In a speech that is China’s equivalent of a state-of-the-nation address, Premier Wen Jiabao said the government would more than halve the increase in spending, to 11.4 percent, as it eases off the heavy stimulus that warded off last year’s global recession. Still, Wen promised hefty outlays for pensions, education, health care and subsidies for farmers to buy small cars and household appliances — all to spread prosperity more fairly.
“Everything we do, we do to ensure that the people live a happier life with more dignity and to make our society fairer and more harmonious.”
While expecting growth of 8% this year, domestic demand is falling among fears of inflation and perhaps a bursting bubble for housing prices.
“The Chinese nation’s life, strength and hopes lie in promoting solidarity and achieving common progress of our ethnic groups,” Wen said. “We need to take a clear-cut stand against attempts to split the nation, safeguard national unity, and get ethnic minorities and the people of all ethnic groups who live in ethnic minority areas to feel the warmth of the motherland as one large family.”
Perhaps surprisingly, budgets are rising more for social causes than for the military, which has expanded Chinese influence on the world’s sea lanes, presumably to ensure transport of goods in and out of the country.
Of course this all sounds positive, though the true justifications are likely more pragmatic than philanthropist. Targeting the lower classes is more likely to result in respending than if the wealthy were the first beneficiaries.
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