China vows new measures to help poor

With capitalist-style reforms topping his agenda, China’s premier opened its legislature today by vowing more action to help the poor and thrust the economy forward – including cutting taxes for farmers and streamlining regulations for entrepreneurs.

Wen Jiabao also promised a beefed-up military and said there would be no compromise on Taiwan, a self-ruling island that China says is part of its territory and has threatened to retake by force.

Speaking on a People’s Congress stage festooned with red flags and other traditional emblems of Chinese communism, Wen heralded China’s newly confident profile in foreign affairs.

“We enjoy higher status and greater influence in the international arena than ever before,” he said.

His speech opened a 10-day session of China’s largely ceremonial legislature that will take up the decidedly uncommunist goal of enshrining protections for private property in the constitution. The Communist Party has made the change a priority, and it is certain to be endorsed.

Wen said he expected 7% growth in the Chinese economy during 2004 and targeted a key priority of the leadership: lifting hundreds of millions of rural Chinese from poverty.

He said farm taxes would be reduced immediately, then eliminated within five years – a remark that elicited hearty applause among the thousands of party-approved legislators gathered from all corners of China, still a predominantly rural nation.

Wen also said the government would directly subsidise grain producers, at a cost of €900m this year.

“Rural incomes have grown too slowly,” Wen said. “The income gap is too wide among some members of society.”

China’s economy grew by a blistering 9.1% last year, but much of that was concentrated in the nation’s already prosperous coastal cities. Even newly rich urbanites who once looked down on their country cousins now voice distress that the average farm income remains less than 50c a day.

Delegates to the legislature, the National People’s Congress, also cited the rich-poor gap as a key problem facing China. Not only do lagging farm incomes threaten social stability and communist rule, but they also reduce purchasing power.

“The plight of the farmers is pressing,” said Zhu Weifang, a delegate from the south-eastern province of Anhui.

Also on the legislative agenda: a new military budget to be released tomorrow, days before a Taiwanese presidential election and referendum on the missiles that China has pointed at the island.

Wen amplified the government’s oft-stated policy that China “will never allow anyone to split Taiwan from China by any means”. But he also reiterated that peace was the preferred path.

“We will do everything possible to bring about the peaceful reunification of the motherland,” he said. The sides separated in 1949 during a civil war that ended with the communists taking power on the mainland.