News & Reports 2011-03-06

Hello and Welcome to News and Reports on China Radio International.

In This Edition

Premier Wen Jiabao delivers government work report to China's National People's Congress, stressing improving people's well being as top government priority.

China's National political advisors suggest putting the country's economy on a more sustainable footing will help people feel happier.

Former Egyptian Interior Minister Habib el-Adly goes on trial in Cairo, facing allegations of corruption and money laundering.

The former United Nations secretary-general Kofi Annan launches a new commission to promote free and fair elections around the world.

Hot Issue Reports

Premier Wen Pledges to Narrow Income Gap

The year 2011 marks the beginning of China's 12th five-year plan, a government initiative to review the national economic and social development and set up new objectives in a five-year cycle. As the country's wealth gap widens in recent years and rises up as a critical concern amid its rapid economic growth, Chinese Premier Wen Jiabao has attached more significance to improving people's well being and readjusting income distribution in the new half-decade blueprint.

CRI's Zhao Kun reports at the Great Hall of the People.

Reporter: At the annual top legistaure session in Beijing, Premier Wen Jiabao reiterated the importance of achieving social equality and demonstrates the government's confidence in balancing the income distribution.

"We will quickly establish a system for monitoring income distribution. Through unremitting efforts, we will reverse the trend of a widening income gap as soon as possible and ensure that the people share more in the fruits of reform and development."

Wen Jiabao makes such remarks as the world keeps a close eye on how the world's second largest economy will deal with its growing wealth gap and alarming inflation rate.

According to the latest statistics, China's Gini coefficient, a measure of income inequality, is approaching 0.5, from less than 0.325 just years ago. The measure ranges from 0 to 1, and the 0.4 is considered by many economists as the predictor for social instability.

Determined to shrink China's wealth gap, Wen Jiabao promises in his government work report that a string of measures will be taken in 2011.

"We will focus on increasing the basic incomes of low-income people in both urban and rural areas. We will steadily increase the minimum wage of workers, basic pensions of enterprise retirees, and subsistence allowances for both urban and rural residents. We will establish a sound mechanism of regular pay raises for workers and strictly enforce the minimum wage system."

The premier also says the government will put more effort into raising the individual income tax threshold on salaries and reducing the tax burden on low- and middle-income people.

Patrick Chovanec is associate professor of economics and management at Tsinghua University. The expert on Chinese economy is also in favor of tax adjustment on reducing the income disparity. But at the same time, he stresses that the taxation on high-income earners should be strictly enforced and regulated.

"In the United States, the top 10% of income earners account for about 60 percent of the income tax revenue. In China, lower or middle income earners account for about two thirds of the revenue. The difference isn't in the tax rate. China actually has a higher marginal tax rate than the United States for high-income earners. The gap is actually due to the fact that you have all this undisclosed income that people don't pay taxes on."

Professor Chovanec adds that, when talking about the inclusive growth, a lot of people are concerned about income inequality and they focus exclusively on wealth or income inequality. He believes what really upsets people, not only in China but all around the world, is not inequality of wealth but inequality of privileges, chances and inside tracks. He notes that to further achieve social fairness as a whole is what it takes to go far in life.

For CRI, I'm Zhao Kun.

President Hu Joins Panel Discussion with Deputies from Jiangsu, Stresses Scientific Development

Chinese President Hu Jintao said he fully agreed with the government work report delivered by Premier Wen Jiabao, which focused on seeking development in a scientific way.

The President said China should accelerate the transformation of economic development pattern while cultivating new strategic edge to serve the country's long-term development.

He made the remarks while joining in a panel discussion with deputies from Jiangsu Province during the ongoing National People's Congress session.

A dozen deputies voiced their concerns on the protection of migrant workers' rights and interests, the improvement of social management, and issues of agricultural development.

President Hu Jintao echoed their views and paid tribute to the hundreds of millions of migrant workers for their contribution to China's economic and social development.

"It is the hard work of millions of migrant workers that contributes to the success of our country's reform and opening up and modernization. We must focus on providing occupational training to enhance their working skills. And we need to take into consideration their needs at job seeking, social security, health care, their kid's schooling, so as to protect their interest with an advanced system."

The President also stressed the necessity to improve people's well-being by improving the social management in a more scientific way.

"We must improve community service and management to enhance innovation in social management. Why do we need to improve our community service first? At community-level management is conducted through service. Only when we try our best to serve the people, can we earn the trust and support from them."

Moreover, Hu Jintao said the country should make sure that modernization in agriculture keeps pace with rapid industrialization and urbanization.

Delegates Weigh in about Wen's Speech

Delegates from all over China attending the National People's Congress who listened to Premier Wen Jiabao's government work report said they were hopeful the government's policies would produce good results for the country.

Lu Xinping, an NPC deputy from northern Ningxia Hui Autonomous Region, says he hopes the government's focus on the improvement of people's livelihood will pay off so that ordinary people will genuinely benefit from the fruit of China's reform and opening up that's been going on for over three decades.

