China's parliament approves economic policy, budget (Roundup)

Mar 14, 2010, 6:08 GMT

Beijing - China's nominal parliament on Sunday endorsed policies designed to bolster the economy against the global recession and approved an annual budget that included a 7.5-per-cent hike in military spending.

Reports on the budget and economic performance were approved by a large majority of the nearly 3,000 members of the National People's Congress, who took part in rapid electronic voting at the end of the parliament's nine-day annual session.

The economic report was approved by 97.5 per cent of the 2,909 delegates present, while 84.5 per cent of them endorsed the budget report.

A relatively low 78.7 per cent of the delegates approved a legal report by the Supreme People's Court. Nearly 500 delegates voted against accepting the court's report, in a traditional reflection of concerns over judicial corruption.

Speaking to reporters at the end of the congress, Premier Wen Jiabao said China aimed to strike a balance this year between 'maintaining a relatively fast and stable development, economic structural adjustment, and management of inflation.'

'We must maintain the continuity and stability of macroeconomic policy, which means we will continue implementing proactive fiscal policy and moderately loose monetary policy to consolidate the trend of economic recovery,' Wen said.

The government's priority would be to resolve 'imbalances, incoherence and unsustainability' in China's economy, including a potential asset bubble, growing income gaps, and corruption.

He said the government would be 'very cautious and flexible' in moving out of a two-year, 4-trillion-yuan (580 billion dollars) economic stimulus programme.

In his economic report, Wen said the government would encourage job creation, support the growth of service industries, expand consumer demand, fight corruption and improve government accountability, he said.

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.

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.