China's new priority: social well-being over economic growth

BEIJING (AP) - China's government promised its people on Tuesday that it will fight deep-seated corruption, improve the environment and address other quality-of-life issues demanded by an increasingly vocal public looking for change.

In the government's annual policy speech, outgoing Premier Wen Jiabao signalled that leaders would no longer emphasise growth at all costs and would down-shift development to put priority on social programmes.

"We must make ensuring and improving people's well-being the starting point and goal of all the government's work, give entire priority to it, and strive to strengthen social development," Mr Wen said in a 100-minute speech opening the national parliament's annual session in the Great Hall of the People, his last address before stepping down.

The marked shift in emphasis is emblematic of a once-a-decade leadership transition that began in November when Mr Xi Jinping and other younger leaders were appointed to run the ruling Communist Party. The parliament, known as the National People's Congress, caps the transition and approves appointments to top government posts to manage the economic and foreign policies of the world's second largest economy and rising global power.

Mr Wen's address and the accompanying budget presented by the government on Tuesday are consensus documents approved by the new Xi leadership team.

In a sign of changing styles, the language in Mr Wen's report is much plainer than the often turbid phrasing of years past. It made only passing reference to such ideological rubrics as "socialism with Chinese characteristics" and the guiding theories of reform-era patriarch Deng Xiaoping.

Hundreds of soldiers, police and plainclothes security officer - equipped with fire extinguishers and anti-explosive blankets - ringed the Great Hall and the adjacent Tiananmen Square for the opening session. The public was kept well away behind cordons as the nearly 3,000 congress deputies gathered for the 13-day session.

The legislature is set to approve a proposed streamlining of government ministries, as well as appointments.

Among the changes: Mr Xi will be formally given the title of president, taking the last of the titles from his predecessor Hu Jintao. The party's No. 2, Mr Li Keqiang, will replace Mr Wen as premier.

Together, the new leaders come to power at a time when Chinese feel the policies that delivered stunning growth are foundering in the ill-effects of corruption and environmental degradation and that benefits unfairly accrued to a party-connected elite.

Mr Xi has raised expectations for change in his first months in office, talking about the urgent need to stanch graft and govern by rule-of-law.

"Whether it has been 'harmonious society' or 'beautiful China', those are really sort of idealistic goals they have held up, the kind of life that Xi Jinping has articulated," said Professor Yang Dali, a China politics expert at the University of Chicago. "The challenge now is that everywhere people look, China is far from harmonious, or beautiful for that matter."

Mr Wen's speech put special emphasis on programmes to boost the quality of life. He repeated a phrase he has used for several years to describe the excesses of China's government-directed, investment-heavy economic model, calling growth "unbalanced, uncoordinated and unsustainable." He ticked through a list of problems from excess factory capacity to a yawning income gap that has left the public disgruntled and fueled protests.

"Some people still lead hard lives," he added.

Three times, he called for a change in the growth model to reduce waste, develop the service sector as a source of much-needed employment and direct spending to subsidised housing and other social programmes that would boost household consumption.

Overall government spending will increase 10 per cent to 13.8 trillion yuan (S$2.7 trillion) helped by a 50 per cent increase in the coming year's fiscal deficit. Defence spending will increase 10.7 per cent to 720 billion yuan - a slight slowdown from last year's increase of 11.2 per cent.

Restoring the battered environment came in for special attention, with Mr Wen calling for reducing energy consumption, improving conservation and solving the country's serious air, soil and water pollution.

"In response to people's expectations of having a good living environment, we should greatly strengthen ecological improvement and environmental protection," Mr Wen said. "The state of the ecological environment affects the level of the people's well-being and also posterity and the future of our nation."

He underlined the commitment to the anti-corruption campaign that party leaders have stressed is vital to their legitimacy and survival.

"We should unwaveringly combat corruption, strengthen political integrity, establish institutions to end the excessive concentration of power and lack of checks on power and ensure that officials are honest, government is clean and political affairs are handled with integrity," Mr Wen said.

Leaders targeted a 7.5 per cent economic growth rate for the coming year, which is the same as last year and lower than the 8 per cent rate that dominated planning for decades. However, the figure is largely symbolic because in reality growth has typically been higher. Last year's growth was 7.8 per cent and this year's is expected to be even higher.

This year's boost for national defence continues a nearly unbroken two decades of annual double-digit percentage increases that have made China the world's No. 2 military spender behind the United States. The substantial outlay shows that Mr Xi wants robust backing for the People's Liberation Army at a time when China has tense territorial disputes with neighbours and wants to reduce US influence in the region.