Chinese Premier Wen Jiabao will call for peaceful reunification with Taiwan and warn that China will never stand for the self-ruled island’s formal independence, in a speech to be delivered to parliament on Sunday.
But Wen stops short of repeating long-standing threats to use force if necessary to reclaim the island, which China regards as a wayward province that must eventually return to the fold, according to excerpts of the speech seen by Reuters.
Wen also makes no direct mention of Taiwan President Chen Shui-bian’s decision to scrap the island’s National Unification Council and its 15-year-old unification guidelines, a move Chinese President Hu Jintao has labeled a “grave provocation.”
“It is the people’s will for cross-Strait relations to develop in a direction of peace, stability and mutual benefit,” Wen says. “Anyone who vainly seeks to destroy this great trend will certainly fail.”
Wen also pledges to deepen cultural and economic exchanges between China and Taiwan, to protect the rights of Taiwan businessmen and to work to push transport links between the two sides, which split at the end of a civil war in 1949.
“The great task of the final and complete reunification of the motherland is the common wish of all Chinese people, and nobody can block it,” Wen says.
Economic optimism, warnings
Wen also announced his intent to steer China’s economic juggernaut toward narrowing the chasm dividing its rich cities and restive countryside.
In setting out the government’s goals for the coming year, Wen promises “continuity and stability” in general economic policy, including the currency exchange rate. But he also says more of China’s economic growth and investment must go to farmers and other struggling groups.
Wen praises China’s performance in 2005, when the economy grew by 9.9 percent, in a speech he is due to deliver before over 3,000 deputies to the National People’s Congress on Sunday.
But he warns of dangers and difficult choices ahead. “We also need to see clearly that there are many hardships and problems in economic and social life,” he says in the speech.
“Some deeply seated conflicts that have accumulated over a long time have yet to be fundamentally resolved, and new problems have arisen that cannot be ignored.”
Wen draws a picture of a rapidly growing economy threatened by excessive investment, production gluts and mismanagement. He says China’s rapid industrial expansion is too often undercutting long-term economic health.
“Production gluts are increasingly severe, prices of related goods are falling and inventories are rising. Business profits are shrinking, losses are growing and latent financial risks are increasing,” Wen says in the speech.
Wen’s government is working on the assumption that gross domestic product will grow about 8 percent this year and that consumer prices will rise 3 percent. The government typically sets cautious growth targets; it also set a target of 8 percent for 2005 but actual growth was 9.9 percent.
‘Sluice gates’
Wen promises strict controls on the “sluice gates” of land and credit to deter excessive investment. But China can only find a lasting cure for its economic and social imbalances by raising the incomes, efficiency and confidence of its farmers, he says.
A large section of his report is given over to the government’s plans to build a “new socialist countryside” for the country’s 750 million farmers. Wen says the government plans to spend $42.3 billion on upgrading agriculture as well as billions more on rural social services.
The programme is a “major historic task” to divert government investment, education and healthcare, and bank loans to the countryside, where rising protests against corruption and inequity have alarmed central officials.
“We must apply the guiding policies of industry replenishing agriculture and the cities supporting the countryside,” he says.
But Wen says these redistributive policies will bring China’s industry and cities not pain but more growth by stimulating domestic demand and describes the measures as part of the government’s “strategy of expanding domestic consumption.”
“We will stabilise residents’ outlay expectations to expand current consumption,” Wen says.
Income rises will provide cash for the poor to spend on consumer goods, and improved social security and more affordable hospitals and schools will ease fears about the future, he says.
Wen’s speech avoids breakthrough statements on foreign policy and defence. And he also refrained from threatening force against Taiwan, the self-governed island that China says must accept eventual reunification.
But he left a veiled barb apparently directed at Taiwan President Chen Shui-bian, who recently antagonised Beijing by suspending an official council on reunification.
“It is the people’s will for cross-Strait relations to develop in a direction of peace, stability and mutual benefit,” he says. “Anyone who vainly seeks to destroy this great trend will certainly fail.”
With tensions flaring, China also is set to spend 14.7 percent more on defence in 2006 than it did last year, a spokesman for the national parliament said.
Also expected on Sunday is the annual report of Finance Minister Jin Renqing, who sources said would announce China expects to trim its budget deficit by about 1.7 percent in 2006, further winding back fiscal stimulus that began in 1998.