With low military budget, China eyes on public welfare

09:09, March 05, 2010      

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China said on Friday it will target economic growth of 8 percent this year, avoiding any slip after it rebounded strongly last year from the world economic recession.

Premier Wen Jiabao announced the figure for annual GDP growth rate during a speech on government work to the National’s People’s Congress, a law-making body.

The growth target keeps China on a course to replace Japan sometime later this year as the world's second-largest economy after the U.S., analysts said.

Beijing has been moving to re-gear its economy toward domestic consumption and away from reliance on bank credit and investment that warded off the global recession.

In recent years China has always set a growth target of 8 percent and usually exceeded it. The Chinese economy bounced back from the economic crisis with growth accelerating to 10.7 percent in the final quarter of 2009, according to government figures, and driving the full-year expansion to 8.8 percent.
Now, concerns of a property bubble also picked up, driven by a jump in food costs amid a torrent of stimulus spending and relatively easy bank lending spree.

Talking to Chinese online readers a few day ago, Wen said that the "government will resolutely curb the precipitous rise of housing prices in some cities and satisfy people's basic need for housing."

The country's rapid economic growth in recent years has exposed a yawning wealth gap, and Wen promised in his address that the government will work to make sure the poorer parts of society also benefit from China's modernization.

Wen's speech opens the annual meeting of the National People's Congress, and comes a day after the government announced it will propose its smallest increase in defense spending in two decades — an effort to save fiscal spending to concentrate on public welfare, boost income of the ordinary consumers and try to reduce a persisting rich-poor gap that's stoking social tensions.

A spokesman for the national legislature said Thursday that the Cabinet plans to raise spending on its military 7.5 percent to $77.9 billion (532.1 billion yuan). The rate of increase is the lowest since the 1980s, and Chinese analysts said that was directly tied to the new fiscal priorities.

"China has not fully recovered from the sluggish foreign trade and employment, and to some extent the government has financial difficulties," said Ni Lexiong of Shanghai University of Politics and Law, in an interview with the Associated Press.
"The situation requires that the defense budget not have a big rise."

People's Daily Online – Agencies
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