China will do more to save energy and cut pollution in 2007 while striving to keep its economy humming following four straight years of double-digit growth, Premier Wen Jiabao said on Monday.
In his annual report to the National People's Congress, China's parliament, Wen also promised to lift spending on the restless countryside by 15.3 percent this year to 391.7 billion yuan ($50.6 billion) to improve schools, hospitals and lagging incomes.
The speech, which was light on politics and foreign policy, underscored how Wen and President Hu Jintao have made narrowing the chasm between China's bustling coastal cities and struggling inland villages a task that will define their legacy.
"Protect social equity and justice, and let all the people together enjoy the fruits of reform and development," said Wen, who bowed deeply to the 2,890 delegates, some decked out in colourful regional costumes.
Security was tight throughout central Beijing, with Tiananmen Square cleared and roads cordoned off as delegates converged on the Great Hall of the People. Wen made the need to shun growth for growth's sake a recurring theme of his 2-1/4 hour address, which opened the two-week parliament session.
China has grown by 10 percent or more in each of the past four years, becoming the world's fourth-largest economy. But it is also home to five of the world's 10 most polluted cities; groundwater is tainted in nine out of 10 cities.
"We need to greatly improve the quality and efficiency of economic growth. We must attach greater importance to saving energy and resources, protecting the environment and using land intensively ..." the premier said.
Yet Wen conspicuously made no mention of any drive to combat global warming, even though China is on course to overtake the United States as the biggest emitter of greenhouse gases by 2009.
And while stressing a long-term commitment to cut energy use per unit of output, his speech omitted a numerical goal for 2007. China fell well short in 2006 of its target of a 4 percent cut. Wen said the government was working on the assumption that GDP would grow by about 8 percent this year, the same target it set last year, when GDP actually rose 10.7 percent.
He acknowledged that this year's growth outcome might also be wide of the mark, but said the target has been set to signal to local officials the need "to avoid seeking only faster growth and competing for the fastest growth".
The overall tone of Wen's report suggests policy makers are more relaxed about the state of the economy than this time last year, when breakneck growth in credit and investment raised the spectre of supply gluts and a new crop of non-performing loans.
While the government needed to keep a tight grip on capital spending and bank lending in 2007, the risk of overheating had been successfully averted for now, Wen said. His emphasis was on rebalancing growth, not halting it. "The most important task for us is to promote sound and fast economic development," Wen said.
Nor did he flinch in his support for China's export-driven growth model, which is fanning protectionist sentiment in the West as manufacturers lose market share to Chinese competitors.
"Promoting economic development and increasing employment through the growth of foreign trade is a principle we must pursue for a long time to come," Wen said. He said the government, its tax revenues swelling thanks to strong growth, would cut its budget deficit this year to just 1.1 percent of GDP from 1.3 percent in 2006 - well below the original goal of a shortfall of 1.5 percent.
Wen promised to raise lagging incomes in the countryside, home to more than 60 percent of China's 1.3 billion people. A drive to abolish most school fees for rural children would spread nation-wide, and a scheme to offer farmers basic healthcare - now beyond the reach of many - would also be broadened.
Demonstrations have been common across rural China in protest against stagnating incomes, land grabs and lawless officials. Wen, acknowledging that corruption was a problem, demanded a halt to "extravagance and waste".
"Quite a few local governments, government offices and organisations compete with one another for lavishness and spend money hand over fist, which arouses strong public resentment."