 billion people happy.

He cautioned that while opening up and reforming China would remain "the driving force behind all aspects of our work" development must not happen "recklessly."

"If we do not keep this in mind, we could end up just spinning our wheels and going nowhere or even suffering serious losses," he told the near-3,000 delegates at the National People's Congress.

As China has raced into the modern age, a stark lack of economic opportunities among its 800 million rural dwellers has become increasingly evident, raising fears of social unrest and turmoil.

Security around the congress remained intense with Tiananmen Square, adjacent to the hall, closed off to the public during the morning session as police and sniffer dogs patrolled the environs.

Government corruption and power abuse at the local level have been cited as major reasons hampering the development of the countryside and Wen vowed the issues would be tackled.

"Some low-income people lead difficult lives and there are more than a few factors threatening social stability," Wen said.

"Solving the problems facing agriculture, rural areas and farmers remains a top priority of all our work," said Wen.

One of the main concerns of the downtrodden rural Chinese is graft within government and Wen admitted that "formalism, bureaucracy, dishonesty, extravagance and waste are relatively severe."

"We must face the above mentioned problems squarely and continue to adopt measures to solve them," he said.

Education would be "a strategic priority" in the year ahead, particularly in the countryside where various fees for the poor would be exempted and free textbooks offered, he said to a smattering of applause.

Some 10.9 billion yuan (US$1.3 billion) will also be allocated to help retrenched workers locate employment.

To further help farmers, agricultural taxes will be abolished this year, while subsidies will be increased for grain producers.

To create enough employment for the nation's millions, Wen announced an economic growth target of 8 percent this year, up from previous years when 7 percent was deemed the minimum necessary to keep enough people out of unemployment.

"Maintaining steady and rapid economic development is an important issue that the government must successfully handle," Wen said in his speech.

"This is a period of important strategic opportunities for China, and the economy should grow rapidly, but not be allowed to overheat," he said.

But he warned of a possible return to overheating of fixed asset investment while supplies of coal, electricity, petrol and transportation "are still very tight."

There was also still "considerable" inflationary pressure on prices.
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