2011/03/14

'No analogy' between China and Mideast unrest: Wen

BEIJING, March 14, 2011 (AFP) - Premier Wen Jiabao rejected any comparison Monday between China and the unrest-hit Middle East, but admitted his government faced potent risks from inflation and other hot-button issues.

"We face extremely daunting tasks and complex domestic and international situations," Wen told reporters in an annual press briefing after the close of the nation's parliament session.

China's ruling Communist Party is grappling with a range of problems such as inflation, rampant corruption, environmental degradation, and land grabs by property developers and local governments who evict existing residents.

The leadership has thus watched with concern as a similar mix of issues -- and a lack of democracy -- sparked popular uprisings in Tunisia, Egypt, Libya and elsewhere in the Arab world, but Wen rejected any comparison with China.

"We have followed closely the turbulence in some North African and Middle Eastern countries. We believe it is not right to draw an analogy between China and those countries," Wen said.

Inflation tops the government's agenda and while pledging further efforts to contain rising prices of food, housing and other essentials in the world's second-largest economy, Wen said inflation was "not easy to control."

"Inflation is like a tiger; once it gets free, it is difficult to put back in the cage," he said.

Inflation has remained stubbornly high -- 4.9 percent in both January and February -- despite a series of steps including three recent interest rate hikes.

Inflation, which hit a more than two-year high of 5.1 percent in November, has a history of sparking unrest in China, with its hundreds of millions of poor farmers and low-paid workers scraping to get by.

Wen pinned part of the blame on the United States, which in November undertook massive stimulus spending known as "quantitative easing" in a bid to jump-start the weak American economy.

"Some countries have pursued a quantitative easing that has caused fluctuations in exchange rates of some currencies and affected global commodity prices," Wen said.

Wen called corruption -- another key factor in the Middle East unrest -- the "biggest danger" faced by China and said political reform was necessary to help combat it.

"Without political reform, economic reform cannot succeed and the achievements we have made may be lost," Wen said.

Similar comments he made last year prompted rumours of a split in the top leadership and especially with President Hu Jintao, whose own later remarks on reform were far more tepid.

However, Wen gave no new proposals nor a timetable for expanding China's limited village-level elections on Monday, saying it would be a "gradual progress."

Beijing has targeted more balanced, less export-reliant, sustainable development and a fairer distribution of wealth under a new five-year growth plan approved by the rubber-stamp National People's Congress earlier Monday.

It calls for a more moderate seven percent annual economic expansion for 2011-15. The economy grew 10.3 percent in 2010.

China has annually set an eight percent economic growth target -- considered the minimum required to keep the economy growing fast enough to stave off social unrest. The goal is surpassed each year.

But Wen admitted it "will not be easy" maintaining enough growth to create sufficient new jobs while also curbing inflation.

Decades of blistering export-dependent growth have made China's economy a force in the world, but Beijing has struggled to spread the wealth evenly among its 1.3 billion population.

"Over the next five years and for a long period of time to come in the course of China's development, we will make the transformation of China's economic development pattern our priority," Wen said.

He also pledged the government would make greater efforts to spur development of affordable housing.

The urgency of appeasing disgruntled constituencies has come into focus over the past month with mysterious Internet calls for weekly Sunday "strolling" rallies in major Chinese cities.

They have largely fizzled under smothering security and no obvious protest actions have been reported, but the heavy police response revealed official concern over public dissatisfaction.