CHINA: Chinese Premier Wen Jiabao closes nation's annual congress session with press conference emphasising importance of more opportunities for rural poor

Chinese Premier Wen Jiabao closes the nation's annual congress session with a press conference emphasising the importance of more opportunities for the rural poor. Improving the plight of China's 750 million farmers is high on the government's agenda for this year, Chinese Premier Wen Jiabao said on Friday (March 16). "At the moment, the most important thing for China is to ensure people all have full opportunities in education, adopting progressive employment policies, bridge the income gap and build a social security system that covers rural and urban areas in China," Wen told a news conference marking the end of China's annual parliament. Wen has pledged to lift spending on the countryside by 15.3 percent this year, expanding a government campaign to build a "new socialist countryside" that promised to narrow China's yawning urban-rural wealth gap. Those with no job, no land and no social security will be targets of a promise in Wen's work report - delivered at the opening of the congress on Monday (March 12) - to set up a minimum cost of living allowance for the country's most disadvantaged rural residents. China counts those in "dire poverty" as those who earn less than 683 yuan ($88) a year and "low income" residents as those whose annual income is less than 958 yuan. Wen Jiabao also said he wants his April visit to Japan to help overcome longstanding strains between the two Asian powers. He said both Chinese and Japanese citizens wished for closer ties. "Developing ties and friendship between China and Japan not only goes along with history, but also the will of the people," said Wen. Relations between China and Japan were strained under former Japanese Prime Minister Junichiro Koizumi, who regularly visited a Tokyo war shrine that China considers a symbol of unrepentant militarism from World War Two. Wen said Chinese plans to form a new company to invest part of the country's swollen foreign exchange reserves will not have an adverse impact on the U.S. dollar. Wen gave no time-frame for the creation of the new investment vehicle, but said that it would be an independent entity unconnected to government ministries or commissions. "China's creation of the new agency will not have any impact on U.S. dollar-denominated assets," said Wen. A large portion of the country's over $1 trillion in reserves, the world's largest stockpile, were parked in U.S. dollar assets, Wen said, without giving details on what has long constituted a state secret. Traders have long fretted over Beijing's plans to diversify its foreign exchange investments due to their potential impact on global markets. One of the landmark bills to come out of the National People's Congress is a corporate income tax law - passed during the closing session on Friday (March 16) by large margins. The corporate income tax bill ends preferential treatment for foreign-funded firms by unifying tax rates at 25 percent, a move that reflects China's determination to wean its economy off exports and move away from cheap manufactured goods. The Chairman of the American Chamber of Commerce, James Zimmerman, is positive that this will not discourage foreign investment in China. "The key is that the, to provide national treatment for both domestic and international companies. The impact, as long as the law is implemented in a uniform manner, the impact should be minimal, but one of the concerns we have is with respect to those companies that came to the market on the basis of receiving preferential treatment and their expectations should be met", said James Zimmerman. Parliament is largely a rubber stamp for the ruling Communist Party's policies, affirming priorities for the year ahead.

ITN Source | March 17, 2007

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