China to Stress Social Well-being over Growth

By Charles Hutzler 5 March 2013

BEIJING — China’s government promised its people on Tuesday deficit-fueled spending to fight corruption, improve the despoiled environment and address other quality-of-life issues that a growing number of Chinese are demanding.

In a speech outlining government plans at the opening of the annual National People’s Congress, outgoing Premier Wen Jiabao signaled that leaders would no longer emphasize growth at all costs and would down-shift development to put priority on social programs.

“We must make ensuring and improving people’s well-being the starting point and goal of all the government’s work, give entire priority to it, and strive to strengthen social development,” said Wen, who will step down at the end of the legislative session.

The session will complete China’s once-a-decade leadership transition that began with a Communist Party congress in November that appointed Xi Jinping as party leader and as the country’s new chief along with a new cohort of leaders in the Politburo. Xi will formally be named president, replacing outgoing Hu Jintao, before the end of the 13-day session.

Wen’s address, though given by the outgoing premier, and the accompanying budget presented by the government Tuesday are consensus documents approved by the new leadership and reflect Xi’s priorities.

Overall government spending will increase 10 percent to 13.8 trillion yuan (US $2.2 trillion) helped by a 50 percent increase in the coming year’s fiscal deficit. Defense spending will increase 10.7 percent to 720 billion yuan ($114 billion)—a slight slowdown from last year’s increase of 11.2 percent.

There was special emphasis on reducing energy consumption, improving conservation and solving the country’s serious air, soil and water pollution.

“In response to people’s expectations of having a good living environment, we should greatly strengthen ecological improvement and environmental protection,” Wen said. “The state of the ecological environment affects the level of the people’s well-being and also posterity and the future of our nation.”

Hundreds of soldiers, police and plainclothes security officer—equipped with fire extinguishers and anti-explosive blankets—ringed the Great Hall of the People and the adjacent Tiananmen Square for the opening session.

The legislature, most of whose nearly 3,000 deputies are Communist Party members, will approve appointments to top government posts, as well as a proposed streamlining of government ministries. In reality, the decisions have already been made by Xi and party power-brokers behind closed doors.

Beyond the politics, the party faces a legitimacy crisis among the public. Many Chinese see business, society and politics as dominated by a party-connected elite and wonder if Xi, as the son of a revolutionary veteran, has the political will to take on entrenched interests.

The disaffected include the middle class, which has risen out of the successful market reforms for the past decades and has tended to support the party, but also has grown weary of what is seen as an increasingly corrupt establishment.

Wen underlined the commitment to fight corruption that party leaders have stressed is vital to their legitimacy and survival.

“We should unwaveringly combat corruption, strengthen political integrity, establish institutions to end the excessive concentration of power and lack of checks on power and ensure that officials are honest, government is clean and political affairs are handled with integrity,” Wen said.

Leaders targeted a 7.5 percent economic growth rate for the coming year, which is the same as last year and lower than the 8 percent rate that dominated planning for decades. However, the figure is largely symbolic because in reality growth has typically been higher. Last year’s growth was 7.8 percent and this year’s is expected to be even higher.

The substantial military spending shows that Xi wants robust backing for the People’s Liberation Army at a time when China has tense territorial disputes with neighbors and wants to reduce US influence in the region. However, the slight decrease in growth for the army’s budget indicates that Xi feels he already has strong military support without the need to pander to its recent demands for ever-larger outlays.

Chinese defense spending has grown substantially each year for more than two decades, and last year rose 11.2 percent to 670.2 billion yuan ($106.4 billion), an increase of about 67 billion yuan. Only the United States spends more on defense. Its military budget last year was estimated from $1 trillion to $1.4 trillion.

Associated Press writers Gillian Wong, Christopher Bodeen and Didi Tang contributed to this report.