China: Boost do­mes­tic con­sump­tion

The Washington Times Daily - - Business -

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.”

Wen Ji­abao

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