China's Wen focuses on fighting inflation, pollution

Enlarge Photo China's Premier Wen Jiabao delivers a speech during the opening ceremony of the National People's...

Wed, Mar 5 08:57 AM

Chinese Premier Wen Jiabao warned on Wednesday that overheating remains the nation's greatest economic threat even as global growth softens, vowing to fight price rises and feverish investment.

In his annual "state of the nation" report to the parliament, Wen singled out risks from pollution, misgovernment and a chasm between urban rich and rural poor as China prepares to showcase itself in the Olympic Games in August.

But he mostly dwelt on the risks that recent fast price rises pose to China's social fabric and double-digit growth, which has turned 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, meeting in the flag-festooned Great Hall surrounded by rings of police.

As Wen and President Hu Jintao head into their second five-year term in charge of a country with over 1.3 billion people, they have vowed to create a "harmonious society" cleansed of discontent about inequality, poor government services and environmental destruction.

But Wen's address underscored how China's leaders remain preoccupied with generating jobs and raising incomes while mastering feverish economic growth that has repeatedly 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 percent last year, well above the government's 3 percent target, mainly due to large increases in the cost of food and housing, Wen noted.

"Because factors driving prices up are still at work, upward pressure on prices will remain great this year," he said.

OLYMPICS SPOTLIGHT

Accompanied by occasional patters of applause from the parliamentary deputies, Wen also sought to turn some of the government's attention to longer-term worries over pollution, inequality and corruption.

Heavy polluters would be a particular target of government efforts to stifle excessive investment, and more spending would go to the poor countryside, Wen said.

"We will implement the plan to close down backward production facilities in the electricity, steel, cement, coal and paper-making industries", Wen said.

Beijing is preparing to host the Olympic Games in August, and the preparations have drawn a sometimes harsh international spotlight on China's environmental and social strains.

Wen stressed how seriously the government takes the Games, as well as the following Paralympics, as a chance to promote China's image to a sometimes wary world.

"They will be of great importance in promoting China's economic and social development and increasing friendship and cooperation," Wen said of the sports events.

The national parliament, whose members are carefully vetted by the ruling Communist Party, is due to pass a government reorganisation plan that Wen said would cut red tape and corruption.

Outside the Great Hall of the People, a lone protester threw leaflets up in the air, complaining about official corruption in the northern province of Shanxi. She was taken away by police.

Wen did not commit to any of the broader democratic reforms that even Party experts and some officials have recently urged.

But he did promise that industry associations and other non-government groups would be given a bigger say in making and overseeing policies.

(Additional reporting by Zhou Xin, Emma Graham-Harrison, Eadie Chen, Ben Blanchard, Lindsay Beck and Lucy Hornby)

RECOMMEND THIS STORY