China defense budget expands by 10.7 %, economic liberalization soon: Wen

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China plans to raise its central government defense budget by 10.7 percent to 720.2 billion yuan (114.3 billion U.S. dollars) in 2013, according to a budget report submitted to the national legislature for review on Tuesday morning.

The military spending will be used to improve living and working conditions of service people, make the armed forces more mechanized and information-based and safeguard national security.

China spent 650.6 billion yuan on national defense in 2012, an increase of 11.5 percent than the previous year, says the report.

Moderate growth of defense spending can better achieve PLA’s goal to boost combativeness, said Yin Zhuo, director of the Expert Consultation Committee of the PLA Navy. Yin said; “the PLA is at a stage of intensifying efforts to accomplish the dual historic tasks of military mechanization and full IT application. It is a critical moment that calls for greater defense expenditure”.

General Secretary of the Communist Party of China (CPC) Central Committee Xi Jinping has ordered the PLA to intensify its “real combat” awareness in order to sustain military readiness. “It is the top priority for the military to be able to combat and win battles,” Xi, who is also the chairman of CPC Central Military Commission, made the remarks during an inspection in December.

Meanwhile, The 12th National People’s Congress (NPC), China’s parliamentary body, opened its first annual session on Tuesday morning at the Great Hall of the People in Beijing.

NPC deputies will elect new president and vice president, decide on a new premier, vice premiers and the cabinet, as well as deliberate a government institutional reform plan. Nearly 3,000 NPC deputies from across the country attended the opening meeting along with top Party and state leaders Hu Jintao, Xi Jinping, Wu Bangguo, Wen Jiabao, Jia Qinglin, Li Keqiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan and Zhang Gaoli.

Premier Wen Jiabao delivered a government progress report at the opening meeting, chaired by Zhang Dejiang, executive chairperson of the session’s presidium. It was the last time that Wen delivered the government work report as the premier. Wen said; “under the leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping as General Secretary, let us unite as one and work hard to finish building a moderately prosperous society in all respects and achieve the great rejuvenation of the Chinese nation.”

The report set the country’s economic growth target of this year at 7.5 percent and promised to curb the Consumer Price Index (CPI) increase at around 3.5 percent. It also vowed to create more than 9 million new urban jobs and keep the registered urban unemployment at or below 4.6 percent.

The report stated that the government would ensure that the per capita income of residents increases in step with economic growth.

The year 2013 is the first year for fully carrying out the guiding principles of the 18th Communist Party of China (CPC) National Congress, a crucial year for continuing to implement the 12th Five-Year Plan and an important year for laying a solid foundation for finishing building a moderately prosperous society in all respects, Wen said.

“China remains in an important period of strategic opportunities
during which much can be accomplished,” wen said.

There are many favorable conditions and positive factors as well as a number of risks and challenges for China’s economic and social development, he said. The profound impact of the global financial crisis persists, and the recovery of the world economy is full of uncertainty and not yet on a stable footing, he said.

China is experiencing a growing conflict between downward pressure on economic growth and excess production capacity. The government has not fully carried out the transformation of its functions and some areas are prone to corruption.

In his report, Wen, the premier since 2003, made several suggestions to the next cabinet, stressing the importance of changing the growth model and pressing ahead the reforms. He suggested that the country should expand domestic demand as a long-term strategy for economic development. “To expand individual consumption, we should enhance peoples’ ability to consume, keep their consumption expectations stable, boost their desire to consume, improve the consumption environment and make economic growth more consumption-driven,” he said.

The premier also proposed to reduce the share of government investment in the country’s total investment and ease the control over market access for private capital. Wen encouraged the next government to deepen reform and opening up with “greater political courage and vision.”