Economy the focus, and social welfare the challenge, as China’s political session ends

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Economy the focus as China political session ends

BEIJING — China vowed Sunday to remain alert to any renewed signs of economic crisis, but said it will hold the line against critics urging an appreciation of its currency and will not seek an aggressive leading role in world affairs.

Premier Wen Jiabao also repeated China’s stance that a recent dip in relations with the United States was entirely the fault of Washington for allowing the Dalai Lama to visit the U.S. and approving the sale of arms to Taiwan.

“The responsibility does not lie with the Chinese side, but the United States,” Wen said. “We hope the U.S. will face the issue squarely … so as to restore and improve China-U.S. relations.”

Speaking just after the country’s annual legislative session ended with the approval of a budget that extends job-creation and welfare programs to deal with a rapidly expanding rich-poor gap, Wen said China had to be wary of a “double dip” recession this year as it seeks to balance growth, economic structural adjustments and inflation expectations.

Wen said China “must have firm confidence” in dealing with any economic problems.

“The only way out and hope when facing difficulties lie in our own efforts,” he said during a televised news conference lasting more than two hours.

China, the world’s third-largest economy, escaped the worst of the global financial crisis by ordering $1.4 trillion in bank lending and government stimulus.

Although economic growth bounced back to 10.7 percent in the final quarter of 2009, authorities say the global outlook is still uncertain, amid worries that the torrent of lending is adding to inflation and fueling a dangerous bubble in stock and real estate prices.

When asked if China would play a bigger role in international affairs, Wen said China is still a developing country and is focused on improving living standards across the country.

Wen said the government will reform its controversial exchange rate controls but will keep its currency “basically stable.” He gave no indication when Beijing might allow its yuan to rise against the U.S. dollar — a move sought by Washington and other trading partners.

Critics say the yuan — also known as the renminbi — is kept undervalued, giving China’s exporters an unfair price advantage and swelling its trade surplus. China has allowed a roughly 20 percent rise in the currency’s value against the dollar since 2005, but re-imposed tight control after the global financial crisis hit.

Beijing has more than $800 billion of its foreign reserves invested in U.S. Treasury securities, and Wen said the value of the U.S. dollar was a “big concern.” He said he wanted to see the United States “take concrete steps to reassure investors,” but gave no details of what Beijing wanted done.

Wen promised to increase imports to promote trade and appealed to other nations to oppose what he said was rising global protectionism. He complained that some countries were trying to boost exports by weakening their currencies, but did not name any.

The budget passed by the congress called for a 10 percent rise in spending to fuel the economic recovery, with more money for low-cost housing, pensions, and other social programs for the country’s 1.3 billion people.

The priorities extend Wen and President Hu Jintao’s yearslong efforts to spread the benefits of economic growth more broadly across a rapidly changing society. This year, inflation is a looming challenge, with housing prices soaring and worrying rises in food prices that consume as much as 40 percent of household incomes.

Wen said inflation is a serious concern, along with endemic corruption and a yawning gap between rich and poor that leaves millions of migrant workers and farmers without basic government aid.

“These are enough to affect social stability, and even (affect) the consolidation of state power,” he said.

Wen also said he was snubbed at last year’s Copenhagen climate change conference and fired back at critics who accuse China of arrogance.

China was blamed by some for undermining efforts to reach a binding agreement at the December conference and Wen was criticized for skipping a meeting of top leaders attended by President Barack Obama.

However, Wen said he was never formally notified of the event and sent Vice Foreign Minister He Yafei to register a protest. Wen said no explanation had been given about the failure to issue a formal invitation.

“So far no one has given us any explanation about this and it still is a mystery,” he said.

There were no surprises in the way the nearly 3,000 delegates voted during the legislature’s final day. The government work report passed with 97.5 percent of the vote. Delegates made their usual faint display of displeasure over crime and corruption, with negative votes and abstentions counting for 21 percent of the vote on the reports from the Supreme People’s Court and national prosecutor’s office.

Following nearly two weeks of meetings, delegates also passed an amendment to the election law to improve representation for rural areas. Previously, rural delegates represented four times as many people as their urban counterparts, but the amendment erases the distinction, an acknowledgment of the need to buttress the interests of the dwindling farming population.

National and local legislatures in China generally adopt decisions made behind closed doors by Communist Party leaders, while the bulk of the congress’ legislative work is handled by its standing committee. Delegates, who include hundreds of army officers, themselves are carefully vetted by Communist Party officials and selected in a perfunctory election by lower-level committees.

This year’s session — the most public event the authoritarian government holds — had the usual heavy police presence in Beijing, with dozens of political dissidents and human rights activists reportedly harassed or detained.

At least two people who attempted to approach to the hulking Great Hall of the People where the body met on Sunday were dragged away by police.

It was not known what grievances the two had, but they tried to attract the attention of reporters as they left Wen’s news conference.