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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4510)	3/6/2005 11:25:57 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Wen spells out action to beat inequality and inefficiency By Mure Dickie in Beijing Published: March 7 2005 02:00 \| Last updated: March 7 2005 02:00 Wen Jiabao, China's premier, laid out his government's agenda for the next year at the start of the annual National People's Congress with a speech stressing action to address economic inequalities, inefficiencies and imbalances. Mr Wen struck a confident note in an address to the NPC, China's rubber-stamp parliament, touting the government's success in controlling access to land and credit in order to rein in excessive fixed asset investment. China has set an official target of 8 per cent growth in gross domestic product for 2005 - above the 7 per cent target of recent years, but still well below the 9.5 per cent growth officially recorded for 2004. Beijing is also hoping to bring China's international payments into "basic balance" and to reduce dependence on trade for growth, with officials targeting a 15 per cent increase in total export and import volumes, a dramatic slowing from last year's 36 per cent. In his address, Mr Wen highlighted the government's determination to focus on the quality of economic growth, an approach summed up as "putting people first and government for the people" to achieve a harmonious society. China should stress the "five balances" - including balancing urban and rural development, human and environmental development and economic and social development - while weighing national against local needs in a strategy of "treating the whole country like a single chessboard", Mr Wen said. The premier responded to concerns that rural areas are falling behind by saying China's farm tax would be scrapped in 2006, two years earlier than scheduled, and announcing fiscal transfers to grain-producing counties. Pupils in poor areas would be given free textbooks and exempted from school fees from this year, a policy that would be extended to all rural areas by 2007. However, such measures will not reverse inequality. While 2004 was a good year for farmers, rural disposable incomes grew only 6.8 per cent compared with 7.7 per cent in towns where earnings are already three times higher. While the top economic goals set by Mr Wen include creation of 9m new urban jobs and an urban unemployment rate of less than 4.6 per cent, they offer no new targets for rural residents. Beijing's aim of achieving "basic balance" in international payments reflects concerns about the impact of capital inflows that sent foreign exchange reserves soaring more than $200bn (€151bn, £104bn) last year. Guo Shuqing, director of the State Administration of Foreign Exchange, was yesterday quoted as saying Beijing would try to manage the surplus by limiting exports by inefficient or polluting companies and by permitting more capital outflows. But Mr Guo denied the fall in the US dollar would necessarily prompt a sell-off of dollar-denominated reserve assets. "If we sell US dollars now when it is tumbling, it means we lose money. If we do sell them, we have to buy other currencies such as the euro. But what if the euro drops?" the official China Daily newspaper quoted him as saying. news.ft.com