"The government has laid down a series of measures to tackle the issues that people are concerned about the most, such as medical care, education, housing, prices, food safety and income distribution. Therefore, I believe people will live a better life because of these measures."

Dai Zhongchuan, delegate from coastal Fujian Province, agrees, saying a proper distribution of income is very important.

"The key issue is how to adjust the structure of income allocation so the incomes of people who make medium or low wages can increase rapidly and, in this way, promote the transformation of our economic structure."

Lower GDP Rate Means More Happiness?

In China's big cities nowadays, both middle- and low-income earners find they are blocked from buying an apartment, either by restrictions for non-local residents or by high prices. In fact – it's not just about housing issue - it seems more Chinese people now feel less happy than before, though they are becoming wealthier.

As Su Yi reports, people's well being is a popular topic in the ongoing political sessions. National advisors suggest putting the country's economy on a more sustainable footing will help people feel happier.

Reporter: Liuliqiao, a main road juncture in western Beijing, has been much busier in the rush hours after the holiday season this year.

Many migrant workers who cannot afford renting a room in the center of the city anymore have to join the long commute with the locals who have been relocated to suburban government housing.

Local governments are now being pushed to build at least ten million affordable apartments this year to house the exploding population in big cities.

Mayor of Chongqing, Huang Qifan, says the government houses of his city will be enough for two million people in the next three years, which is able to cover more than one third of total population. So far, it covers less than five percent.

Many governors, like Liu Ping, the Deputy Governor of Yunnan Province, says they feel the pressure. But Liu says they have been given the green light to raise money in what he says is "a flexible way".

Zhang Hongming, real-estate expert and also member of the country's top political advisory body, suggests more "non-traditional" ways could be used to solve the financial problem.

Housing official Zhang Xueqin reveals that the central government will use government bonds to support local budgets. He also promises the private investors of public rental houses will get tax incentives.

National advisor Zhang Hongming says top policymakers are aware that the growth which relies too much on selling land and booming property markets is not sustainable.

Chinese Premier Wen Jiabao recently lowered the country's GDP growth target in the next five years to seven percent from eight.

Another national advisor, Jing Tiankui, says it signals a shift in government priorities from GDP frenzy to people's happiness, which he believes is the essence of growth.

Macro-economist Yuan Gangming from Tsinghua University points out, in general, the country is focusing on changing wealth distribution, which he says comes only after the economy is already healthy and stable enough.

For CRI, I'm Su Yi.

Former Egyptian Interior Minister Goes on Trial

The former Egyptian Interior Minister Habib el-Adly has gone on trial in Cairo, facing allegations of corruption and money laundering.
El-Adly denied the allegations, saying "It didn't happen."

He was arrested last week along with other three former ministers - all were under investigation for corruption and had previously been banned from traveling abroad. Their assets were also frozen.

There was heavy security around the court house. But protesters rallied, demanding "Execution" and "Revenge."

Wael Al Abrashi is a prominent opposition leader and a journalist.

"No one expected that former Interior Minister Habib el-Adly would be behind bars or inside a court room. This make us feel better and it would definitely calm the people's anger and also would make them trust the military council."

El-Adly has been accused of ordering the deadly shooting by riot police against demonstrators in massive protests that began in January, forcing President Hosni Mubarak to step down on February 11.

He had been in charge of the security forces and the prisons for 12 years before the uprising that ousted the Mubarak regime.

Kofi Annan Launches New Commission to Promote Fair Elections

The former United Nations secretary-general Kofi Annan has launched a new commission to promote free and fair elections around the world.

Annan launched the Global Commission for Elections, Democracy and Security in Pretoria, South Africa against a backdrop of pro-democracy demonstrations across the Middle East and ahead of elections in nearly 20 African countries this year.

The new commission will be made up of twelve prominent personalities from around the world, including former Mexican President Ernesto Zedillo, former Finnish President Marti Ahtisaari, former U.S. Secretary of State Madeleine Albright and former Botswana President Festus Mogae.

They will be tasked with boosting the international commitment to free and fair elections around the world, improving election monitoring and reducing election-related violence.

In Zimbabwe, President Robert Mugabe wants to hold elections later this year amid reports of intimidation and harassment to members of the opposition party MDC. Annan said the country was just not ready to go to the polls.

"We should ensure that all preparations and legal instruments are in place, observers are available and political parties have got some time to organize themselves without intimidation, without fear to prepare for those elections. When those things are done, then the timing is right for elections."

The commission will be making recommendations to governments, regional and international organizations on how to enhance the integrity of electoral practices.

It is expected to conclude its work by the end of 2012.

Will Chinese People Earn More in the Next Five Years?

Three decades ago, senior Chinese leader, Deng Xiaoping asked the government to permit some citizens get well off earlier than others while the country pushed ahead with its modernization drive. Today, China is to let the others catch up. The country's latest five-year plan for 2011 to 2015 aims to shift from rapid economic growth to higher quality and more sustainable development. One of the main tasks is to raise people's incomes. Zhang Ru has more.

Reporter: Data from China's National Bureau of Statistics shows that last year the growth rate of Chinese rural residents' income surpassed that of urban residents' income for the first time since 1998.

