Identifier
Created
Classification
Origin
04BEIJING3796
2004-03-05 11:33:00
CONFIDENTIAL
Embassy Beijing
Cable title:
WEN JIABAO'S NPC DEBUT: "PEOPLE FIRST," RURAL
P 051133Z MAR 04 FM AMEMBASSY BEIJING TO SECSTATE WASHDC PRIORITY 0190 INFO AMEMBASSY MANILA AMEMBASSY SEOUL AMEMBASSY TOKYO AMCONSUL GUANGZHOU AMCONSUL HONG KONG AMCONSUL SHANGHAI AMCONSUL SHENYANG AMCONSUL ZEN/CHENGDU AIT TAIPEI 8457 DEPT OF TREASURY WASHDC
C O N F I D E N T I A L BEIJING 003796
MANILA FOR USADB
STATE PASS USTR FOR FREEMAN/NEUREITER
TREASURY FOR OASIA/INA - KEIDEL/DUPUY
E.O. 12958: DECL: 03/03/2024
TAGS: PGOV ECON EFIN EAGR ETRD PREL CH TW HK
SUBJECT: WEN JIABAO'S NPC DEBUT: "PEOPLE FIRST," RURAL
ECONOMY AND SUSTAINABLE GROWTH
REF: BEIJING 3731
Classified By: Political Minister Counselor Jon Aloisi.
Reason: 1.4 (b),(d).
Summary
-------
C O N F I D E N T I A L BEIJING 003796
MANILA FOR USADB
STATE PASS USTR FOR FREEMAN/NEUREITER
TREASURY FOR OASIA/INA - KEIDEL/DUPUY
E.O. 12958: DECL: 03/03/2024
TAGS: PGOV ECON EFIN EAGR ETRD PREL CH TW HK
SUBJECT: WEN JIABAO'S NPC DEBUT: "PEOPLE FIRST," RURAL
ECONOMY AND SUSTAINABLE GROWTH
REF: BEIJING 3731
Classified By: Political Minister Counselor Jon Aloisi.
Reason: 1.4 (b),(d).
Summary
--------------
1. (C) Premier Wen Jiabao reiterated the "people-
centered" approach of the new Chinese leadership in
his report to China's legislature, the National
People's Congress, on March 5. With former President
Jiang Zemin and the current leadership looking on, Wen
highlighted the new government's victory over SARS,
effectively underscoring the contrast of its approach
with that of previous regimes. Wen reaffirmed the
government's seriousness in focusing on rural
development, social investment and good governance,
while at the same time continuing economic
restructuring and maintaining GDP growth at seven
percent. Wen glossed over references to political
restructuring, the Three Represents and military
modernization, but drew prolonged applause from the
audience for comments on planned elimination of
agricultural taxes and hopes for Taiwan's early
reunification with the "motherland." End Summary.
NPC Stages Its Annual Opening Ceremony
--------------
2. (C) China's legislature, the National People's
Congress, which is technically China's highest organ
of government, staged its annual opening at the Great
Hall of the People on March 5. While largely
ceremonial, this year's NPC session gives China's new
leaders an opportunity to further define their vision
and agenda. The 2,904 people's deputies, many hailing
from China's distant provinces and some dressed in
elaborate minority costumes, packed the main floor of
the hall, along with a sizable People's Liberation
Army (PLA) delegation. CPPCC members joined
journalists, diplomats and the PLA band in watching
the proceedings from the upper decks.
3. (C) Protocol arrangements for the top leadership
mirrored those for the CPPCC opening two days earlier.
President Hu Jintao sat in the center seat, but walked
in briskly behind a modestly shuffling Jiang Zemin.
While Hu seemed alert and at ease, Jiang kept his head
down for most of the session, even while the camera
was trained on him. The main event at the NPC
opening, per tradition, was the delivery of the
Government Work Report by Premier Wen Jiabao.
Wen's Debut Work Report Sets a New Tone
--------------
4. (C) Wen's debut report retained the traditional
format of reviewing achievements, acknowledging
problems and outlining plans for the coming year. The
speech broke no new ground, reiterating
accomplishments and policies previewedat last fall's
Party plenum and subsequent wok conferences. In
keeping with the government's new development concept,
however, this year's report devoted more attention to
social and rural concerns and inefficient and corrupt
government.
