Last updated at: (Beijing Time) Friday, March 05, 2004

Balanced development: no easy challenge but necessary

In the past two decades, China's economy grew at an average rate of eight percent annually. But the gap between rich and poor, urban and rural areas, and different regions of China is big and still widening. The Chinese government has realized it now and begun to solve the problem by promoting the "scientific concept of development".


Background: gap of development
In the past two decades, the Chinese economy grew at an average rate of over eight percent. Government officials at local levels generally hope for a fast economic growth, which would help improve infrastructures and hopefully bring down unemployment.

Since China began to speed up the reform of the state-owned enterprises 10 years ago, the number of laid-off workers has gone up sharply. The jobless rate in urban areas rose to 4.3 percent last year, and is forecast at about 4.7 percent this year.

However, it's equally important for the government to avoid any major price hikes resulting from possible economic overheating. Income disparities have widened remarkably in China for the past decade. A recent survey indicates that less than 10 percent of the population enjoy more than one third of all private savings in banks, which meant the majority of ordinary people are more vulnerable to price changes.

"Development in different regions of the country is not balanced; the income gap is too wide among some members of society; and pressure on resources and the environment is mounting," Wen noted in his report.

Mu Degui, an NPC deputy from the underdeveloped remote province of Guizhou, agreed to Wen's judgment. Stepping out of the Great Hall of the People after having heard Wen's report, Mu said to reporters that "it is now necessary for the government to tackle the problem of widening gap between the rich and poor, and keep a coordinated development between the economy and society, between people and environment."

Scientific concept of development
Elaborating on the government's principal tasks for 2004, the premier underlined the Scientific Concept of Development, a term frequently used by top Chinese leaders recently to signal a shift of the government's development philosophy from a growth-centered one to a people-centered one.

The central authorities will pay more attention to exercising macro-control, balancing the interests of all parties, putting people first, and promoting reform and innovation in a balanced way, Wen said.

According to the policy package contained in the government work report, the overall growth in fixed asset investment will be scaled down in 2004, but public spending on education, health care, environmental protection and other social undertakings will rise at a higher speed.

Development of the non-public sector will be encouraged to absorb more jobseekers. The government's budget spending to aid reemployment services will shoot up by over 50 percent this year, in hopes of helping five million laid-offs get jobs.

More public funds will be poured into rural areas, where nearly900 million people, or nearly 70 percent of the country's total, live. Their average income stands at just one third of that of urban residents currently.

The NPC deputies burst into applause at the meeting when Wen said that the central government plans to earmark more investment in the farming sector, reduce the agricultural tax rate from this year and eventually rescind the tax in five years. This measure means the farmers will have an additional seven billion yuan to spend this year alone.

"Anyway, growth rate is important. But what people get from the growth is more important. I feel the seven percent growth combined with detailed measures targeting different problems is appropriate," said Lu Ruihua, a deputy from economic powerhouse Guangdong.

"The central authorities have proven to be sober-minded and thoughtful by presenting such a policy package to us," said Lu.

Source:Xinhua/People's Daily Online

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