03/14/2006, 00.00
CHINA - npc
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National People's Congress approves cosmetic changes rather than real reforms

Wen Jiabao's final speech is full of promises but few concrete proposals to solve real problems. Banks and currency remain in the state's tight grip.

Beijing (AsiaNews) – As expected, the National People's Congress ended today with almost unanimous support for the government's economic plan prepared months ago by the Communist Party.

In his final speech, Prime Minister Wen Jiabao stressed that "there would be no turning back" on economic reforms, and opened the door to massive government investments in rural areas to build roads, water and gas mains, schools, hospitals, and the telecommunication infrastructure. New venues would thus be opened for China's economy:

1)     by improving life in the countryside and containing unrest in areas so far neglected by city-centred development;

2)     creating new markets for Chinese industry which is suffering from overproduction;

3)     refocusing China's economy towards the domestic market hitherto too dependent on foreign exports.

Wen announced that the government has set a target of 8 per cent growth rate for 2006 (it was 9.3 last year), and 7.5 percent annually for the five years up to 2010. This would reduce energy consumption and pollution without restructuring the country's economic model based on inefficient energy use and highly polluting coal.

The Prime Minister said that the value of the yuan won't change and reiterated his government's intention of maintaining tight control over the country's banking system. Under current rules the government can subsidise state industries but at a high cost that includes corruption, insolvencies, bankruptcies and an overall weak banking system.

Still, Wen pledged an iron fist against corruption and graft, especially land grabs against farmers that are fuelling rural resentment and unrest; he did not however spell out how he intends to go about doing this.

A bill to defend private property and grant land title to farmers, which was supposed to be adopted this year, was not even discussed. Instead, Wen said China's current system of collective ownership was still the best.

Many delegates to the congress expressed fears that foreign powers and companies might be behind the growing social unrest as a way of underming the country.

Wen further appealed to patriotism addressing the Taiwan issue. He accused Taiwan's President Chen Shui-bian of provoking China by intensifying efforts to make the island independent. At the same time he offered direct peace talks with those on the island who accept the idea of "One China".

The Prime Minister defended the government's decision to increase military spending by 14 per cent (the highest annual increase in the last 20 years) saying that it was needed to modernise the army and boost the country's defence capabilities.

In the new five-year development blueprint, there are also multi-billion-dollar construction projects like diverting water from the country's south to the north or a gas pipeline from western frontiers to the coastal east.

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