China Begins Parliament Session Today

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Mar. 5 – The National People’s Congress (NPC) began its annual full session today at the Great Hall of the People in Beijing.

Chinese Premier Wen Jiabao said during his speech before 3,000 delegates that the nation needs to “reverse the economic slide as soon as possible.”

Mr. Wen said that the government will now focus on the domestic market, encouraging more of Chinese citizens to spend  and consume more goods to boost the economy. This is a departure for China’s economic model that relied heavily on export demand and infrastructure spending to grow GDP.

There was no indication that the government would spend any more beyond its initial RMB4 trillion stimulus plan it announced last year contrary to speculation that led to the advance of China’s stock market and other global markets. Earlier this week, former statistics bureau head Li Deshui said that new stimulus measures were going to be announced during the parliamentary address.

In his speech, Mr. Wen reiterated the government’s goal to maintain an 8 percent GDP growth for the year to maintain social stability. This growth rate is in contrast with the International Monetary Fund’s estimates that China’s economy will only grow by 6.7 percent.

Social stability is the government’s top priority with unemployed rural workers now numbering 20 million and 7.1 million college students graduating and looking for work.

He said the government would improve services and increase spending on social welfare including schools, hospitals and clinics, low-income housing, and environmental programs to name a few. There are also plans to increase subsidies for farmers, pensions and income grants to to the poor. Moreover, the government will spend 17.6 percent more or about US$6.4 billion on social safety net programs.

Mr. Wen said: “We must channel government investment to areas where it best counteracts the effects of the global financial crisis and to weak areas in economic and social development, and no government investment will be made in the regular processing industries.”