China's new priority: social wellbeing over growth

China's government promised its people Tuesday deficit-fueled spending to fight deep-seated corruption, improve the despoiled environment and address other quality-of-life issues demanded by an increasingly vocal public looking for change.

In the government's annual policy speech, retiring Premier Wen Jiabao signaled that leaders would no longer emphasize growth at all costs and would down-shift development to put priority on social programs.

"We must make ensuring and improving people's wellbeing the starting point and goal of all the government's work, give entire priority to it, and strive to strengthen social development," Wen said in a 100-minute speech opening the national legislature's annual session in the Great Hall of the People, his last address before stepping down.

The marked shift in emphasis is emblematic of a once-a-decade leadership transition that began four months ago when Xi Jinping and other younger leaders were appointed to run the ruling Communist Party. The largely ceremonial legislature, known as the National People's Congress, caps the transition and approves appointments to top government posts to manage the economic and foreign policies of the world's second largest economy and fledgling global power.

Wen's address, though given by the outgoing premier, and the accompanying budget presented by the government Tuesday are consensus documents approved by the new Xi leadership team. In a sign of changing styles, the language in Wen's report is much plainer than the often turbid phrasing of years past. It made only passing reference to such ideological rubrics as "socialism with Chinese characteristics" and the guiding theories of reform-era patriarch Deng Xiaoping.

Hundreds of soldiers, police and plainclothes security officer - equipped with fire extinguishers and anti-explosive blankets - ringed the Great Hall and the adjacent Tiananmen Square for the opening session. The public was kept well away behind cordons as the nearly 3,000 congress deputies gathered for the 13-day session.

The legislature, most of whose members belong to the party and are bound to vote as the leadership dictates, will approve a proposed streamlining of government ministries, as well as appointments. In reality, the decisions have already been made by Xi and party power-brokers behind closed doors.

Among the changes: Xi will be formally given the title of president, taking the last of the titles from his predecessor, Hu Jintao. The party's No. 2, Li Keqiang, will replace Wen as premier.

Together, the new leaders come to power at a time when Chinese feel the policies that delivered stunning growth are foundering in the ill-effects of corruption and environmental degradation and that benefits unfairly accrue to a party-connected elite. Xi has raised expectations for change in his first months in office, talking about the urgent need to stanch graft and adhere to laws rather than rule by untrammeled power.

"Whether it has been `harmonious society' or `beautiful China,' those are really sort of idealistic goals they have held up, the kind of life that Xi Jinping has articulated," said Dali Yang, a China politics expert at the University of Chicago. "The challenge now is that everywhere people look, China is far from harmonious, or beautiful for that matter."

Wen's speech put special emphasis on programs to boost the quality of life. He repeated a phrase he has used for several years to describe the excesses of China's government-directed, investment-heavy economic model, calling growth "unbalanced, uncoordinated and unsustainable." He ticked through a list of problems from excess factory capacity to a yawning income gap that has left the public disgruntled and fueled protests.

"Some people still lead hard lives," he said.

Three times he called for a change in the growth model to reduce waste, build out the service sector as a source of much-needed employment and direct spending to subsidized housing and other social programs that would boost household consumption.

Overall government spending will increase 10 percent to 13.8 trillion yuan ($2.2 trillion) helped by a 50 percent increase in this year's fiscal deficit. Defense spending will increase 10.7 percent to 720 billion yuan ($114 billion) - higher than the overall spending rate but a slight slowdown from last year's increase of 11.2 percent.

Restoring the battered environment came in for special attention, with Wen calling for reducing energy consumption, improving conservation and solving the country's serious air, soil and water pollution.

"In response to people's expectations of having a good living environment, we should greatly strengthen ecological improvement and environmental protection," Wen said. "The state of the ecological environment affects the level of the people's wellbeing and also posterity and the future of our nation."

Wen underlined the commitment to the anti-corruption campaign that party leaders have stressed is vital to their legitimacy and survival.

"We should unwaveringly combat corruption, strengthen political integrity, establish institutions to end the excessive concentration of power and lack of checks on power and ensure that officials are honest, government is clean and political affairs are handled with integrity," Wen said.

The appeal to bread-and-butter issues resonated with the delegates, many of whom have little power but are picked to make the congress appear broadly representative.

"I felt very, very happy. Especially at the end, I was so moved my eyes filled with tears," said Zhou Zhenbo, a migrant worker in Shanghai who said he is particularly interested in plans to broaden access to housing and education.

Yet Wen offered few concrete proposals on curbing corruption and other sources of public disaffection. A proposal being tested in a few areas that would require officials to disclose assets publicly was not mentioned.

Another public irritant - the enormous state security system that is used to repress threats to the party and runs roughshod over the legal system - also got scant mention. The budget allocates an 8 percent increase in spending on public safety, to 769 billion yuan ($124 billion), making this the third year in a row that outlays for the police, courts and other law enforcement exceeds defense spending.

Leaders targeted a 7.5 percent economic growth rate for the coming year, which is the same as last year and lower than the 8 percent rate that dominated planning for decades. However, the figure is largely symbolic because in reality growth has typically been higher. Last year's growth was 7.8 percent and this year's is expected to be even higher.

This year's boost for national defense continues a nearly unbroken two decades of annual double-digit percentage increases that have made China the world's No. 2 military spender behind the U.S. The substantial outlay shows that Xi wants robust backing for the People's Liberation Army at a time when China has tense territorial disputes with neighbors and wants to reduce U.S. influence in the region.

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Associated Press writers Gillian Wong, Christopher Bodeen and Didi Tang contributed to this report.