5. (C) Wen played to the crowd, raising his voice
when discussing points he wanted to emphasize (anti-
corruption, rural problems and Taiwan),and was
rewarded several times with enthusiastic applause. In
contrast to the Three Represents-laden report by CPPCC
Chair Jia Qinglin on March 3 (reftel),Wen's remarks
glossed over the pro forma mentions of Jiang's
theoretical contribution in favor of a more pragmatic
tone.
Beating SARS Trumps Growth in List of Achievements
-------------- --------------
6. (C) In touting the new government's achievements,
Premier Wen juxtaposed China's victory over SARS with
its strong overall economic performance in 2003 to
underscore that the new leadership has shown that it
can manage tough problems successfully. His focus on
the current government's determination to act "in
consideration of the people's vital interests."
7. (C) Wen went on to flag China's 9.1 percent GDP
growth rate, attainment of the benchmark USD 1,000
per-capita GDP level, and China's arrival as the
world's fourth largest trading nation as hallmarks of
China's and the new leadership's strong showing. He
also called attention to China's implementation of its
WTO commitments, including cutting import tariffs and
opening China's market further to foreign service
providers, its welcoming attitude to foreign
investment, and its determination to maintain a stable
exchange rate for the RMB. The launch of the
Shenzhou-5 space capsule, which was highly publicized
late last year, was mentioned only in passing.
People-Centered Policies
--------------
8. (C) As expected, Wen used his speech to emphasize
the "people-centered" approach (yi ren wei ben) of the
new government. He noted efforts over the past year
to improve the public health system, rural education
and the administration of social security. Progress
in job creation and measures to assist vagrants and
beggars (e.g., the elimination of the custody and
repatriation system) also garnered specific mention.
9. (C) Before setting out work goals for 2004, Wen
highlighted critical policy problems facing the
leadership. He cited slow growth of rural incomes,
lack of an effective social security system, job
creation, and unbalanced development as the most
serious concerns. A second set of problems associated
with China's rapid but distorted approach to economic
growth included environmental degradation, excessive
and wasteful investment (especially in construction),
illegal appropriation of farm land, declining grain
production and the high cost of education and medical
treatment.
10. (C) Wen reserved his harshest words for "some
government officials," who are "subjective,
formalistic, wasteful, extravagant, fraudulent, and
even corrupt," noting that the government faces an
arduous task in fighting corruption. (Note:
Interestingly, Wen's energetic presentation failed to
elicit even a murmur of applause from the audience of
officials.) In summing up, Wen said the government
should face "new tests" with a "new outlook" and "new
work style" and "must not fail to live up to the
expectations of the people."
Looking Ahead: Balanced Development
--------------
11. (C) In 2004, consistent with a scientific
economic development approach (kexue fazhan guan),Wen
noted that the government will attempt to improve
macroeconomic management, reduce economic imbalances
and address those problems that affect the concrete
interests of the people. He envisioned stable
economic growth at seven percent, a pace that the
leadership considers consistent with efficient and
sustainable growth. This, he said, will require
forward thinking micro policy adjustments, which will
enable China to maintain appropriately tight or loose
policy stances without having to resort to "stepping
on the brakes". Contrary to an asserted intent for
the government to rely on market based management
tools and legal strictures, Wen threatened to use
administrative measures when necessary to block
unwanted investments through the use of central
approval authority and across the board bans on
rezoning of land or loans to "unapproved" investment
projects.
Dealing with Rural Problems
--------------
12. (C) Wen reiterated the central government's
position that dealing with rural problems is its first
priority. The government will do this through direct
measures that will strengthen, support and protect the
rural sector with the goal of raising rural incomes.
Aside from strengthening efforts to prevent illegal
expropriation of farm land, Wen said the government
will support grain production in core grain growing
regions, eliminate the specialized agricultural
products tax and cut the general agricultural tax one
percentage point per year, eliminating it completely
by 2007 and increasing central government fiscal
transfers to rural areas. The grain market will be
totally market based in 2004, Wen said, and the
government will provide RMB 10 billion in direct
subsidies to gain farmers.
