By CHRISTOPHER BODEEN
The Associated Press
Monday, March 5, 2007; 12:36 AM
BEIJING -- Chinese Premier Wen Jiabao on Monday pledged greater support for education and health care over the next year and said the government would tackle sources of social unrest such as environmental problems, land seizures and privatization of state industries.
In a speech at the opening of the national legislature's annual session, Wen also pledged technology upgrading for the country's big but largely outdated armed forces. The comments came a day after the government announced a 17.8 percent increase in its defense budget _ the biggest jump in more than a decade.
He also said China would work with other nations to address global security threats but gave no details.
Wen's budget priorities reflect Beijing's recent focus on shifting spending to education, health care and other social programs that have been neglected while the communist government concentrated on boosting investment and trade.
Wen and other Chinese leaders have promised repeatedly to close a growing gap between China's rich and poor, which they worry threatens political stability and the ruling party's hold on power.
Tuition and other fees for all rural students will be eliminated, easing the financial burden on 150 million rural households, the premier said. He said the government will step up spending on rural primary and middle schools by 21 percent to $29 billion. The government will also create national scholarships and tuition assistance for colleges and vocational schools, he added.
"Education is the bedrock of China's development, and fairness in education is an important form of social fairness," Wen said in the speech at the cavernous Great Hall of the People in central Beijing.
He also pledged more support for health care, especially in rural areas where 90 percent of the population has no health insurance and little access to doctors.
Wen said a trial cooperative medical care system would cover 80 percent of China, with the government more than doubling subsidies to it to $1.31 billion. The plan is aimed at ensuring that rural residents have access to "safe, effective, convenient and reasonably priced medical and health care services," Wen said.
He also promised almost $30.5 billion in increased spending on old age pensions, workers' compensation and other forms of social security.
Addressing protests by farmers and workers over corruption, land seizures and environmental problems, Wen said the government would pay more attention to such concerns and act quickly to address such complaints.
Wen called on banks to not only increase credit to rural areas, but to strictly limit loans to industries that consume large amounts of energy or are highly polluting. He said that highly polluting, small thermal power plants and "backward iron foundries and steel mills" would be shut, and market forces and taxes would be used to save energy and cut pollution in other industries such as cement and aluminum.
Wen also promised to improve China's dismal industrial safety record. Tens of thousands of people are killed in mine and industrial accidents each year in China.
On the military, Wen said the government would speed up the transformation of China's 2.3 million armed forces into a high-tech fighting force.
"We must energetically carry out the transformation from military training based on mechanized warfare to military training ... to increase the troop's ability to fight a defensive IT (information technology) war," he said.
On Sunday, Jiang Enzhu, a spokesman for China's national legislature, said the $44.94 billion defense budget for 2007 would mainly be spent on boosting wages and living allowances for members of the armed forces and on upgrading armaments.
The 2007 budget marks an increase of $6.84 billion over last year and is the third highest jump since 1990, surpassed only by increases of 21 percent in 1995 and 18 percent in 1994.
China's military is the world's largest and has been criticized abroad for not being open about its spending. Unlike the U.S., where Congress is required to approve the military budget, China's military is extremely secretive and rarely releases information on its spending.
The Pentagon believes China's total military spending may be much greater since the announced budget does not include key items such as weapons purchases.
Deputy Secretary of State John Negroponte, who was visiting Beijing on Sunday, urged more dialogue between the Pentagon and the Chinese military "so that we have a bit better understanding of exactly what it is that the government of China has in mind with respect to its military modernization."
China's military spending is largely oriented toward Taiwan, which split with the mainland in 1949 amid civil war and has refused Beijing's offers for peaceful reunification with the mainland.
In his speech Monday, Wen repeated Beijing's opposition to efforts by Taiwan activists to make the island's de facto independence permanent. He said the mainland would promote direct transport and communications links across the Taiwan Strait.
"We firmly believe that with the efforts of all Chinese people, including our Taiwan compatriots, complete reunification of China will definitely be realized," he said.
Taiwan's president, Chen Shui-bian, made unusually strong pro-independence remarks Sunday in a message apparently aimed at provoking rival China and shoring up his base.
"Taiwan should be independent," Chen said at a banquet marking the 25th anniversary of the Formosan Association for Public Affairs, a pro-independence group. "Taiwan is a country whose sovereignty lies outside the People's Republic of China."
Associated Press writers Audra Ang in Beijing and Min Lee in Taipei, Taiwan, contributed to this report.