China targets 7% growth in 2004; pledges stable yuan (chinadaily.com.cn/agencies) Updated: 2004-03-05 16:07
Chinese Premier Wen Jiabao said his government is targeting an economic growth
of seven percent this year but urged a more equitable distribution of wealth and
better controls on haphazard and redundant investment.
Speaking before
some 3,000 delegates to the annual session of the National People's Congress,
Wen also pledged Friday to keep the Chinese yuan "basically stable".
"In
setting strategy for this year's economic growth, of around seven percent, the
central government has taken into consideration both the need for continuity in
marco-control and the relationship between the pace of economic growth and
supply and demand," Wen said.
China grew at a blistering 9.1 percent in
2003 for its best performance since 1997 amid alarm bells that the economy was
overheating.
Still, Wen's forecast was widely believed to be a
conservative estimate as China needs a minimum of seven percent growth in order
to create more jobs for a growing army of unemployed and redundant workers.
Since the 1997 Asian financial crisis, the government has maintained an annual
growth target of "around seven percent."
To this end, China will
continue its expansive fiscal policy but channel more expenditures and
investment into the rural sector, Wen said.
"We must adhere to the
policy of expanding domestic demand and continue to implement a pro-active
fiscal policy and a prudent monetary policy," Wen said.
"We will work
to basically balance international payments and keep the exchange rate for
the renminbi (yuan) basically stable at a proper and balanced level."
***Taming Economy
In an effort to rein in fixed asset investment, Wen further announced
that funding in the form of special construction treasury bonds will be reduced
from last year's 140 billion yuan ($US16.9 billion) to 110 billion yuan this
year.
"One important task for macro-control this year is to
appropriately control the scale of investment in fixed assets and firmly halt
haphazard investment and low-level, redundant construction in some industries
and regions," he said.
Wen also said that "long-standing and deep seated
problems" in the economy that "our people are not satisfied with" would take a
long time to eradicate.
"Rural incomes have grown too slowly, the task
of increasing employment and improving social security is arduous, development
in different regions of the country is not balanced, the income gap is too wide
among some members of society and pressure on resources and the environment is
mounting."
Wen pledged to make the economy in the rural areas the
"top priority of all our work," while "the funds from treasury bonds will be
directed toward rural areas, social undertakings (and) western regions."
This year the government will severely restrict land requisition in rural
areas, reduce the financial burden on farms by 4.8 billion yuan and increase
investment in rural areas by 20 percent, he added.
***Developing
Non-State Sector
Meanwhile, the government will continue to
deepen ongoing restructuring in the banking, finance and state enterprise
sections, including improvements to the state assets management system, Wen
said.
"We need to accelerate the reform of the wholly state-owned
commercial banks, focusing on the pilot project to transform the Bank of China
and the China Construction Bank into stock enterprises," Wen said.
He also called on governments at all levels to eliminate or revise
regulations that restrict the development of the non-State sector.
"We
will take measures to ensure that non-public enterprises receive the same
treatment as other enterprises in investment, financing, taxation, land use and
foreign trade," Wen said. "We will protect their legitimate rights and
interests and improve government service to and oversight over
them."
**Getting Rid of Agriculture Tax
Looking
to boost farmers' incomes, China plans to get rid of the agriculture tax in five
years, said Wen Jiabao in his government work report. The premier announced that
the government will press ahead with the reform of rural taxes and
administrative charges.
Wen said beginning this year, the agricultural
tax rate will be reduced by more than one percentage point per year on average,
and agricultural taxes will be rescinded in five years. All taxes on special
agricultural products will be repealed except for tobacco, thus reducing the
financial burden on farmers by 4.8 billion yuan annually, he added. This year,
the agricultural tax burden on farmers will be reduced by 7 billion
yuan.
He called for consolidating and strengthening the position of
agriculture as the foundation of the national economy and increasing rural
incomes and agricultural production.
"Once again, China's agriculture is
in a crucial period of its development," Wen stressed. This year China must take
more direct and effective policies and measures to strengthen, support and
protect agriculture and increase rural incomes in line with the need to balance
urban and rural development.
"Solving problems facing agriculture, rural
areas and farmers is a top priority in all government work this year", he said.
The state will appropriate 10 billion yuan this year from its grain risk
fund to directly subsidize these producers in order to stimulate their
enthusiasm for grain production. The prices of the means of agricultural
production will be better monitored and controlled to protect farmers'
interests.
**Never allow anyone to split Taiwan
"We stand firmly opposed to any form of separatist activities aimed at
'Taiwan independence' and will never allow anyone to split Taiwan from China by
any means," Premier Wen Jiabao said.
"With the utmost sincerity, we will
do everything possible to bring about the peaceful reunification of the
motherland," Wen said.
The Chinese mainland will adhere to the basic
principle of "peaceful reunification and one country, two systems" and, during
this current stage, to the eight-point proposal for developing relations across
the Taiwan Straits and promoting the peaceful reunification of the motherland,
the report notes.
"We will vigorously expand visits of individuals
across the Straits and economic and cultural exchanges and energetically promote
establishment of the 'three direct links' between the two sides."
The
Chinese mainland will protect the legitimate rights and interests of the Taiwan
compatriots on the mainland in accordance with the law and continue to pursue
the resumption of dialogue and negotiations between the two sides on the basis
of the one-China principle, it says.
The report reiterates the
"unshakable goal" to maintain the long-term stability and prosperity of Hong
Kong and Macao and the "full support" to the chief executives and governments of
the two regions.
The Chinese mainland will act in strict accordance with
the basic laws of the Hong Kong and Macao special administrative regions, the
report says.
"We will unite as broadly as possible people from all walks
of life in Hong Kong and Macao and effectively implement the Closer Economic
Partnership Arrangement between the mainland and Hong Kong and the mainland and
Macao."
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