Shen Jihui is a farmer from Northeast China's Hei Longjiang Province. Last year, the total income of his family increased by more than 40 percent from the year before.

"As a farmer, if my income increases, I can spend more in improving my livelihood. I am engaged in aquaculture. I want to expand my production this year to further increase my income."

Although many local governments have increased the minimum wage and pensions last year, the rising prices still created discontent.

"The prices have increased several times a year while income only increased once a year. How can we live a better life?"

"Now the prices of meat and eggs are higher than before."

China's latest five-year plan seeks to lower annual economic gorwth while increasing the labors' income. Many local governments are planning to double their people's income in the next five years.

But, the public fears that the move would widen the income gap between the rich and the poor.

Cai Jiming, professor of economics at Tsinghua University, says the government should focus on raising the income of the low and middle income groups.

"I suggest government include indexes reflecting income distribution in the latest five-year plan. The indexes should be used as a criterion for local governments' performance."

Cai says, the Gini coefficient, a commonly-used measure of inequality of wealth, is close to 0.5 in China, overtaking the recognized warning level of 0.4.

"One of the targets is to lower the Gini coefficient to 0.45 by income redistribution, including adjusting income tax, inheritance tax and gift tax. Plus, government should narrow the income gap between employees from monopoly enterprises and other enterprises. Now, the average income of employees from industry monopolies is five times or even more than that of those from non-monopoly enterprises."

Chi Fulin, head of China (Hainan) Reform and Development Research Institute, elaborates on how to increase the income of those from low and middle income groups.

"First the government should raise the minimum wage. Second it should promote the development of the national collective bargaining system to ensure employers rights. Third, the government should create a good environment for enterprises to gain more profits so as to lay a solid foundation to raise their employers' income."

In the next five years, China will shift its focus from the export-led sectors to increasing domestic consumer demand.

Chi applauds the decision.

"The public's consumption ability plays an important role in driving economic growth. There is a huge potential consumption market among China's 700 million rural residents. If China can fully tap into this market in the next 10 years, the total consumption of Chinese farmers may equal that of one or even more European countries."

The expert adds one of the measures to mitigate the income gap is to create same opportunities for rural residents as their urban counterparts.

For CRI, I am Zhang Ru.

New Housing Mandate, Latest Effort to Cool Down China's Property Market

Premier Wen Jiabao announceed government will work to build 36 million affordable homes in five years in an effort to cool the country's property market.

An editorial in the China Daily called on all local governments to do their utmost to fulfill this goal, so housing pressures on poor families will be significantly relieved and China will manage to avoid a devastating property bubble.

China's property prices have been on the rise since June 2009, fueled by record bank lending and tax breaks.

A year ago, the central government adopted a range of tightening measures to tame the housing market, mostly from the demand side.

Those measures, include higher down payments and lending rates, purchase limits and a promise to increase housing supplies, have achieved some results in discouraging speculation.

However, house prices are still climbing, with ten out of the 70 surveyed cities reporting double-digit increases in their new home prices in January.

The article argues that although reasons behind the rise in China's property prices are complicated, including fast urbanization and local governments' land sales for revenue, it is essential that Chinese policymakers keep house prices at a reasonable level. It is time to try out measures from the supply side since previous ones didn't work out.

In conclusion, the editorial says the construction of 36 million affordable homes in five years will not be easy, as it equals 20 percent of the country's current urban housing.

But the central government called for local governments to increase funding and land supplies for affordable housing projects, making it a mandatory task that must be fulfilled this year.

Chinese policymakers can give the property market a clear signal by explicitly throwing their weight behind the new housing mandate.

Common Problems behind the High and Low Quality of Domestic TV

China produced fourteen thousand episodes of TV drama in 2010, the most in the world.

However, a commentary on Eastday.com says this No.1 ranking is not something worth bragging about.

The article argues although China's TV production enjoys a high quantity, it lacks in quality to compete in the global market.

Domestic TV dramas enjoy a balanced development among different genres, and many of them brought in high ratings. But the storylines of many serials is usually trivial and aimless.

For example, the plots of some historical TV dramas even sometimes go against viewers' common sense, since the writers don't do enough research before writing.

Besides, there was time not so long ago, when Korean dramas, especially soap operas, went viral around the world. They were praised as close to life. But some of them have gradually lost their viewership, who started to get bored with the slow development of the plots.

However, some Chinese directors were "inspired" by those uneventful plots and decided to follow suit. It is now torturous to Chinese TV viewers as they search through channels only to find boring TV dramas that make them want to stop subscribing to cable TV.

Furthermore, the article points out that another factor contributing to the low quality of domestic TV dramas is the poor production technology.

In order to protect domestic dramas, the government put forward measures, including the reservation of prime time slots for domestic TV series. But it failed to provide the time and money for domestic TV dramas to catch up with the international standard on production methods.

In conclusion, the commentary says, professionalism is the yardstick against the quality of TV dramas. And the elements of a drama - the plotting, the setting, the shooting techniques, acting skills, and screenwriting - should all be judged by it.