China Vows Countryside Help
Wen Aims to Lift Up
Rural Areas And Tap
Them for New Growth
BEIJING -- Chinese Premier Wen Jiabao promised free education for every rural child and the abolition of an agricultural tax as he laid out a populist agenda that acknowledges the anger building among millions left behind after decades of go-for-broke growth.
In his speech at the opening of the national legislature's annual meeting yesterday, Mr. Wen focused heavily on improving the lives of the rural poor, but also on low-paid migrant workers in the cities, the unemployed and coal miners working in hazardous pits.
Mr. Wen and President Hu Jintao have set themselves up as champions of the downtrodden with a program to create a "harmonious society" that balances growth with social fairness and environmental concerns. His speech to the National People's Congress packaged a series of initiatives aimed at narrowing the huge gap between rich and poor. The measures, most of them already announced or under way, represent a significant shift in Beijing's priorities toward the countryside, where incomes are less than one-third of those in the booming cities.
Mr. Wen's speech underlined the government's growing concern about spreading unrest in rural areas. Unrest is often touched off by officials seizing farmland and selling it at huge profit to commercial developers.
At the same time, Beijing wants to tap the backward countryside for new sources of growth. By putting more money into the pockets of China's 800 million rural residents, authorities hope to boost domestic consumption and help wean the country off investment and exports to fuel economic expansion.
Mr. Wen made clear that China isn't abandoning fast-paced growth or slowing an overhaul of state industry. As many as 30 million workers have lost their jobs in the past decade as authorities closed tens of thousands of unprofitable factories.
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He announced an official target of 8% economic growth this year, which like previous targets is likely to be surpassed easily, economists said. Growth last year was 9.9%, and momentum is strong so far this year. Fiscal spending would contract only slightly in 2006, Mr. Wen said. The budget deficit is projected to reach 295 billion yuan ($36.7 billion), five billion yuan less than in 2005. Among this year's expenditures is a 15% boost in military spending, to $35.1 billion -- the biggest rise in four years.
Mr. Wen indicated that Beijing is increasingly concerned about the quality of growth. He admitted that it had failed to adequately control investment in fixed assets like factories and machinery. Overinvestment is among the biggest threats to the economy as it leads to production gluts and can wipe out corporate profits, causing bankruptcies and a jump in bad loans.
"The problem of excess production is getting worse," Mr. Wen told nearly 3,000 delegates at the Great Hall of the People. "Corporate profits are down and losses are increasing, causing greater potential financial risks."
Mr. Wen said China would invest more in high-technology industries that consume less energy and produce less pollution.
On the issue of the Chinese currency's exchange rate, a growing irritant in Sino-U.S. ties, Mr. Wen said little to cheer Washington. He reiterated Beijing's policy to keep the yuan "basically stable." The U.S. Treasury has indicated it might be ready to label Beijing a currency manipulator in a semiannual review due next month, the same month Mr. Hu is scheduled to visit Washington. U.S. critics say China deliberately undervalues its currency to make its exports cheaper in dollar terms, contributing to the U.S.'s surging trade deficit with China.
But the focus of Mr. Wen's speech was on improving conditions in the countryside. China has already begun offering nine years of free compulsory education to children in its poorest western provinces, and Mr. Wen called a decision to expand the program to the whole country by the end of next year an "important milestone."
Mr. Wen said Beijing would boost grain subsidies to farmers, spend 20 billion yuan during the next five years to improve the rural hospital network and double the government's annual contribution to individual health-insurance plans in the countryside to 40 yuan. He hailed a decision to end an agricultural tax this year -- one that he said had been collected for 2,600 years -- as a "change of epoch-making significance."
The commitment to fund additional spending on rural health and education from central coffers could have far-reaching consequences. Until now, Beijing has increasingly pushed the burden of social welfare onto cash-strapped local governments, which have responded by raising ad hoc fees they charge farmers.
Hong Liang, a Hong Kong-based economist with Goldman Sachs, said reducing the spending and revenue-raising powers of local governments would curb abuses of power that fuel rural unrest. But Beijing's focus on rural areas wouldn't necessarily result in a slowdown along the booming coast, she said, as investment there is largely funded by local governments, and central-government infrastructure spending has long been skewed toward the interior.
