By Michael Bristow
BBC News, BeijingChinese Premier Wen Jiabao has said China must reverse its widening income gap between rich and poor.
He said benefits of a growing economy - expected to expand by 8% this year - should be distributed more fairly.
In a major speech at the start of China's annual parliamentary session, the premier also said the economy needed restructuring.
He wants Chinese firms to improve their ability to innovate, producing high-tech and high-quality products.
The premier's comments came in a wide-ranging speech delivered in Beijing's Great Hall of the People, where the largely ceremonial parliamentary session is being held.
In the keynote speech, Mr Wen reviewed the government's work over the past 12 months and set out its policy goals for the coming year.
Registration reform
The speech touched on many issues, but on a number of occasions the premier spoke about the need to make China a fairer society.
"We will not only make the 'pie' of social wealth bigger by developing the economy, but also distribute it well," Mr Wen told about 3,000 delegates, returning to a theme that he has often spoken about during his premiership.
"[We will] resolutely reverse the widening income gap," he added later, in a speech that lasted more than two hours.
As part of that project, the premier said China would reform the household registration system that classifies people as either city or rural dwellers.
This controversial system means many migrant workers - farmers who travel to towns and cities to find better-paid work - are unable to get proper services.
"[We will] gradually ensure that they receive the same treatment as urban residents in areas such as pay, children's education, healthcare, housing and social security," he said.
But Mr Wen did not outline what policies would be introduced to achieve that aim, and when they would come into force.
And, importantly, he said reforms would only be carried out in towns and smaller cities, suggesting the system would remain in place in big urban centres such as Beijing and Shanghai.
Mr Wen also addressed what he called a "complex situation" facing the economy, which he said should expand by 8% this year.
Fuelled by innovation
Last year China was desperate to keep the economy growing following a global downturn that left many Chinese people without jobs.
But now, having weathered the worst of that crisis, Premier Wen said China needed to concentrate on restructuring the economy.
"This is a crucial year for…accelerating the transformation of the pattern of economic development," he said.
He wants future growth to be fuelled by innovation.
China should also expand consumer demand by getting people to spend on such things as tourism, fitness and other services.
Delegates to the Chinese parliament are selected, not elected, but in his speech Premier Wen indicated that he does listen to those outside the government.
Many people across China are currently concerned about rising house prices that mean many cannot afford a home.Mr Wen said China would do something about it.
In the keynote speech, Mr Wen reviewed the government's work over the past 12 months and set out its policy goals for the coming year.
Registration reform
The speech touched on many issues, but on a number of occasions the premier spoke about the need to make China a fairer society.
"We will not only make the 'pie' of social wealth bigger by developing the economy, but also distribute it well," Mr Wen told about 3,000 delegates, returning to a theme that he has often spoken about during his premiership.
"[We will] resolutely reverse the widening income gap," he added later, in a speech that lasted more than two hours.
As part of that project, the premier said China would reform the household registration system that classifies people as either city or rural dwellers.
This controversial system means many migrant workers - farmers who travel to towns and cities to find better-paid work - are unable to get proper services.
"[We will] gradually ensure that they receive the same treatment as urban residents in areas such as pay, children's education, healthcare, housing and social security," he said.
But Mr Wen did not outline what policies would be introduced to achieve that aim, and when they would come into force.
And, importantly, he said reforms would only be carried out in towns and smaller cities, suggesting the system would remain in place in big urban centres such as Beijing and Shanghai.
Mr Wen also addressed what he called a "complex situation" facing the economy, which he said should expand by 8% this year.
Fuelled by innovation
Last year China was desperate to keep the economy growing following a global downturn that left many Chinese people without jobs.
But now, having weathered the worst of that crisis, Premier Wen said China needed to concentrate on restructuring the economy.
"This is a crucial year for…accelerating the transformation of the pattern of economic development," he said.
He wants future growth to be fuelled by innovation.
China should also expand consumer demand by getting people to spend on such things as tourism, fitness and other services.
Delegates to the Chinese parliament are selected, not elected, but in his speech Premier Wen indicated that he does listen to those outside the government.
Many people across China are currently concerned about rising house prices that mean many cannot afford a home.Mr Wen said China would do something about it.
"China would do something about it" In what way? Soviet style planning? Quantitative easing? The problem is that Chinese figures are notoriously unreliable: There will be much more hardship soon with a looming Chinese collapse bigger than the Soviet Union's.
ReplyDeleteChina is unlikely to collapse so soon if ever. But they might not succeed in narrowing the income gap so readily as the central will often faced great problems due to often conflicting self-interests with the local provincial government. Corruption issues still need to be tackled.
ReplyDeleteThe biggest problem might be from some of the autonomous regions as issues due to race and sovereignty have not been solved. In my opinion i think that increased education facilitated by green energy growth are part of the key to the achievement. In some of these regions access to affordable electricity and clean water are issues that can be solved by government encouragement of correct wind and solar energy enterprises. Conservation such as forestation have also tremendous potential for former rural people as the carbon credit earned can be quite profitable if the profit are earned directly by the farmers themselves
I do agree with Jamesneo that "China is unlikely to collapse so soon if ever" and narrowing the income gap and inequality is a greater concern.
ReplyDeleteIf China is a totally "free" market, a collapse is possible. But if "Chinese figures are notoriously unreliable" as CrisisMaven said, the Poliburo are using the same set of figures to manage their own economy. It is outsiders whom have to be wary.
So what Premier Wen said is more probable :- "We must not interpret the economic turnaround as a fundamental improvement in the economic situation. There are insufficient internal drivers of economic growth."
So increased social spending and expenditure on rural programmes is both an internal driver to boost growth and a tool for income distrbution to narrow income gap. The formal is upped by 8.8% and the latter by 12.8%. Low income housing funding will also be boosted by 14.8%.
But the "Hukou" system is an obstacle and must be reformed. But unlike what many outsiders think, China has its own "organic" unique way to overcome this problem at the bottomline despite being a communist country...handling the pie of social wealth by making it bigger through developing the economy and distributing income would probably deliver what he has in mind.
Premier Wen also pledged to keep currency basically steady despite external pressure...probably no action would be taken soon to raise the value of its currency. Inflation would probably be checked.
After having shown its militray might on the 60th N-Day, military spending would be raised by only 7.5 % as compared against relative higher spending on social and rural programmes.
China are still in the corruption state more or less...., when talk about China income gap sure is a big gap will not be narrow over night....part of the problem that come from coping Singapore's policy on “高薪养廉”over to become their “高薪养贼”..China govt. is following Singapore way of managing the civil servant salary....
ReplyDeletehttp://news.163.com/10/0105/17/5S9H4BGL00012Q9L.html
If
ReplyDelete"China govt. is following Singapore way of managing the civil servant salary...."
then
their inequalities would only get worse since Singapore has the 2nd highest income gap in the developed world and is getting worse!