From Times Online
March 5, 2010
Jane Macartney in Beijing

China congratulated itself today on its escape relatively unscathed from the global financial crisis but warned against complacency and vowed that the poor would not be forgotten in its economic advance.

In his annual “state of the nation” address to the opening session of the National People’s Congress, the rubber-stamp parliament, Wen Jiabao, the Chinese Prime Minister, drew thunderous applause from the nearly 3,000 deputies when he said that China’s economy had been the first in the world to turn around.

But the Prime Minister’s two-hour speech was imbued with his traditional conservatism rather than triumphalism.

"We must not interpret the economic turnaround as a fundamental improvement in the economic situation," he said, speaking from the stage in the cavernous Great Hall of the People. "There is insufficient internal impetus driving economic growth."

Mr Wen set easily achievable goals for 2010, the year in which China is set to overtake Japan to become the world’s second-largest economy.

His target for gross domestic product was 8.0 per cent — unchanged from previous years and generally regarded as the minimum China believes it needs to ensure sufficient economic growth to prevent widescale unemployment and social unrest. Economists say that China’s economy could return to double-digit growth this year.

Underscoring the Government’s determination to avert instability, he unveiled increases of 8.8 per cent on social spending and 12.8 per cent on rural outlays. Those exceed the increase of 7.5 per cent for the military as China tries to narrow yawning wealth gaps that have resulted in the widest income disparity since the launch of market-oriented economic reform 30 years ago.

The budget deficit would again be kept below 3 per cent of national income. Last year the deficit was just 2.2 per cent of GDP, despite its massive 4.0 trillion yuan (£400 billion) stimulus package that helped to ensure the economy grew by 8.7 per cent last year.

Mr Wen said: “We will not only make the pie of social wealth bigger by developing the economy, but also distribute it well.”

In a speech that was a laundry list of every problem the Government faces and every progress it has achieved, Mr Wen devoted several sections to the hot topics of concern among his 1.3 billion people: 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.”

He did not conceal the Communist Party’s anxiety that graft could undermine its 60-year rule, pledging greater media oversight and to crack down on extravagance and meetings “long on form and short on content”. He added: “This has a direct bearing on the firmness of our grip on political power.” Barely a day goes by without a report of some regional official — and sometimes even a central government mandarin — being stripped of office for keeping a mistress or taking bribes.

After two successive years in which China was rocked by anti-Beijing ethnic riots in Tibet and far-western Xinjiang, the Prime Minister paid special attention to the need to ensure that minorities feel a “sense of citizenship”. He said: “The Chinese nation’s life, strength and hope lie in promoting solidarity, achieving common progress of our ethnic groups.”