China: Boost domestic consumption
BEIJING | China’s prime minister called Monday for a boost in domestic consumption to keep the world’s second-largest economy expanding while overseas markets remain weak.
In a speech to open the annual National People’s Congress, Prime Minister Wen Jiabao said the government planned growth of 7.5 percent this year — a target below previous goals.
Mr. Wen described boosting domestic consumption as “crucial” to China’s future, saying the government will boost spending on social services and raise incomes for middle- and lowincome groups, as well as expand consumer credit.
Mr. Wen’s report outlining priorities for 2012 is China’s “state of the nation” address and opens 10 days of meetings for nearly 3,000 delegates in the Great Hall of the People in central Beijing.
The meeting comes amid not only economic concerns, but a challenging leadership transition. The congress is expected to be the scene of behind-thescenes political bargaining as President Hu Jintao and the most senior Communist Party leaders begin stepping aside this fall — after a decade in power — to make way for a younger generation.
China’s economy grew by 9.2 percent last year, down from 10.3 percent in 2010, and many local governments are wracked with debt. In addition, with Europe in crisis and the U.S. recovery fragile, demand for Chinese exports is weakening.
“I wish to stress that in setting a slightly lower GDP growth rate, we hope . . . to guide people in all sectors to focus their work on accelerating the transformation of the pattern of economic development and making economic development more sustainable and efficient,” Mr. Wen said.
He said China was targeting an increase of central and local government spending of 14.1 percent over last year, totaling 12.4 trillion yuan ($1.97 trillion), of which slightly more than half would be central government spending.
The prime minister said China will target government waste by imposing limits on official overseas trips and official vehicles, both huge drains on local government budgets.
He also made several gestures to the almost 50 percent of China’s 1.3 billion people who live in rural areas that are dependent on agriculture. He said subsidies for agriculture would be boosted, promised more tuition assistance for rural students, and warned against government seizures of land, which have become a source of discontent in China and sparked a major revolt last December in Wukan.
“Farmers’ rights to the land they contract to work on, to the land on which their houses sit, and to proceeds from collective undertakings, are property rights conferred by law, and these rights must not be violated by anyone,” he said.
Land grabs cause more than 65 percent of rural China’s “mass incidents” — the one-party government’s euphemism for large protests — according to official think tank the Chinese Academy of Social Sciences.
In Wukan, in the southern province of Guangdong, the simmering anger led to bold protests and the overthrow of leaders residents said had run the village like “local emperors,” stealing their land for years. The protest attracted worldwide attention and a rare backpedaling by provincial officials, including a pledge that the land seizures would be investigated and elections held.
Mr. Wen also alluded to ethnic-based violence that has been on the uptick in recent years, especially in Tibet and the far west Xinjiang region.
“China is a unified, multiethnic country,” he said. “Only when its ethnic groups are united as one and work for the development of all can China achieve prosperity.”