[jeffkrol]

Growing inequality is a threat to social stability, Wen said in the discussion, which comes as the ruling Communist Party prepares for the annual meeting of China’s legislature.

The government’s reaction reflects its decades-long effort to keep unrest in check through a combination of economic growth, social reforms and political repression, said Nicholas Bequelin, a China researcher for Human Rights Watch in Hong Kong.

The open letter addressed to the Chinese People listed a series of grievances including official corruption, a widening disparity between rich and poor, rising inflation, expensive housing and a poor health-care system.

In his two-hour discussion, Wen said China will curb inflation by controlling liquidity, by boosting agricultural production and by punishing hoarding and price manipulation, according to the website of the official Xinhua News Agency. Inflation in China, home to 150 million people living on less than $1 a day, accelerated to 4.9 percent in January from 4.6 percent in December as prices excluding food rose the most in at least six years.

Curb Speculation

Wen also said the country has sufficient grain and foreign currency reserves to control food prices. China will also continue efforts to curb speculation in the property market and will use legal and economic measures against hoarding of land, Wen said.

Home prices in January rose in 68 of the 70 Chinese cities tracked by the statistics bureau, defying measures such as higher down-payment requirements and limits on property purchases issued by the government to curb increases. Wen said the measures are becoming more effective and he’s confident of controlling prices.

Wen Vows to Control Chinese Food, Home Prices as Police Head Off Protests - Bloomberg

http://www.bloomberg.com/news/2011-02-27/china-cuts-economic-growth-target-a...inability.html

“We want to put the emphasis of our work on the quality and the benefits of economic growth,” Wen said. “We want the fruits of development to benefit the people.”

China has introduced initiatives to increase domestic consumption, make growth more energy efficient and encourage investment in poorer inland provinces after the economy more than doubled in the past five years as the wealth divide widened, pollution increased and gains in food and home prices accelerated. China can’t “blindly” pursue economic growth that is unsustainable, Wen said today.

During that period, China also became the world’s biggest energy user and the largest emitter of greenhouse gases. A leak of acid-laced water into the Ting River in Fujian province from a Zijin Mining Group Co. mine in July killed enough fish to feed 72,000 residents for a year. Lead fumes from a battery factory poisoned more than 200 children in Anhui province, 23 of which were hospitalized, Xinhua reported in January.

“We can no longer sacrifice the environment in return for fast economic growth,” Wen said in the online discussion today, ahead of the annual plenary meeting of China’s National People’s Congress in Beijing.

“The government is going to pay more attention to sustainable growth, the environment and better distribution of income rather than the pure pursuit of growth,” said Kevin Lai, a Hong Kong-based economist at Daiwa Capital Markets.

The more I read the more embarrassed I get.....got to stop reading... just repeat conserv. bullet points....

Beijing can shift money to households by allowing pay hikes and stronger unions. But that is another potential battlefield: Local leaders count on China's state-authorized labor group to keep investment flowing in by holding down wages.

Already, some provinces and major cities have set the stage for a clash by approving plans for double-digit growth this year based on attracting still more investment.

In social programs, the party plans to expand access to health care, a measure that would allow Chinese families to divert more money to consumer spending, helping to push ahead the consumption drive. Such reforms began in 2009, when the government said it would pump $124 billion into the system over three years.

Individuals now shoulder nearly 40 percent of all health spending, down from two-thirds in 2001. Beijing wants to cut that to below 30 percent by the end of 2015.

http://www.businessweek.com/ap/financialnews/D9LKPMBO3.htm

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Last edited by jeffkrol; 02-27-2011 at 06:48 AM.

[GeneV]

Well, it is not too surprising since there government is nominally still "communist."

[jeffkrol]

Well, it is not too surprising since there government is nominally still "communist."

Sometimes you have to ask yourself are we really that different anymore...
They now seem to have the benefit of both learning from their mistakes and ours, and actually seem a bit open to change for the greater good, go figure....
DANG commies getting in the way of the oligopoly........

Chinese Premier Wen Jiabao Sunday laid out three planks of government policy essential to maintaining stability: closing income gaps; equal benefits and opportunities for rural residents; and eradicating corruption.

Ensuring fair income distribution was an important task in the next five years as it had a direct bearing on social justice and stability, Wen said during a two-hour web chat with the public.

"We will ensure incomes keep pace with economic growth and salaries keep pace with increased productivity," he said.

He said the government would tackle the problem by increasing salaries of low-income groups and minimum living allowances; containing salaries in the industries with higher incomes; and protecting lawful incomes, cracking down on illegal incomes and regulate excessively high incomes.

http://news.xinhuanet.com/english2010/china/2011-02/27/c_13752695.htm

The plan, if put into effect, would benefit middle and low-income groups, Wen said, in answer to a question about taxes.

It soon became a hot topic on the Internet, with thousands forwarding or commenting on it.

"It's definitely necessary to raise the threshold of personal income tax. The main source of tax should not come from low-income groups, but the rich," said a post by "Guangzhou Lawyer" on Sina.com, one of many in support.

http://news.xinhuanet.com/english2010/china/2011-02/27/c_13752694.htm

Chinese Premier Wen Jiabao Sunday tackled the country's yawning wealth gap, comparing economic development to a cake that had to be bigger and more fairly divided.

"Ensuring fair income distribution will be an important task of the government in the next five years," Wen said during an on-line chat with the public, the third of its kind since 2009, prior to the national parliamentary session early next month.

"Income distribution has a direct bearing on social justice and fairness as well as stability."

Despite remarkable economic progress, China has several social problems, including a widening wealth gap and slow increase in incomes. The situation has resulted in social conflict in some areas.