Unequal Funding for Regional Development
--------------
13. (C) Wen called for more balanced regional
economic development, while noting that some regions
obviously will do better than others. While all
regions are encouraged to develop, he cautioned the
western areas to continue implementing environmentally
friendly policies that will cut back on logging,
farming, and cattle raising, all to the detriment of
rural incomes. Some funding, however, will be made
available to improve basic education in these areas.
Central Chinese provinces are likewise given verbal
encouragement, but no promises of funding support.
What support these two regions will receive will come
from informal transfers or investments from "sister"
eastern provinces. Central Government fiscal support
in the coming year will be very focused on the
Northeast, where many SOE restructuring projects will
be funded, Wen indicated.
Democratization Paired with Stability Concerns
-------------- -
14. (C) Far down the list of priorities for the
coming year were political restructuring, public
security and safety and defense modernization. While
Wen mentioned improving the legal system and
"expanding democracy at the lowest levels of
government," the topic was given fairly short shrift.
Priority areas for new legislation were listed as
emergency management, rights of farmers, and social
security issues. Wen alluded several times during the
report to the need to handle "challenges to internal
stability" and mentioned anti-terrorism and anti-cult
efforts on the part of the security forces. He also
touched on military modernization, noting the need to
improve effectiveness of defense modernization efforts
and balance defense needs with economic growth.
Improved Governance and Anti-Corruption
--------------
15. (C) After already speaking for 90 minutes, Wen
adopted a more aggressive, lecturing tone for a
section on improving governance. Advocating
scientific and democratic decision-making,
transparency and strict adherence to the law, Wen also
spoke of the need for oversight of government by the
media and general public. In keeping with recently
published Party discipline guidelines, he condemned
"vanity projects," wastefulness, false reporting,
arrogance and other common sins of Chinese cadres.
Crowd Reacts to Taiwan Remarks
--------------
16. (C) Wen's closing remarks included standard
comments on upholding the principles governing the
administration of Hong Kong and Macau, calling for
strict observance of the Basic Law and support for SAR
chief executives and governments. His subsequent,
well-worn slogans regarding Taiwan and hopes for quick
reunification were greeted by prolonged applause from
the delegates.
Comment
--------------
17. (C) Wen's speech contained no surprises. His
report continues the public promotion and emphasis of
the new government's shift in priorities and its
people-centered image. While the document lays down a
clear marker on commitment to reform, it also hints at
continuing controversy over policy direction and
vision in a number of areas. For example, after
strongly advocating use of market-based mechanisms for
economic policy adjustments, Wen retreats by noting
the government's willingness to rely on administrative
measures that recall old-style planned economy
approaches. This points up the ongoing compromises
that characterize the process of China's economic
transition. As a political document, Wen's report
indirectly highlights the distinctions between the new
leadership and the past administration. In contrast
to Jia Qinglin's CPPCC opening presentation, the
obsequious overemphasis on Jiang Zemin's Three
Represents was noticeably lacking.
RANDT
MANILA FOR USADB
STATE PASS USTR FOR FREEMAN/NEUREITER
TREASURY FOR OASIA/INA - KEIDEL/DUPUY
E.O. 12958: DECL: 03/03/2024
TAGS: PGOV ECON EFIN EAGR ETRD PREL CH TW HK
SUBJECT: WEN JIABAO'S NPC DEBUT: "PEOPLE FIRST," RURAL
ECONOMY AND SUSTAINABLE GROWTH
REF: BEIJING 3731
Classified By: Political Minister Counselor Jon Aloisi.
Reason: 1.4 (b),(d).
Summary
--------------
1. (C) Premier Wen Jiabao reiterated the "people-
centered" approach of the new Chinese leadership in
his report to China's legislature, the National
People's Congress, on March 5. With former President
Jiang Zemin and the current leadership looking on, Wen
highlighted the new government's victory over SARS,
effectively underscoring the contrast of its approach
with that of previous regimes. Wen reaffirmed the
government's seriousness in focusing on rural
development, social investment and good governance,
while at the same time continuing economic
restructuring and maintaining GDP growth at seven
percent. Wen glossed over references to political
restructuring, the Three Represents and military
modernization, but drew prolonged applause from the
audience for comments on planned elimination of
agricultural taxes and hopes for Taiwan's early
reunification with the "motherland." End Summary.
