Wen Jiabao makes pledge to China's poor at National People's Congress

With one eye on revolts in Middle East, Chinese premier says he will put have-nots at the heart of development goals

guardian.co.uk, Tania Branigan in Beijing, Saturday 5 March 2011

A delegate leaves the great hall of the people in Beijing after the
opening session of the National People's Congress on Saturday.
Photograph: Vincent Thian/AP

China's premier has promised to ensure social stability by curbing inflation and raising the incomes of those left behind by the spectacular growth of the world's second-largest economy.

In his address at the opening of the National People's Congress, Wen Jiabao pledged to place the country's have-nots at the heart of its development goals for the next five years.

Inequality has risen sharply in recent years despite government pledges to tackle it. The dangers of popular discontent are now higher on the agenda following the uprisings in the Middle East.

"We must make improving the people's lives a pivot linking reform, development and stability," said Jiabao, in his annual work report. "And make sure people are content with their lives and jobs, society is tranquil and orderly and the country enjoys long-term peace and stability."

Figures show that the official domestic security budget has outstripped the military's for the first time. Spending on law and order will rise to 624.4bn yuan this year, while the People's Liberation Army will receive 601.1bn yuan.

"This shows the rising costs of maintaining internal control ... This system is very sensitive to any instability or contention," said Xie Yue, a political scientist at Tongji University in Shanghai who studies domestic security.

State media offered its most public warning yet against protests, saying "turmoil" in the Middle East had brought calamity to ordinary people.

The commentary in the Beijing Daily newspaper urged citizens to "conscientiously protect harmony and stability", adding: "At home and abroad, some people with ulterior motives are trying to draw this chaos into China. They have used the internet to incite illegal gatherings."

Chinese authorities have reacted harshly to an anonymous call for "jasmine revolution" demonstrations, detaining or harassing scores of activists and dissidents, although the calls to rise up may have come from abroad and only a handful have shown interest in protesting. Another call has been launched for gatherings, again appearing on an overseas website.

The official China News Service said Beijing had mobilised 739,000 police officers, officials, security guards and volunteers to maintain security during the week-long National People's Congress.

Wen's two-hour talk, to about 3,000 delegates, stressed the importance of reining in inflation, with promises to build up reserves and even impose price controls if necessary to restrain food prices.

"This problem concerns the people's wellbeing, bears on overall interests and affects social stability," he said.

Inflation hit 4.9% in January, although many economists believe food prices – the biggest concern for many – will fall soon as the worst effects of bad weather wear off.

Overall the 12th five-year plan outlines a strategy to shift an economy that is heavily dependent on state investment and exports to a more sustainable position, fuelled by consumption.

It aims to boost household income and put private enterprises on a more even playing field, and includes commitments to increase social spending.

"They seem more serious about these issues than they have been previously, but it doesn't guarantee that any of this will get done," said Alistair Thornton, China analyst at IHS Global Insight.

"There's a growing consensus that this time it has to be different. There's more emphasis in this plan than the last one, specifically on income growth.... [But] they need a bigger shake-up to get the results that the rhetoric suggests they want.

"What we were optimistically looking out for – although we recognised it was unlikely – would have been an actual target on income growth or consumption growth. They did say they were targeting a rise in consumption, which has been declining as a share of GDP."

The work report sets the usual economic growth target of around 8% this year, but reduces the figure for the five-year period to 7% annually, down slightly from last year.

Most local governments have set far higher rates, suggesting that as usual growth will come in well ahead of the headline figure.

Related Articles:

China to end GDP obsession

China to make public government officials' assets step by step

Chinese premier to chat with Internet users