Chinese premier Wen Jiabao pledges more support for education, health care

(AP) Chinese Premier Wen Jiabao on Monday pledged hefty spending increases on education and other key concerns for ordinary Chinese as top leaders move toward renewing their mandate at a Communist Party congress later this year.

Yet, appealing to core nationalist sentiments, Wen also promised the sprawling but largely backward military a technological upgrade and said China would resist efforts by self-governing Taiwan to formalize its independence from the mainland.

"We must put people first, promote faster progress in social programs, work energetically to solve the most practical problems that are of greatest concern to the people ... and ensure that all of the people share in the fruits of reform and development," Wen said in a speech to China's legislature, the National People's Congress.

The annual 12-day session offers a rare opportunity for leaders to meet with nearly 3,000 delegates drawn from around the country who this year are expected to approve a toughly contested property rights bill and less controversial corporate tax bill.

This year's session comes just months ahead of the party's expected year-end 17th congress, at which Wen and president and party leader Hu Jintao are expected to entrench their five-year rule by appointing allies to top posts.

While the two face no electoral tests, China's authoritarian communist system is based on obtaining broad consensus and Hu and Wen have focussed on fundamental issues that were long-neglected while the government pushed for speedy growth in the economy and trade.

In 2007 budget plans unveiled to the legislature, Wen called for spending increases of 42 percent in education, 87 percent for medical care, 15 percent for rural areas and 14 percent for social security.

Tuition and other fees for all rural students will be eliminated, easing financial burdens on 150 million rural households, the premier said. The education program and an expansion of a subsidized rural health insurance system would complete in two years projects originally scheduled to be fazed in over five years.

"Education is the bedrock of China's development, and fairness in education is an important form of social fairness," Wen said in a 2 hour and 15 minute speech at the cavernous Great Hall of the People in central Beijing

Total spending by the central government is scheduled to rise 14.4 percent to $335 billion, according to a budget outline released by the Finance Ministry. It projected an annual deficit of $31 billion, nearly 17 percent less than 2006 due to robust tax revenue collections.

Wen announced the government's usual, low economic growth target of 8 percent, well below last year's rate of 10.7 percent, the fourth straight year of double-digit growth.

In the countryside, where most Chinese live, spending on agriculture, schools, medical clinics and other programs will rise 15 percent to $51 billion, Wen announced.

Another $27 billion is earmarked for a "social safety net" to protect China's elderly and migrant workers, according to a National Development and Reform Commission report distributed along with Wen's speech. It said that will include old-age pensions, experimental pension accounts and basic medical and other social insurance.

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.

"We're very happy because we're finally seeing some breakthroughs in rural education and that's going to have a major effect on improving fairness in society," said delegate Sun Pengjun, a teacher representing the northeastern province of Jilin.

Wen's speech dwelled on China's fouled rivers and polluted air, called on banks to limit lending to energy-guzzling and highly polluting industries and said small coal-burning plants and "backward iron foundries and steel mills" would be shut.

However, Wen drew his biggest applause when renewing Beijing's pledge not to tolerate any moves by Taiwan toward formal independence, a reminder of the key importance for Chinese leaders not to be seen as soft on issues of national sovereignty.

Wen's comments come a day after Taiwanese President Chen Shui-bian told a pro-independence group that "Taiwan should be independent. Taiwan is a country whose sovereignty lies outside the People's Republic of China."

"We firmly believe that with the efforts of all Chinese people, including our Taiwan compatriots, complete reunification of China will definitely be realized," Wen said, receiving sustained applause from delegates.

Wen also said the government would speed up the transformation of China's 2.3 million armed forces into a high-tech fighting force.

On Sunday, China announced it will boost military spending by 17.8 percent in 2007 to $44.94 billion, the biggest jump in more than a decade.