China’s leader warns of urgent need to rebalance its society

As concerns over instability rise ahead of a once-in-a-decade change of
leaders, the Finance ministry has authorised an 11.5 per cent rise in the
domestic security budget to 702 billion yuan (£70 billion) this year.

Meanwhile, the People’s Liberation Army budget went up by 11.4 per cent to 670
billion yuan, and Mr Wen said it was vital for China to be able to feel
secure in the Pacific.

As the United States flexes its muscles in the region, sending 2,500 Marines
to Australia and renewing a relationship with the Philippines that will see
joint exercises boosted, as well as ship and aircraft visits, Mr Wen said it
China must “enhance its armed forces’ capability [ …] to win local
wars under information age conditions”.

While China may not be able to match the US for firepower, it has invested in
an army of hackers and cyber-warfare experts to wage a technological war
“should the need arise”.

Mr Wen said the government had made progress on some key fronts, including on
finding more jobs for university leavers, raising incomes for rural workers,
and on broadening access to health care and low-income housing.

He also promised to rein in government spending that has seemed, at times,
preposterously lavish. “We will be more economical; strictly restrict
spending on official overseas trips, vehicles for official use, and official
hospitality; greatly reduce meetings and documents,” he said. The
budget for banqueting alone has hit 300 billion yuan a year, according to
the Beijing News.

Analysts said it was unsurprising that Mr Wen appears to have toned down his
calls for further reforms. Over the next two years, they said, the need for
stability as the new generation of leaders takes charge will override any
calls for the Communist party to reassess its firm grip on the country. “Reform
may be necessary, but it is also risky,” noted Zhang Ming, a politics
professor at Renmin University.

“The question is how to change the system. At the moment, the system has
become corrupt and rotten and it is impossible to push through reforms. We
need a new impetus. But can we introduce a new impetus, dare we do so, and
what kind of impetus should it be? These are the questions,” he said.

Liu Shanying, a politics expert at the Chinese Academy of Social Sciences, a
government think tank, said that while the Chinese public is pushing for
change, the country’s intellectuals had failed to come up with a workable
plan.

“No one has worked out how to improve people’s livelihoods, break up the
interest groups, maintain stability and development, and satisfy all the
public demands which go along with China’s rising status in the world. It is
a very difficult challenge,” he said.

Mr Wen warned that China now faces weaker economic growth and can no longer
rely on international markets to soak up its goods.

“The road to global economic recovery will be tortuous, the global
financial crisis is still evolving and some countries will find it hard to
ease the sovereign debt crisis any time soon,” he warned. “The
unemployment rate remains high in the major developed economies, and they
lack impetus for growth”. Mr Wen cut China’s economic growth targets
for the first time in eight years to a still respectable 7.5 per cent.

Mr Wen also promised that the government would do more to protect China’s
farmers. Farmers’ rights to their land are conferred by law, he said “and
these rights must not be violated by anyone”.

In recent years, a spate of violent protests has arisen over the seizure of
farmland for token compensation, by local governments, who then sell it on
at a large profit. A recent survey by Landesa, a rural land rights campaign
group, found 43 per cent of farmers had seen

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