NPC Stages Its Annual Opening Ceremony
--------------
2. (C) China's legislature, the National People's
Congress, which is technically China's highest organ
of government, staged its annual opening at the Great
Hall of the People on March 5. While largely
ceremonial, this year's NPC session gives China's new
leaders an opportunity to further define their vision
and agenda. The 2,904 people's deputies, many hailing
from China's distant provinces and some dressed in
elaborate minority costumes, packed the main floor of
the hall, along with a sizable People's Liberation
Army (PLA) delegation. CPPCC members joined
journalists, diplomats and the PLA band in watching
the proceedings from the upper decks.
3. (C) Protocol arrangements for the top leadership
mirrored those for the CPPCC opening two days earlier.
President Hu Jintao sat in the center seat, but walked
in briskly behind a modestly shuffling Jiang Zemin.
While Hu seemed alert and at ease, Jiang kept his head
down for most of the session, even while the camera
was trained on him. The main event at the NPC
opening, per tradition, was the delivery of the
Government Work Report by Premier Wen Jiabao.
Wen's Debut Work Report Sets a New Tone
--------------
4. (C) Wen's debut report retained the traditional
format of reviewing achievements, acknowledging
problems and outlining plans for the coming year. The
speech broke no new ground, reiterating
accomplishments and policies previewedat last fall's
Party plenum and subsequent wok conferences. In
keeping with the government's new development concept,
however, this year's report devoted more attention to
social and rural concerns and inefficient and corrupt
government.
5. (C) Wen played to the crowd, raising his voice
when discussing points he wanted to emphasize (anti-
corruption, rural problems and Taiwan),and was
rewarded several times with enthusiastic applause. In
contrast to the Three Represents-laden report by CPPCC
Chair Jia Qinglin on March 3 (reftel),Wen's remarks
glossed over the pro forma mentions of Jiang's
theoretical contribution in favor of a more pragmatic
tone.
Beating SARS Trumps Growth in List of Achievements
-------------- --------------
6. (C) In touting the new government's achievements,
Premier Wen juxtaposed China's victory over SARS with
its strong overall economic performance in 2003 to
underscore that the new leadership has shown that it
can manage tough problems successfully. His focus on
the current government's determination to act "in
consideration of the people's vital interests."
7. (C) Wen went on to flag China's 9.1 percent GDP
growth rate, attainment of the benchmark USD 1,000
per-capita GDP level, and China's arrival as the
world's fourth largest trading nation as hallmarks of
China's and the new leadership's strong showing. He
also called attention to China's implementation of its
WTO commitments, including cutting import tariffs and
opening China's market further to foreign service
providers, its welcoming attitude to foreign
investment, and its determination to maintain a stable
exchange rate for the RMB. The launch of the
Shenzhou-5 space capsule, which was highly publicized
late last year, was mentioned only in passing.
People-Centered Policies
--------------
8. (C) As expected, Wen used his speech to emphasize
the "people-centered" approach (yi ren wei ben) of the
new government. He noted efforts over the past year
to improve the public health system, rural education
and the administration of social security. Progress
in job creation and measures to assist vagrants and
beggars (e.g., the elimination of the custody and
repatriation system) also garnered specific mention.
9. (C) Before setting out work goals for 2004, Wen
highlighted critical policy problems facing the
leadership. He cited slow growth of rural incomes,
lack of an effective social security system, job
creation, and unbalanced development as the most
serious concerns. A second set of problems associated
with China's rapid but distorted approach to economic
growth included environmental degradation, excessive
and wasteful investment (especially in construction),
illegal appropriation of farm land, declining grain
production and the high cost of education and medical
treatment.
10. (C) Wen reserved his harshest words for "some
government officials," who are "subjective,
formalistic, wasteful, extravagant, fraudulent, and
even corrupt," noting that the government faces an
arduous task in fighting corruption. (Note:
Interestingly, Wen's energetic presentation failed to
elicit even a murmur of applause from the audience of
officials.) In summing up, Wen said the government
should face "new tests" with a "new outlook" and "new
work style" and "must not fail to live up to the
expectations of the people."
