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China lays stress on equitable growth

Pallavi Aiyar

Thrust to rural infrastructure development

Beijing: China must avoid a strategy of "seeking only faster growth" and focus instead on efforts to create more equity, save energy and cut pollution, said Chinese Premier Wen Jiabao on Monday at his annual address to the National People's Congress (NPC) or Parliament.

Mr. Wen's speech made clear that the focus of the Government would be on tackling sources of social unrest such as illegal land grabs, corruption and environmental degradation.

Tens of thousands of mass protests in recent years, the majority in the relatively poor countryside have raised a red flag in Beijing where the authorities worry about the consequent threat to the political stability. Since last year, the central government has thus made the creation of a "new socialist countryside" a major plank of its domestic policy.

Mr. Wen promised to continue efforts to achieve this goal through more direct subsidies to grain producers, the acceleration of the development of rural infrastructure and continuing hikes in funding for education and health services in the countryside.

Tuition and other fees for all rural students will be eliminated, easing the financial burden on 150 million households, he said. The Government would step up spending on rural primary and middle schools by 21 per cent, to $29 billion.

Mr. Wen promised greater central government support for health care in rural areas where 90 per cent of the population has no health insurance. He said a trial cooperative medical care system would be extended to cover 80 per cent of the country, with the Government more than doubling subsidies to the project, to $1.31 billion.

The Premier also pledged to protect agricultural land from unauthorised use for construction, a reference to the fairly common practice whereby local officials expropriate land from peasants and reallocate it to real-estate developers. He did not specify the measures by which this would be achieved.

Growth target

Mr. Wen announced a relatively modest, economic growth target of 8 per cent for 2007. The Government had set the same target last year but GDP actually rose by 10.7 per cent in 2006. A World Bank report, released last month, predicted a 9.6 per cent growth for China this coming year.

The Premier acknowledged that this year's growth outcome might also exceed the mark set, but added that the modesty of the target reflects the importance Beijing intends to give to increasing efficiency, saving energy, cutting pollution and avoiding the blind pursuit of growth.

Though the energy consumption per unit of output fell by 1.2 per cent last year, this was well short of its own goal of a 4 per cent reduction per unit. Mr. Wen thus stressed that "excessive energy consumption and serious environmental pollution" along with a more balanced growth of the economy were the pressing challenges facing the country.

He also dwelt at some length on Beijing's determination to boost domestic consumption as part of a series of measures to reduce China's record trade surplus which ballooned by 74 per cent to $177.5 billion in 2006.

Mr. Wen's speech only touched on politics and foreign policy lightly.

Regarding military modernisation, he said "building a solid national defence system and a powerful people's army" was a "strategic task" facing the country. China announced a 17.8 per cent increase in defence spending, its biggest in five years, on Sunday.

The NPC, which comprises nearly 3000 delegates, will continue to meet for another 12 days.

Among the bills it is expected to pass into law during this session, is a controversial property bill that seeks to put private and state-owned property on the same legal footing.

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