China's Prime Minister Wen Jiabao said Friday his country was seeking an 8% annual growth in gross domestic product (GDP), an inflation rate of about 3% and a basically stable Yuan currency for 2010, the year in which China is set to overtake Japan to become the world's second-largest economy.
In his annual "state of the Union" address to the opening session of the National People's Congress (NPC), China's top legislature, he also said that Beijing would maintain an appropriately flexible monetary stance and an active fiscal policy.
Expressing satisfaction over the country escaping, relatively unscathed, from the global financial crisis, Wen warned the nearly 3,000 delegates against complacency, and vowed to reverse the widening income gap between the rich and the poor as the country continued its economic advance.
"We must not interpret the economic turnaround as a fundamental improvement in the economic situation," he said, adding: "There is insufficient internal impetus driving economic growth."
Asserting that China needed to concentrate on restructuring the economy, Wen said: "This is a crucial year for.accelerating the transformation of the pattern of economic development."
After property prices peaked in 21 months in January, he set a target of 7.5 trillion yuan (?750 billion USD 1128 billion) for lending.
However, the premier did not announce any roll-back in the massive 4.0 trillion yuan (?400 billion USD 602 billion) stimulus package that spurred a rebound and helped to ensure the economy grow by 8.7 per cent last year.
The premier unveiled increases of 8.8 per cent on social spending and 12.8 per cent on rural outlays, as he pledged to expand pensions, raise health-and-social-security outlays to avert instability in the economy.
Wen warned of the latent risk in China's banks, and promised to crack down on property-speculation. He also cited excess capacity in manufacturing and weak support for the rural income growth. He urged Chinese firms to improve their ability to innovate and produce high-tech and high-quality products.
In his wide-ranging speech to the rubber-stamp parliament, the premier dwelt on high areas of concern among his 1.3 billion fellow-citizens: soaring house prices, jobs, inflation and corruption. He said: "Everything we do, we do to ensure that the people live a happier life with more dignity."
After the recent ethnic riots in Tibet and the Muslim far western Xinjiang province, the premier lay emphasis on the need to ensure minorities felt a "sense of citizenship", saying: "The Chinese nation's life, strength and hope lie in promoting solidarity, (and) achieving common progress of our ethnic groups."
Wen's speech came a day after Beijing announced an increase of 7.5 per cent in its defense budget for 2010, a reduction of 50 per cent compared to last year's planned growth of 14.9 per cent--the slowest pace of expansion in more than a decade.
Li Zhaoxing, spokesman for the annual session of the National People's Congress (NPC), told a press conference Thursday in Beijing that the planned defense budget was 532.115 billion yuan (about USD 78 billion), an increase of about 37 billion yuan from last year's figure.
This marks the first time that China's defense budget growth rate rose less than 10 per cent after more than 20 years of double-digit increases.
Defense-spending would account for 6.4 per cent of the country's total fiscal expenditure in 2010, the same as last year, he said, adding, as a proportion of the GDP, China was still spending less than many other countries, including the United States.
China's defense expenditure in recent years accounted for about 1.4 per cent of its GDP, he said, noting that ratio was four per cent for the United States, and more than two per cent for the United Kingdom, France and Russia.
Taking into account China's large population, its vast territory, and its long coastline, the country's defense budget was "comparatively low," Li said. But he pointed out that the figures were tentative until the budget plan was approved at the NPC annual session due to open Friday in Beijing.
The spokesman said the increased budget would be mainly used to support military reforms and improve its capability to deal with various security threats and complete diversified tasks. A part of the money would be used to raise the living standards of servicemen, he added.
Li also claimed that China was increasing transparency on its expenditure on defense after Washington repeatedly urged Beijing to be more open about its rapidly-rising military-spending. As a part of this exercise, he said his country was submitting defense budgets to the NPC annual sessions for approval, issuing white papers every two years on its national defense, and establishing a spokesperson system and websites for its Defense Ministry.
Asserting that the only purpose of China's military strength was to safeguard the country's sovereignty and territorial integrity, the NPC spokesman added Beijing had always taken the path of peaceful development in line with its national defense policy.
News are provided by InstaForex.