Page 2 of
2 A healthier - and better armed -
China By Wu Zhong, China Editor
People's Political Consultative
Conference (CPPCC), the country's top political
advisory body, which is holding its annual session
concurrently with the NPC.
CPPCC member
Chu Yaping, deputy director of the supervision
bureau in central Henan province, said officials
should be held accountable if they fail to
guarantee sufficient affordable housing for local
residents, according to Xinhua.
Meanwhile,
China also plans to increase its military spending for
this
year to 350.9 billion yuan, an increase of nearly
53 billion yuan or 17.8% from last year, Jiang
Enzhu, deputy secretary general and spokesman for
the NPC, announced on Sunday.
But he
rejected concerns recently expressed by the United
States and other countries about China's military
expansion, saying the spending is increased mainly
to improve salaries and living conditions for
military personnel and to upgrade equipment and
technology.
"China's national defense is
to protect the country's security and
reunification and to ensure steady progress toward
building the country into a moderately prosperous
society. China has neither the wherewithal nor the
intention to enter into an arms race with any
country and China does not and will not pose a
threat to any country," Jiang told a press
conference one day before the opening of the NPC's
annual session.
Although China has not
fought a military conflict since the 1980s,
Beijing has increased defense spending by more
than 10% annually in recent years. Beijing argues
its military expenditure is small compared with
that of developed nations such as the US and
Japan.
China successfully destroyed one of
its own weather satellites with a ground-based
missile in January, which provoked worries about
its military capabilities and intentions. The US
is also worried about growing tensions on the
Taiwan Strait as Taiwanese President Chen
Shui-bian has been taking more aggressive moves
toward independence, sparking accusations from
Beijing.
Analysts say that the central
government of China has reaped huge
extra-budgetary revenues in recent years, enabling
it sharply to increase its expenditure this year.
Minister of Finance Jin Renqing earlier estimated
that extra-budgetary income in 2006 could exceed
300 billion yuan.
In addition to increased
spending on education, medical care and national
defense, Wen said in his report that the
government would take 50 billion yuan out of last
year's extra-budgetary revenue to set up a central
budget stabilizing fund that will be put under the
supervision of the NPC. This confirms a report by
Asia Times Online on February 24 (Cash-rich Beijing to set up rainy
day fund) that China would allocate
money from extra-budgetary revenues to set up a
special fund to help balance the budget in poor
fiscal years.
China plans to gear down its
economic growth to 8% this year, a level lower
than the staggering 10.7% GDP expansion in 2006,
Wen said, pledging to enhance and improve
macroeconomic controls.
"The most
important task for us is to promote sound and fast
economic growth ... We need to greatly improve the
quality and efficiency of economic growth," Wen
said.
China's economy has soared to be the
fourth-largest in the world. However, the
country's economic miracle is dogged by worries
concerning energy use and environment, as China
failed to achieve both goals of energy consumption
reduction and pollution control set at the
parliament's annual session last year.
This year's GDP growth target was set
after taking into consideration all factors, along
with goals of employment and increase in consumer
prices among others, according to Wen's report.
However, analysts say whether China can
slow down its growth largely depends on whether
Beijing can rein in regional officials. Last year,
Wen also set the target at 8% but in the end the
real growth hit 10.7%.
On other issues,
Wen said China will improve the mechanism for
setting the yuan exchange rate and seek ways to
spend the massive state foreign-exchange reserves
appropriately.
The yuan's value has risen
by more than 6% since July 21, 2005, when the
government launched reform of the exchange-rate
system to allow the yuan to float against the US
dollar within a daily band of 0.3% around the
official central parity rate. The central parity
of the yuan was 7.7403 to $1 on Monday, compared
with 8.28 yuan before the reform.
"We will
improve the mechanism for setting the yuan
exchange rate, strengthen and improve
foreign-exchange administration, and actively
explore and develop channels and means for
appropriately using state foreign-exchange
reserves," Wen said.
Wen also pledged that
China will strive to reduce its "excessively
large" trade surplus to ensure the sustained
development of both the domestic economy and
foreign trade.
Despite being 1.2
percentage points down in export growth and 2.4
points up in import growth, China's trade surplus
last year expanded to a record $177.5 billion, up
74% from the previous record of $101.9 billion set
in 2005.
The surplus kept surging 67.3% in
January from a year ago to $15.88 billion, a
dangerous level to ignite inflation and
aggravating already tense trading relations
between the world's fourth-largest economy and its
major trade partners, which are pressing China for
further currency appreciation.
To reduce
the hefty trade imbalance, the premier said the
government will support the export of
high-value-added products and products with
Chinese trademarks, promote the development of the
processing trade and expand the export of service
and agricultural products, while limiting exports
of products that take a lot of energy to produce
or cause excessive pollution.
For the part
of imports, Wen stressed that imports of energy,
raw materials, advanced technologies and
equipment, and key spare parts and accessories
will be bolstered.
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