China boosts spending as economy slows

China’s premier outlined plans Monday to fuel domestic consumption, including subsidies for social programs and higher spending for businesses, as the government grapples with a slowing economy and rising public demands for greater fairness.

In a speech that is China’s equivalent of the state of the nation, Premier Wen Jiabao offered increased assistance and programs to benefit a wide array of groups; higher minimum wages, heftier subsidies for education and farmers, more loans for strapped private businesses and added help for troubled exporters. He called for more paid vacations for workers and expanded consumer credit.

The aim, wen said, is to help China weather a shift as it looks for new engines of domestic growth while its main markets in Europe and the United States struggle and an investment binge at home flags while demand for job persists.

“Internationally, the road to global economic recovery will be tortuous,” Wen said at the opening of the national lagislature’s annual session in the Great Hall of the people. “Domestically, it has become more urgent but also more difficult to solve institutional and structural problems and alleviate the problem of unbalanced, uncoordinated and unsustainable development.

In a sign of the government’s downshift, Wen set the economy’s growth target at 7,5 percent, lower than the 8 percent it has stood at for years. Thought forecasts project higher than 8 percent growth for the year, the lower target underscores Beijing emphasis on better, not faster growth. While the national people’s congress is a largely pro forma affair its nearly 3000 delegates are mostly members of the ruling Communist Party this year’s 10 day session is likely to see more intense back-channel politicking as the leadership negotiates a delicate political transition, President Hu Jintao, Wen and most others in the senior leadership are due to begin stepping aside for a younger generation of leader.


source : Jakarta Post, Tuesday March 6, 2012 (page 11)