Looking Ahead: Balanced Development
--------------
11. (C) In 2004, consistent with a scientific
economic development approach (kexue fazhan guan),Wen
noted that the government will attempt to improve
macroeconomic management, reduce economic imbalances
and address those problems that affect the concrete
interests of the people. He envisioned stable
economic growth at seven percent, a pace that the
leadership considers consistent with efficient and
sustainable growth. This, he said, will require
forward thinking micro policy adjustments, which will
enable China to maintain appropriately tight or loose
policy stances without having to resort to "stepping
on the brakes". Contrary to an asserted intent for
the government to rely on market based management
tools and legal strictures, Wen threatened to use
administrative measures when necessary to block
unwanted investments through the use of central
approval authority and across the board bans on
rezoning of land or loans to "unapproved" investment
projects.
Dealing with Rural Problems
--------------
12. (C) Wen reiterated the central government's
position that dealing with rural problems is its first
priority. The government will do this through direct
measures that will strengthen, support and protect the
rural sector with the goal of raising rural incomes.
Aside from strengthening efforts to prevent illegal
expropriation of farm land, Wen said the government
will support grain production in core grain growing
regions, eliminate the specialized agricultural
products tax and cut the general agricultural tax one
percentage point per year, eliminating it completely
by 2007 and increasing central government fiscal
transfers to rural areas. The grain market will be
totally market based in 2004, Wen said, and the
government will provide RMB 10 billion in direct
subsidies to gain farmers.
Unequal Funding for Regional Development
--------------
13. (C) Wen called for more balanced regional
economic development, while noting that some regions
obviously will do better than others. While all
regions are encouraged to develop, he cautioned the
western areas to continue implementing environmentally
friendly policies that will cut back on logging,
farming, and cattle raising, all to the detriment of
rural incomes. Some funding, however, will be made
available to improve basic education in these areas.
Central Chinese provinces are likewise given verbal
encouragement, but no promises of funding support.
What support these two regions will receive will come
from informal transfers or investments from "sister"
eastern provinces. Central Government fiscal support
in the coming year will be very focused on the
Northeast, where many SOE restructuring projects will
be funded, Wen indicated.
Democratization Paired with Stability Concerns
-------------- -
14. (C) Far down the list of priorities for the
coming year were political restructuring, public
security and safety and defense modernization. While
Wen mentioned improving the legal system and
"expanding democracy at the lowest levels of
government," the topic was given fairly short shrift.
Priority areas for new legislation were listed as
emergency management, rights of farmers, and social
security issues. Wen alluded several times during the
report to the need to handle "challenges to internal
stability" and mentioned anti-terrorism and anti-cult
efforts on the part of the security forces. He also
touched on military modernization, noting the need to
improve effectiveness of defense modernization efforts
and balance defense needs with economic growth.
Improved Governance and Anti-Corruption
--------------
15. (C) After already speaking for 90 minutes, Wen
adopted a more aggressive, lecturing tone for a
section on improving governance. Advocating
scientific and democratic decision-making,
transparency and strict adherence to the law, Wen also
spoke of the need for oversight of government by the
media and general public. In keeping with recently
published Party discipline guidelines, he condemned
"vanity projects," wastefulness, false reporting,
arrogance and other common sins of Chinese cadres.
Crowd Reacts to Taiwan Remarks
--------------
16. (C) Wen's closing remarks included standard
comments on upholding the principles governing the
administration of Hong Kong and Macau, calling for
strict observance of the Basic Law and support for SAR
chief executives and governments. His subsequent,
well-worn slogans regarding Taiwan and hopes for quick
reunification were greeted by prolonged applause from
the delegates.
Comment
--------------
17. (C) Wen's speech contained no surprises. His
report continues the public promotion and emphasis of
the new government's shift in priorities and its
people-centered image. While the document lays down a
clear marker on commitment to reform, it also hints at
continuing controversy over policy direction and
vision in a number of areas. For example, after
strongly advocating use of market-based mechanisms for
economic policy adjustments, Wen retreats by noting
the government's willingness to rely on administrative
measures that recall old-style planned economy
approaches. This points up the ongoing compromises
that characterize the process of China's economic
transition. As a political document, Wen's report
indirectly highlights the distinctions between the new
leadership and the past administration. In contrast
to Jia Qinglin's CPPCC opening presentation, the
obsequious overemphasis on Jiang Zemin's Three
Represents was noticeably lacking.
RANDT