Ms. Liang said it was "much more worrisome" that Mr. Wen made scant reference to private enterprise in his speech, and emphasized government spending and subsidies over market-based solutions to tackle the country's welfare and agricultural problems.
中国人代会关注农业问题
中国总理温家宝表示，要为所有农村儿童提供免费义务教育，废除农业税。他还在政府工作报告中坦承，在经过了几十年的飞速发展后，贫富差距的扩大令数百万贫困人口的不满情绪日益加大。
温家宝在周日开幕的全国人大会议上发表讲话，重点强调了改善农村贫困人口，以及在城市打工的外地民工、下岗失业人员和煤矿工人的生活水平。
温家宝和国家主席胡锦涛提出了构建“和谐社会”的理念，平衡经济发展和社会公平以及环保问题。温家宝在全国人大会议上的讲话提出了一系列缩小贫富差距的措施，其中的许多措施都已经宣布或实施。此举显示出中国政府开始将工作重点向收入不到城市三分之一的农村转移。
温家宝的讲话凸显出政府对农村地区动乱的不断蔓延越来越感到担忧。动乱一般都是由当地官员征地卖给开发商牟取暴利而引发的。
与此同时，中国政府把农村视为新的经济增长动力。通过8亿农民收入的增加，政府希望拉动国内消费，使中国降低对依靠投资和出口推动经济增长的依赖。
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? 中国2006年军费开支将增加15%温家宝明确表示，中国不会放弃经济的快速增长，或减缓国有企业的改革步伐。在过去10年里，由于国家关闭了数万家亏损企业，导致约3,000万工人失去了工作。
他宣布，今年的经济增长目标为8%。经济学家表示，同往年一样，这个目标很可能被轻松超过。2005年的经济增长率为9.9%，今年以来依然保持强劲的势头。温家宝说，2006年的财政支出仅会略有下降。预计预算赤字将达到人民币2,950亿元（367亿美元），比2005年减少500亿元。今年的国防开支比上年增长15%，为351亿美元，是四年里的最大增幅。
温家宝表示，中国政府越来越关注增长的质量。他承认，在适当控制工厂和机械制造等固定资产投资方面存在不足。过度投资是对经济的最大威胁，它会带来生产过剩，消耗企业利润，引发破产，并导致不良贷款增加。
他说，产能过剩的问题日趋突出。企业利润减少，亏损增加，潜在的金融风险加大。
温家宝表示，中国将增加对能耗低、污染少的高科技产业的投资。
对于不断引发中美摩擦的人民币汇率问题，温家宝的讲话并没有给美国方面带来什么好消息。他重申了中国政府维持人民币汇率“基本稳定”的政策。美国财政部(U.S. Treasury)已表示，可能会在4月份发布的半年度报告中将中国列为汇率操纵国，而胡锦涛也定于当月访问美国。美国的批评人士称，中国故意压低人民币兑美元汇率，推动出口，这导致了美中两国间巨大的贸易逆差。
但温家宝报告中的重点是改善农村的状况。中国已经开始向最贫穷的西部省份提供免费九年制义务教育。温家宝称，将这一计划在明年年底前扩大到全国的决定是一个重要的里程碑。
温家宝说，中国将提高对农民的粮食补贴，在五年内国家财政将投入200多亿元，对乡镇卫生院和部分县医院房屋和设备进行改造，中央和地方财政对参加合作医疗农民的补助标准由20元提高到40元。他还说，今年在全国彻底取消农业税，标志著实行了长达2600年的这个古老税种从此退出历史舞台，是具有划时代意义的重大变革。
从中央财政为农村医疗和教育提供额外资金的承诺具有深远的意义。迄今为止，中国政府不断将社会福利的负担推向现金捉襟见肘的当地政府，使他们不断提高向农民征收的各项税费。
高盛(Goldman Sachs)驻香港经济学家梁红说，降低当地政府支出和增收的权力会遏制导致农村地区动荡的滥用权力现象。但她说，政府关注农村地区不见得会导致沿海地区经济发展的减速，因为那里的投资主要是由当地政府提供的，中央政府的基础设施支出长期以来主要是向内地倾斜。
梁红称，温家宝在报告中很少提及民营企业，以及过于强调用政府支出和补贴，而不是市场化方案解决中国的福利和能源问题令人深感忧虑。
