Inequalities on Wen's list of priorities for China

Hostesses refresh the cups of Chinese president Hu Jintao (left) and Communist Party general secretary Xi Jinping at the National People's Congress in Beijing yesterday. Photograph: Getty

Hostesses refresh the cups of Chinese president Hu Jintao (left) and Communist Party general secretary Xi Jinping at the National People's Congress in Beijing yesterday. Photograph: Getty

Wed, Mar 6, 2013, 00:00

At the same time, China is again boosting its defence budget to modernise its military, as it takes a more robust regional stance on territorial rows with its neighbours.

“Some people still lead hard lives,” Mr Wen said yesterday as he delivered a speech to nearly 3,000 delegates in the Great Hall of the People at the annual parliamentary session.

Outside on Tiananmen Square, hundreds of soldiers, police and plainclothes security officers, some equipped with fire extinguishers, guarded the vast hall for the opening day of the 13-day legislative session.

Mr Wen was referring to the yawning income gap in China, which has seen much of the wealth concentrated among a small number in the cities of the coast and the south, but little spreading to the poor heartland.

“We must make ensuring and improving people’s wellbeing the starting point and goal of all the government’s work, give entire priority to it and strive to strengthen social development,” said Mr Wen, who will step down at the end of the parliamentary session.

Export markets

China’s economy is an engine of global growth, but it has sputtered in recent years, as weakness in Europe and the US has hit its export markets.

Domestic consumers were key to the government’s strategy designed to deliver an overall economic growth target of 7.5 per cent in 2013, he said, a level China barely beat last year when the economy grew 7.8 per cent, its slowest rate since 2000.

The National People’s Congress is the last piece in the elaborate once-a-decade leadership transition, that kicked off with a Communist Party congress in November that saw Xi Jinping named as party leader and military head, along with a phalanx of six other new leaders.

Mr Xi will formally be named president, replacing outgoing Hu Jintao, at some point before the end of the 13-day session, while Li Keqiang will take over as premier.

Mr Wen became known as “Grandpa Wen” for his common touch during his 10 years as prime minister, although that image was somewhat called into question by a New York Times report last year that alleged his family had accumulated billions during his rise to power.

There was special emphasis on reducing energy consumption, improving conservation and solving the country’s serious air, soil and water pollution.

Military spending meanwhile is set to rise this year to 740.6 billion yuan (€91.3 billion), the ministry of finance said in a report. The country’s military spending as a percentage of gross domestic product was unchanged last year at 1.3 per cent.

China likes to point out that its outlay was considerably lower than the world’s biggest defence spender, the US, which spent nearly six times as much as China on defence last year.

More aggressive

China’s neighbours, particularly Japan, say China has become more aggressive in how it handles disputes over territory in the resource-rich waters of the East and South China seas.

While China’s neighbours were watching the defence budget, rising social discontent at home and possible instability prompted a third successive annual increase in spending on domestic security.