China lowers its economic growth target a tad

BEIJING (AP) -- China is slightly lowering its annual economic growth target, to 7 percent from 8 percent, the premier said Sunday, in a move that signals a shift in government priorities to put the breakneck economy on a more sustainable footing.

The tweak to the growth rate, announced by Premier Wen Jiabao in an online chat with Chinese citizens, is largely symbolic. Economic growth has exceeded the 8 percent target each of the past six years that it has been a fixture of government plans. Last year, growth reached 10.3 percent, making China the world's fastest-expanding major economy.

Along with the growth, however, inflation has picked up, especially for food and housing. Economists and senior Chinese officials have said for months that Beijing must downshift the economy to help tame prices and move toward growth that is driven more by consumer spending than by the hefty investment and bank lending that fueled the latest spurt.

The questions selected for the premier's well-orchestrated online chat highlighted popular concerns about inflation and home prices -- problems that Wen acknowledged could cause protests if left unchecked.

"Rapid inflation affects people's livelihoods and may affect social stability," Wen said. He later added: "I know the impact that prices can cause a country and am deeply aware of its extreme importance."

Asked about the high rates of growth set by local governments and worries they could worsen environmental degradation, Wen said that the 7 percent target would be embedded in the current five-year plan for 2011-2015 "to raise the quality and efficiency of economic growth."

"We absolutely cannot again sacrifice the environment as the cost for high-speed growth, to have blind development, and in that way to create overcapacity and put greater pressure on the environment and resources," he said. "That economic development is unsustainable."

The premier's two-hour online chat on the government's Xinhua News Agency website came six days before the opening of the national legislature's annual session, during which the largely powerless, Communist Party-controlled body will approve the five-year plan and other policies.

Wen has held the Internet chat on the eve of the National People's Congress for three years. The event is designed to give a more modern cast to the often distant, authoritarian leadership and show its concern for the public. Wen is the leadership's most popular figure. Grandfatherly, polite and solicitous, he is sometimes shown on state television consoling victims of natural disasters and dining with workers and the poor.

In one of the more colorful gripes Wen heard Sunday, a person who identified himself as a worker complained about the local officials who cut off electricity supplies to meet severe targets Beijing issued to save energy. The worker, who used the online name Fengyun Bianhuan, said that in his neighborhood, the cutoff forced people to use flashlights while cooking breakfast.

Wen said that when he learned about such measures, he became angry and ordered local government officials to stop. Some officials were disciplined for their actions, he said.

The premier also struck a sympathetic note on one of China's most divisive social issues: controls that divide the population into rural and urban households and use that classification to deprive rural migrants of urban social services when they move to cities. Wen said rural migrants now number 240 million -- far higher than previous figures.

The migrants and their children "should never be discriminated against in pursuing jobs, receiving compulsory education and training just because they are farmers under the household system," he said.

Several times, Wen underscored that the government's top priority is to raise living standards. He said preserving jobs was the chief reason the government resisted pressure to allow the Chinese currency to rise in value rapidly. The United States and other trading partners have criticized China's currency policies, saying that by keeping the yuan, or renminbi, low in value, Beijing is making Chinese exports cheaper.

Wen said many Chinese exporters are engaged in assembling components into goods and face competition to keep prices low. "If the renminbi appreciates greatly all at once, this will cause many processing enterprises to go bankrupt or out of business. The trade orders will shift to other countries, and many of our workers will lose jobs, especially those migrant workers," he said.