Chinese premier charts change of economic focus (Roundup)

Mar 5, 2010, 10:36 GMT

Beijing - Premier Wen Jiabao called for an 'urgent' change in China's economic focus as he delivered a state-of-the-nation economic report Friday at the opening of the annual National People's Congress.

Wen reported the government's economic performance in 2009 and outlined key economic policies for this year to the Congress, which is the nominal state parliament of the ruling Communist Party.

'We urgently need to transform the pattern of economic development,' he told 3,000 delegates who heard the opening speeches of the 10-day event.

Wen said the government would 'promote the steady development of agriculture and a continuous increase in incomes.'

It would encourage job creation, support the growth of service industries, expand consumer demand, fight corruption and improve government accountability, he said.

'We will strive to conserve energy and reduce emissions,' Wen said, adding that the government 'will work hard to develop low-carbon technologies' and renewable energy.

He announced a record budget deficit of 1.05 trillion yuan (154 billion dollars) for 2010 with planned central and local government spending of 8.453 trillion yuan, up 11.4 per cent from last year.

'This is a crucial year for continuing to deal with the global financial crisis, maintaining steady and rapid economic development, and accelerating the transformation of the pattern of economic development,' Wen said.

'Although this year's development environment may be better than last year's, we still face a very complex situation,' he said.

China said its economy showed signs of recovery from the global slowdown last year. Despite a 16-per-cent fall in export values in 2009, its gross domestic product (GDP) grew by 8.7 per cent, stimulated by a 4- trillion-yuan infrastructure-centred spending package.

Wen said the government would target GDP growth of about 8 per cent this year.

He warned of several pressing risks, including fears of a growing bubble in the property market.

The government aimed to 'resolutely curb the precipitous rise of housing prices in some cities and satisfy people's basic need for housing' and curb illegal land use and price rigging, he said.

Earlier this year, the party's 'Number 1 Document,' an annual statement of key economic and social policies, promised more support for agriculture and improved social security for rural areas.

Wen said the central government had earmarked 133.5 billion yuan for direct subsidies to farmers this year.

Another 43.3 billion yuan would be used to promote the creation of jobs, focussing on college graduates, rural migrants and demobilized military personnel, he said.

Congress spokesman Li Zhaoxing said Thursday that China planned to increase its military budget for this year by 7.5 per cent following much larger defence hikes in recent years.

About 2,250 members of an advisory body, hundreds of journalists and observers, and a military brass band also attended the opening of the Congress, which was expected to approve the party's reports by large majorities in a quick-fire voting session at the end of its 10-day meeting.

The Congress has never rejected a bill proposed by the party since its first sitting in September 1954.