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Premier Wen Jiabao promised Monday to spend more on boosting incomes in China's poor countryside and protecting the environment as he announced budget plans for 2007.

 

The government also will maintain controls meant to contain a surge in housing prices, Wen said in a speech at the opening of the annual session of China's legislature.

 

China's leaders must "safeguard social fairness and justice and ensure that all of the people share in the fruits of reform and development," Wen said.

 

Total spending by China's central governments will rise 14.4 percent to 2.7 trillion yuan (US$335 billion; euro265 billion), Wen said.

 

The premier announced an economic growth target of 8 percent, well below last year's expansion rate of 10.7 percent, amid efforts to avert a runaway expansion. 

 

In the countryside, spending on agriculture, schools, medical clinics and other programs will rise by 15 percent to 391.7 billion yuan (US$51 billion; euro39 billion), Wen announced.

 

"Agriculture, the base of the economy, remains weak, and it is now more difficult than ever to steadily increase grain production and keep rural incomes growing," he said.

 

The government will promote environmental protection and energy efficiency by shutting down small power plants and antiquated facilities in the steel, cement and aluminum industries, Wen said.

 

Chinese leaders are trying to improve energy efficiency to reduce both environmental damage and China's reliance on imported oil, which they see as a strategic weakness.

 

China is one of the world's biggest consumers of oil and coal, and uses several times as much energy per unit of economic output as the United States, Japan and other countries.

 

Wen gave no specifics of conservation efforts, but said the government will use market forces, pricing and taxes "to promote energy saving and environmental protection."

 

The premier warned that China still faces strains from the financial imbalances caused by its surging trade surplus and excess liquidity in its financial system. But he announced no new trade initiatives.

 

(China Daily via AP, March 5, 2007)