According to a World Bank report, the Gini Coefficient for China surged to 0.47 in 2009, pointing to an unequal distribution of income that could lead to social unrest.

http://news.xinhuanet.com/english2010/indepth/2011-02/27/c_13752516.htm

[wlachan]

I doubt there is much the gov can do in reality. The whole country is corrupted from top to bottom. Almost always the local gov are involved and the local police were used as personal tools to control the victims for their own benefits. You cannot trust the police, the hospitals try to rip you off, the regional gov won't really enforce any central gov policies. Then again nobody is surprised since the central gov has been controlling the people for decades, people at all levels are just replicating their methods. The rich now would try to make as much money as they could at any cost, making fake everything, toxic waste, toxic foods, "invest" in the housing, the cotton, and now the food and Chinese medication. Inflation has gone crazy. Sadly this also impacts HK badly. The ironic part is that huge amount of people from mainland China are visiting HK just to shopping due to faked products and toxic foods in mainland, including daily products and foods. What happens is even HK people have difficulties finding milk powder for their only babies now. There are still huge amount of toxic foods being made everyday and this is no news, to the Chinese anyway. Wen is great at speech and put up the shows, but little can be achieved I am afraid because the whole country is under control by a single party, a selected group of people in absolute power. Corruption is inevitable. I think the Americans didn't realize how lucky they were, and being dragged down by greedy unions and irresponsible overspending.

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Last edited by wlachan; 02-27-2011 at 07:32 AM.

[jeffkrol]

I doubt there is much the gov can do in reality. The whole country is corrupted from top to bottom. Almost always the local gov are involved and the local police were used as personal tools to control the victims for their own benefits. You cannot trust the police, the hospitals try to rip you off, the regional gov won't really enforce any central gov policies. Then again nobody is surprised since the central gov has been controlling the people for decades, people at all levels are just replicating their methods. The rich now would try to make as much money as they could at any cost, making fake everything, toxic waste, toxic foods, "invest" in the housing, the cotton, and now the food and Chinese medication. Inflation has gone crazy. Sadly this also impacts HK badly. The ironic part is that huge amount of people from mainland China are visiting HK just to shopping due to faked products and toxic foods in mainland, including daily products and foods. What happens is even HK people have difficulties finding milk powder for their only babies now. There are still huge amount of toxic foods being made everyday and this is no news, to the Chinese anyway. Wen is great at speech and put up the shows, but little can be achieved I am afraid because the whole country is under control by a single party, a selected group of people in absolute power. Corruption is inevitable. I think the Americans didn't realize how lucky they were, and being dragged down by greedy unions and irresponsible overspending.

Sorry to her that the melamine thing is still a problem. That's just plain evil. And yes our "controlled anarchy" system beats China's dictatorship easily but the 2 are converging.. China is getting a "bit" more like us as we head toward them, only our "central leaders" are bank and wall street capitalists........
Seems you have as much faith in your system as I in mine, only the baseline is higher.. We start at OK where China is at "not so good"....
funny how so many science fiction programs portray the "great merger" between the 2 powers.......
If I remember Hong Kong has quit a disparity of wealth......

[wlachan]

If I remember Hong Kong has quit a disparity of wealth......

Indeed, and it's not getting any better. Those in power are either clueless, or on the very wealthy side. Mated with the worst air pollution in the world, HK is not what it used to be anymore, and getting worse by the day.

[Ratmagiclady]

Sometimes you have to ask yourself are we really that different anymore...
They now seem to have the benefit of both learning from their mistakes and ours, and actually seem a bit open to change for the greater good, go figure....
DANG commies getting in the way of the oligopoly........

Well, I think this is exactly why China has a chance of turning into a pretty good force in the world, especially if they do choose policies like this: unbridled capitalism doesn't mean there isn't state control and repression, ...quite the contrary, as Americans are really starting to clue in: when it comes down to it, it's a lot easier to govern reasonably-happy people than it is to try and bridle the anger at what you yourself are doing: one of the things about where the world is going is that it's money and data and tech, not so much armies, where the real power is, and therefore that's also where the real corruption wants to go: government that becomes just a tool of that becomes pretty much just a joke, (Including people's notions of how sacred 'property' is,) and when that happens, even the rich find their spoils aren't worth so much, no matter how many people they jail.

If China really wants to turn things sustainable and make the playing field more level, they've got a pretty good chance of turning out OK, relatively-speaking.

[jeffkrol]

To narrow the wealth gap, Wen promised more social spending, a higher minimum wage and taxes on real estate.

New social spending could be financed by requiring major state companies to hand over more of their profits to the government, a step a Cabinet official said last month Beijing plans to take.

But that, combined with changes in access to credit and resources, could conflict with Beijing's campaign to create "national champions" in a range of industries from banking to oil to airlines. Regulators who oversee China's top companies say they are less competitive than their foreign counterparts, raising questions about how they will function without continued government support.

A Chinese think tank, the Unirule Institute of Economics, said in a report this month that major state companies are so inefficient that if subsidies are factored out, their return on equity _ a measure of profitability _ was an annual loss of 6 percent from 2001 to 2008.

"It's a question of stopping that," said Thornton. "A lot of it is economic _ changes in interest rates, cheap land and so on. But a lot of it is political and tackling those vested interests."

China promises sweeping economic change - Sunday, March 6, 2011 | 3:25 a.m. - Las Vegas Sun
Same gotcha...

But to achieve its goals, Beijing has to cut subsidies and low-cost bank loans to state companies, real estate developers and other vested interests that have allies in the Communist Party and might fight back.