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Wen: China's economy to grow 8% in 2005
Updated: 2005-03-05 09:18

Chinese Premier Wen Jiabao reiterated here Saturday the renminbi exchange rate would be kept "basically stable" at a rational equilibrium in 2005.

Premier Wen Jiabao delivers his government work report at the third session of the 10th National People's Congress in the Great Hall of the People in Beijing March 5, 2005. [Xinhua]
"We will push forward the reform of the exchange rate determination mechanism step by step," Wen said in his government work report delivered at the opening meeting of the Third Session of the 10th National People's Congress (NPC), China's top legislature.

China's central bank announced earlier the country turned in "double surpluses" -- in both current and capital accounts -- in 2004. In breakdown, surpluses from current accounts -- which track trade, income from investments and overseas workers, as well as one-way transfers such as foreign aid -- reached roughly 70 billion US dollars last year. Capital and financial account surpluses reached about 112 billion dollars.

Top Chinese leaders and central bank authorities, however, have repeatedly noted that the country should first ameliorate its financial system before implementing a flexible exchange rate mechanism.

Some developed countries have said that China has held the yuan artificially low, giving China's exporters an "unfair advantage" and contributing to its trade surpluses.

8% GDP Growth Planned

China will gear down its high-octane economy to a level lower than the stunning 9.5 percent registered in 2004, as Premier Wen Jiabao announced Saturday that the government targets on an 8-percent GDP (gross domestic product) growth rate this year.

"Neither a big up nor down in the economy is conducive to economic growth, reform and opening-up drive and social stability," Wen stressed in his government work report delivered at the opening meeting of the annual session of the National People's Congress (NPC), China's top legislature.

The target was set forth in line with China's de facto economic scenario by taking into account "both the demand and the possibility", as well as employment and inflation targets among others, the premier noted in his report.

The Chinese government is projected to cap the registered urban unemployment rate at 4.6 percent by creating 9 million new jobs and the hike of consumer price index (CPI), a key barometer of inflation, at a modest 4 percent this year.

The country's urban jobless rate stood at 4.2 percent by the end of 2004, while the inflation reached an average 3.9 percent last year.

Wen also said China aims to maintain basic balance in international payments this year.

China's trade surpluses have become an excuse for some developed countries to demand the appreciation of yuan.

The third session of the 10th National People's Congress opens in the Great Hall of the People in Beijing March 5, 2005. Premier Wen Jiabao delivers the government work report. [Xinhua]
Cross-Straits Ties

Premier Wen Jiabao said that the Chinese mainland will continue working to restore consultation and negotiation between the two sides of the Taiwan Straits under the one-China principle and on the basis of equality.

"We will make the greatest possible effort to do anything conducive to the development of cross-Straits relations and the country's peaceful reunification," Wen said in his government workreport.

Wen said the mainland will adhere to the basic principles of "peaceful reunification" and "one country, two systems" and the eight-point proposal for the current stage of efforts to develop cross-Straits relations and promote peaceful reunification of the motherland, safeguard peace in the Taiwan Straits and facilitate steady development of cross-Straits relations.

"We will encourage and promote visits by individuals and economic and cultural exchanges and cooperation across the Straits.We will encourage and facilitate establishment of the 'three direct links' between the two sides," said Wen.

Wen said the Anti-Secession Law (draft), which will be deliberated in the current NPC session, provides a full expressionof the mainland's unvarying position, which is that "we are working most sincerely and energetically to bring about peaceful reunification".

"This law represents the common will and strong determination of the entire Chinese people to safeguard the sovereignty and territorial integrity of the country and never allow secessionist forces working for "Taiwan independence" to separate Taiwan fromChina under any name or by any means," he said.

"We will work together with our Taiwan compatriots to accomplish the great undertaking of reunifying the motherland," Wen said.

Chinese lawmakers and top political advisors expressed their support of the making of the anti-secession law.

"As the 'Taiwan independence' secessionist activities are becoming more rampant, it is very crucial to make this law now," said Xu Shiquan, a member of the National Committee of the ChinesePeople's Political Consultative Conference (CPPCC), in an interview with Xinhua.

Xu, also vice-president of the National Society of Taiwan Studies, said that the law aims to check "Taiwan independence" secessionist activities. It's by no means a law to "unilaterally alter the status quo" across the Taiwan Straits and a "war mobilization law".

US$1.3b on reemployment

The Chinese government has proposed to allocate 10.9 billion yuan (1.3 billion US dollars) on reemployment work this year, 2.6 billion yuan (313 million US dollars) more than last year, said Premier Wen Jiabao.

The government plans to include for the first time workers laid off from collectively owned businesses into its reemployment program in 2005, Wen said.

The program used to target only workers laid off from state firms. In 2004, it helped 5.1 million laid-off workers find new jobs, including 1.4 million people who are aged above 40 and are considered the least advantaged group on the job market.

The Ministry of Labor and Social Security has vowed to help another 5 million laid-off workers find jobs this year.

"We will continue to follow a proactive employment policy...conscientiously implement all policies and measures to support reemployment," said Wen, adding that local budgets will also increase reemployment allocations.

Experts say the government's active pro-employment policy, along with the sound economic performance, has brought about the first drop in the country's urban unemployment in 2004.

China's registered urban jobless rate stood at 4.2 percent in 2004, down 0.1 percent from 2003.

The Ministry of Labor and Social Security has locked the registered urban unemployment rate for 2005 within 4.6 percent, a slight fall from the original 2004 goal of 4.7 percent.

Experts say the world's most populous nation is under heavy pressure to create enough jobs for its huge workforce that consists urban residents as well as the increasing number of surplus laborers from the rural areas.

The country has taken active policies to promote employment since 2002. Packed with a series of preferential measures in taxesand loans, the policy encourages businesses to hire laid-off workers and others less competitive job-hunters. The measures also help the jobless to start businesses of their own, say sources with the Ministry of Labor and Social Security.

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