updated 3/5/2007 4:43:56 PM ET 2007-03-05T21:43:56

Seeking to calm churning social tensions, Chinese Premier Wen Jiabao offered up a list of expensive new programs Monday catering to groups ranging from the military to the rural poor.

Corruption, land seizures and unemployment have fueled dissatisfaction and unrest, while pressure on the Communist Party to stem a widening income gap is intense.

Wen's address to the national legislature Monday had something for almost everyone: education and health care subsidies for the poor countryside; promises of a high-tech upgrade for the 2.3-million member armed forces; an industrial efficiency drive for growth-minded local officials.

Revealing 2007 budget plans, Wen called for spending increases of 42 percent in education, 87 percent for medical care, 15 percent for rural areas and 14 percent for social security. He did not detail the actual spending amounts in his speech.

But total spending by the central government is scheduled to rise 14.4 percent to $335 billion, according to a budget outline released by the Finance Ministry. It projected an annual deficit of $31 billion, nearly 17 percent less than 2006 due to robust tax revenue collections.

Rural students get break
Tuition and other fees for all rural students will be eliminated, easing financial burdens on 150 million rural households, the premier said.

Wen also said the government would speed up the transformation of China's 2.3-million-person armed forces into a high-tech military, boosting defense spending by 17.8 percent in 2007 to $44.94 billion, the biggest jump in more than a decade.

China has been spending heavily on advanced war planes, fighting ships, submarines, and electronics. In January, the country successfully tested an anti-satellite weapon, raising alarm bells in the Pentagon, where officials estimate total Chinese military spending at up to several times the declared budget.

Wen also announced new policies to clean up China's fouled rivers and polluted air, calling on banks to limit lending to energy-guzzling and highly polluting industries and pledging to shut small coal-burning plants and "backward iron foundries and steel mills."

"Let us work together with one heart and one mind, blaze new trails, and energetically progress with reform, opening up and socialist modernization," Wen told the nearly 3,000 members of the National People's Congress.

With promises to spread China's rising wealth more evenly and strengthen the legal system, Wen and President Hu Jintao want to project the image that they enjoy wide-ranging support ahead of the year-end Communist Party congress, at which they're expected to entrench their five-year rule by appointing allies to top posts, said Steve Tsang, an expert on Chinese politics at Britain's Oxford University.

"They're not electioneering in the normal sense, but they do want to carry the support of the constituencies," Tsang said.

Along with the national budget, delegates at this year's 12-day session are expected to approve property rights and corporate tax bills. The various meetings on the congress' sidelines also allow crucial face-time between delegates and leaders, permitting Hu and Wen to communicate their priorities directly.

Lawmaking officers
Military officers, more than 200 of whom are members of the legislature, said the increase was only incremental and would mainly be spent on boosting salaries.

"I really don't think it's much compared to other countries. We have a real need to improve living conditions and raise our technological level," Maj. Gen. Yuan Jiaxin said following Wen's speech.

Wen drew his biggest applause when renewing Beijing's pledge not to tolerate moves by self-governing Taiwan toward formal independence in defiance of China's claims over the island.

"We firmly believe that with the efforts of all Chinese people, including our Taiwan compatriots, complete reunification of China will definitely be realized," Wen said near the end of his 2-hour, 15-minute speech in the cavernous Great Hall of the People.

He declared an economic growth target of 8 percent, well below last year's rate of 10.7 percent, the fourth straight year of double-digit growth. But Chinese officials have consistently promised single-digit growth rates in recent years.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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