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China cuts growth target as parliament opens

05 march 2012, 13:28
the Great Hall of the People during the National People's Congress. ©AFP
the Great Hall of the People during the National People's Congress. ©AFP
China's premier on Monday cut the economic giant's growth target to 7.5 percent for 2012 as he opened a parliament session focused on growth, stability and military might ahead of a leadership change, AFP reports.

Premier Wen Jiabao also said China must boost the capacity of its forces to fight wars on their own doorstep, as he delivered his opening address to the annual session of the National People's Congress (NPC), China's parliament.

The lower growth target, down from eight percent last year, is an official acknowledgement that China's export-driven economy is slowing as Europe's debt crisis and the sluggish recovery in the United States hurt demand for its goods.

The 2012 session is the last before a handover of power that begins later this year, and senior leaders are anxious to ensure the world's second-largest economy grows at a fast pace while keeping a lid on social unrest.

The Asian powerhouse expanded by 9.2 percent last year, slowing from a blistering 10.4 percent in 2010, as global turbulence and efforts to tame high inflation put the brakes on growth.

"We are keenly aware that China still faces many difficulties and challenges in economic and social development," Wen said in his annual speech at the opening of the 10-day gathering in Beijing's Great Hall of the People.

"There is downward pressure on economic growth. Prices remain high. Regulation of the real estate market is in a crucial stage."

Expanding domestic demand was a key focus this year, Wen said, announcing increased investment in low-cost housing, social security, education and higher wages as Beijing seeks to reverse "the trend of a widening income gap".

China typically exceeds the annual growth target unveiled every March, and most economists are predicting gross domestic product growth of 8.0-8.5 percent for China this year.

Wen vowed to maintain property restrictions introduced in the past two years to rein in surging real estate prices that had risen out of the reach of many ordinary Chinese.

The inflation target, meanwhile, was set at 4.0 percent for 2012, unchanged from last year, after consumer prices rose 5.4 percent in 2011.

Inflation has the potential to trigger unrest in the country of more than 1.3 billion people and is a constant bugbear for China's stability-obsessed leaders.

Maintaining social stability is high on the agenda at the annual parliament meeting, attended by about 3,000 delegates from across the country.

Wen also highlighted the sensitive issue of government land grabs, a major cause of public unrest in China, where almost 50 percent of the population still lives in the countryside.

Speaking a day after landmark elections in the southern village of Wukan, where a revolt last year put the growing public anger over land seizures in the spotlight, Wen said farmers' rights to land "must not be violated".

He also said China should enhance the ability of its military to "win local wars under information age conditions", a day after Beijing announced its defence spending would top $100 billion in 2012 -- an 11.2 percent increase on last year.

China's military budget has seen double-digit increases every year for much of the last decade, worrying the United States, which is forging ahead with plans to expand its own military power in Asia.

Wen vowed to "protect the lawful rights and interests of religious groups", in an apparent nod to the growing resentment against Beijing's rule in Tibetan-inhabited areas and in Xinjiang, home to the mainly Muslim Uighurs.

The NPC has limited power and the meeting serves more as a grand rally exalting the ruling Communist party than a forum for real parliamentary debate.

Most decisions are made ahead of time, but this year's event will be closely watched for indications of which leaders will join the Politburo Standing Committee, the highest decision making body in the country, later this year.

President Hu Jintao, Premier Wen and five other leaders are due to relinquish their positions on the Standing Committee at a congress later this year that will also announce their replacements.

During the meeting, which ends on March 14, the legislature is also expected to approve proposed changes to the country's Criminal Procedure Law, which activists fear will legalise secret detentions.

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