Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

China's Premier Wen Jiabao (shown on screen) speaks as delegates listen during the opening ceremony of National People's Congress (NPC) at the Great Hall of the People in Beijing, March 5, 2013.

JASON LEE/Reuters

In his final speech to his country's representatives, outgoing Chinese premier Wen Jiabao has given no benedictions nor made final demands other than more of the same: to urge his compatriots to build a "moderately prosperous society" in the world's second-largest economy.

Mr. Wen's dry, 100-minute address to the National People's Congress, the annual meeting of the country's rubber-stamp parliamentary body, left even the stock markets largely unmoved, the Hong Kong and Shanghai indices edging upward after days of losses.

The country plans to boost spending to reach a 7.5 per cent GDP growth target this year, will raise China's fiscal deficit to about 2 per cent of GDP or 1.2 trillion yuan ($192.8-billion), and limit inflation to around 3.5 per cent, down from last year's 4 per cent. Among the other goals are opening 5,200 km in new railways, according to the National Development and Reform Commission, and expanding local governments' bond issues to 350 billion yuan in 2013, up from 250 billion last year, despite growing concern about bad debt.

Story continues below advertisement

Mr. Wen also said the government should build consumer spending as a means of growth and promised to strengthen "adjustments" to the property market, suggesting restrictions on buying homes in major cities – designed to keep prices from spiraling – are likely to continue. He said the government will finish 4.7 million units of affordable housing this year and start another 6.3 million units.

"In the current stage, the role investment plays in promoting economic growth cannot be underestimated," he told the congress of nearly 3,000 delegates, adding that controls for private investment should be relaxed.

"There are relatively big inflationary pressures this year, mainly because there are pressures on China's land, labour, agricultural products and services. And major countries are stepping up loose monetary policy, so we can't overlook imported inflationary pressures," he said.

Maintaining economic and social stability is paramount for the transitioning leadership. Incoming president Xi Jinping is to have his position confirmed during the 13-day assembly while Mr. Wen will be succeeded by Li Keqiang, an English speaker who is already a familiar face to Western diplomats.

"Sustaining growth recovery will be the new leadership's top priority, to be achieved via the continuation of relatively accommodative policy. Inflationary pressures should remain manageable given the modest pace of recovery. Reforms in fiscal and financial areas, as well as further deregulation in private sectors will be sped up," wrote economists Qu Hongbin and Sun Junwei at HSBC.

What's not yet clear is the fate of the country's state-owned enterprises. Powerful but heavily bureaucratic, the government has long pledged to reform SOE-dominated industries to make them more competitive, and reforms are expected under the new administration of incoming president Xi Jinping. But how deep reforms can go given the companies' political connections remains in question.

Still, despite Mr. Wen's dry sendoff, there are hopes that the incoming leadership team will continue efforts to appear fresh and new.

Story continues below advertisement

"The new leadership has tried to give at least the impression of fresh energy since taking over the key posts in the Party late last year – for example through calls for greater frugality and an anticorruption campaign. Accordingly, while wholesale policy changes are unlikely, the leadership may want to flesh out more of the details of their priorities in order to maintain the positive momentum of the last three months," wrote Mark Williams and Wang Qinwei at Capital Economics of what to expect from the Congress.

Later this week the country will also release key numbers for inflation and trade in January and February, combining the two to help compensate for seasonal distortions from Chinese New Year, which fell in late January last year and mid-February this year.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies