China unveils five-year development blueprint as parliament starts annual session

by Xinhua writers Meng Na, Tian Ye

BEIJING, March 5 (Xinhua) -- China opened its annual parliamentary session on Saturday, unveiling a five-year development blueprint and striving to handle pressing economic issues including inflation.

Nearly 3,000 National People's Congress (NPC) deputies from across the country, and more than 2,000 members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the top political advisory body, were present in the Great Hall of the People at the opening meeting of the Fourth Session of the 11th NPC.

Top Communist Party of China (CPC) and state leaders Hu Jintao, Wu Bangguo, Jia Qinglin, Li Changchun, Xi Jinping, Li Keqiang, He Guoqiang and Zhou Yongkang were present at the meeting.

The world is watching how China copes with the current complex situation and seizes the strategic opportunity for its development in 2011, the start of its 12th Five-Year Plan and the 90th anniversary of the founding of the CPC.

At the parliamentary meeting, Premier Wen Jiabao delivered a report on government work, noting that China "still faces an extremely complex situation for development" this year.

He said some long-term and short-term problems in China's economic activities are intertwined, and institutional incongruities and structural problems are stacked up together, making the country's macro-control more difficult.

China has overtaken Japan as the world's second largest economy. Prior to the parliamentary session, some media doubt whether China can sustain its economic growth as they believe China has difficulties of increasing export, boosting domestic demand, and improving efficiency of spending.

Moreover, they think social conflicts in some localities will be another factor hindering the country's economic development.


In his report, Wen said China will increase its gross domestic product (GDP) by around eight percent this year, further optimize the economic structure, keep the consumer price index (CPI) increase around four percent, create more than nine million jobs in urban areas and keep the registered urban unemployment rate at 4.6 percent or lower.

China needs to maintain continuity and stability in its macroeconomic policies and make them more targeted, flexible and effective, said the premier.

"We need to correctly strike a balance between maintaining steady yet rapid economic development, restructuring the economy and managing inflation expectations, pay more attention to maintaining overall price stability, and prevent large economic fluctuations," he said.

To check price hikes, China will make stabilizing price levels a "top priority" in its macroeconomic control this year, according to Wen.

Sheng Yafei, an NPC deputy and Communist Party chief of the Songjiang district of Shanghai, said he had confidence in the central government in controlling commodity prices this year despite all the difficulties.

"There are favorable conditions for the country to control commodity prices: we have had gains in grain output for seven consecutive years, abundant supply of industrial products, and huge foreign exchange reserve," he said.

Wen also vowed to steadfastly follow a strategy of expanding domestic demand and adopt policies and measures to encourage consumer spending.

Other objectives for China in 2011 include strengthening agricultural foundation, promoting economic restructuring, implementing the strategy of reinvigorating the country through science and education as well as implementing the strategy of strengthening the country through human resources development.

China will also strengthen social development, ensure and improve the well-being of the people, enhance cultural development, deepen reforms in key areas, improve the work of opening to the outside world, promote clean government, and combat corruption, Wen said.

NPC deputies and experts believe the objectives and measures mentioned in the government work report, if adopted and implemented, will lay a good foundation for the targets set in China's 12th Five-Year Plan.


According to Wen, three major measures will be taken in 2011 to bridge yawning income gap: increasing the basic incomes of low-income people in both urban and rural areas, putting more effort into adjusting income distribution, and vigorously overhauling and standardizing income distribution.

The premier also outlined targets to regulate the real estate market, which were hailed by NPC deputies and CPPCC National Committee members as an effective response to public concern.

Zhuang Jian, a senior economist with the Asian Development Bank, said China faces heavy tasks of improving people's well-being.

The goal of economic development is not about building skyscrapers or scoring higher grades in GDP, it is about improving people's lives, he said.

To spur development in sectors concerning people's well-being will help China pursue a sustainable economic growth model, he added.

When asked to comment China's measures to readjust income distribution, Zhuang said narrowing income gap will stimulate the consumption of China's huge population in middle- and low-income households and will be conducive to the expansion of domestic demand.

Moreover, it is a decisive factor of maintaining social harmony and stability, he said.

However, Sheng Yafei warned that authorities must be more careful in formulating plans to achieve these targets.

"When it comes to the implementation of relevant policies on real estate, I think the authorities should be more considerate and implement more detailed plans," he said.


"The 12th Five-Year Plan period is crucial for building a moderately prosperous society in all respects and for deepening reform and opening up and speeding up the transformation of the pattern of economic development," Wen said.

China has set a target of seven percent of annual economic growth over the coming five years with significant improvement in the quality and performance of economic development.

"To lower the economic growth rate, China has sought to restructure and upgrade its economy," said Chang Dechuan, an NPC deputy and president of the Qingdao Port Group Co., Ltd.

"It has showed China's increasing concern of the quality of its economic growth, instead of the economic growth index," he said.

"To lower the expectations for economic growth would allow for a better environment for the country's economic restructuring and upgrading. To enterprises, it means they should no longer recklessly pursue expansion, but seek a more energy-saving and environment-friendly path of development."

Some foreign media believe the shift from an economy based on exports and public works projects to one powered by consumer spending will be a crucial part of the effort to rebalance global trade.

In the 12th Five-Year Plan period, China will accelerate the development of the service sector and raise its value-added contribution to GDP by four percentage points, increase its level of urbanization from 47.5 percent to 51.5 percent.

In the meantime, China will increase spending on research and development to 2.2 percent of its GDP, reduce energy consumption and CO2 emissions per unit of GDP by 16 percent and 17 percent respectively, and cut the release of major pollutants by eight percent to ten percent.

In the 2011-2015 period, China plans to create 45 million urban jobs, and raise the per capita disposable income of urban residents and the per capita net income of rural residents by an annual average of over seven percent.

The country will raise the proportion of expenses for medical treatment paid out of the medical insurance fund above 70 percent, and low-income housing will be made available to around 20 percent of the country's urban households.

These targets, if fulfilled, will turn China from the world's factory to the world's market, analysts say.

To Wu Cuiyun, an NPC deputy and Communist Party chief of Dezhou City of Shandong Province, these figures signal China's pursuit of scientific development model featuring "a comprehensive, coordinated and sustainable growth path and balanced improvement in both economy and people's welfare."

"China's development has reached a critical juncture... Much will depend on whether China will successfully make the change from an export-oriented economy to one that is driven by domestic consumption," Gustaaf Geeraerts, professor and director at Brussels Institute of Contemporary China Studies (BICCS), said in an interview with Xinhua.

The transformation of China's economic growth pattern will exert global impacts as China places less reliance on export, said Chen Kang, professor with the Lee Kuan Yew School of Public Policy under the National University of Singapore.

"China's economy has increasing impact on the world's economy so that everything that happens in China is increasingly meaningful to all other countries," said Robert Lawrence Kuhn, a renowned expert on China from the United States and author of "How China's Leaders Think."

By transforming its economic development pattern, China will become more balanced and thus more stable. "A stable China is essential for world stability, even if this requires slightly slower growth in China," he said.


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