China’s Premier Calls for More Domestic Spending, Slower Growth

Posted March 5th, 2012 at 3:10 am (UTC-5)
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China’s premier called Monday for a boost in domestic consumption to keep the economy expanding.

In a speech at the opening of the National People’s Congress, Premier Wen Jiabao promised increased spending on health care and social services, higher wages for middle and low-income earners, and expanded consumer credit, among other things, to help people spend more.

Despite its efforts, Mr. Wen said the government was lowering its economic growth target for this year to 7.5 percent, down substantially from growth rates of 9.2 percent in 2011 and 10.4 percent last year. Mr. Wen said the target reflects the government’s determination to “make progress while maintaining stability.”

He acknowledged that the government needs to do a better job in several areas, including the protection of property rights, controlling prices and workplace safety.

“There are still some deficiencies and shortcomings in the government’s work. Targets for conserving energy, reducing emissions, and controlling prices are not being met. Problems concerning land expropriation, housing demolition, workplace safety, food and drug safety and income distribution are still very serious and the people are still very concerned about them.”

The premier also said Beijing will keep a stable currency exchange rate and institute policies to prevent systemic financial risks.

“We will improve the mechanism for setting the RMB exchange rate, make the floating exchange rate regime more flexible comma and keep the RMB (renminbi currency) exchange rate basically stable at an appropriate and balanced level. We will vigorously develop the foreign exchange market, diversify foreign exchange products, and provide more tools for market participants to hedge foreign exchange risks.

Mr. Wen called for unity among China’s ethnic groups in implementing government policies in order to bring prosperity to impoverished parts of the country.

“China is a unified multi-ethnic country. Only when its ethnic groups are united as one and work for the development of all, can China achieve prosperity.))

The speech opened a 10-day session of the National People’s Congress involving almost 3,000 delegates in the Great Hall of the People in Beijing.