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China parliament passes property, tax laws
2007-03-17
China's parliament passed a landmark property rights bill on Friday as its annual session closed after debates centered on Premier Wen Jiabao's drive to limit growth with energy saving and spending on the countryside. Delegates also passed a corporate income tax bill that ends preferential treatment for foreign-funded firms by unifying tax rates at 25 percent. The move reflects China's determination to wean its economy off exports and move away from cheap manufactured goods. In his March 5 opening speech to the National People's Congress, largely a rubber stamp for the ruling Communist Party's policies, Wen had pledged to see through promises to save energy and cut pollution while striving to keep the world's fourth-largest economy humming. As he closed the session with his annual news conference, Wen built on that theme, saying the party needed to focus on groups left out of China's economic boom, particularly farmers. "The priorities now are promoting equality in education opportunities, adopting progressive employment policies, narrowing income gaps and building social security networks that cover both the cities and the countryside," he said. Increasing protests across China fueled by corruption, land grabs and a yawning rich-poor gap threaten stability, underscoring the leadership's concerns over the chasm between booming coastal cities and the lagging hinterland. Wen also stressed the need to improve the quality of listed companies and the administration of capital markets as a bull run drove Chinese stock valuations far above international levels, sparking fears that a speculative bubble may be developing. "I pay attention to the development of the stock market, but I pay even more attention to the health of the stock market," said Wen, a geologist by training. INVESTMENT AGENCY He reaffirmed China's plans to set up a new agency to invest part of the country's more than $1 trillion in foreign exchange reserves, adding that such an agency would have no impact on U.S. dollar-denominated assets. "China actually pursues a policy of diversifying its foreign exchange reserves based on its security concerns," Wen said. Such an agency would make proper use of foreign exchange reserves with the goal of preserving and increasing their value, he added. In foreign affairs, Wen said he hoped his visit to Japan in April would be an "ice-thawing journey," following a period of rancour over issues stemming from Japan's World War Two-era invasion and occupation of parts of China. He said the next two years would be crucial for peace and stability in the Taiwan Strait that separates China from self-ruled Taiwan, over which Beijing claims sovereignty. "I have already stressed that we oppose any form of splittist activity giving Taiwan de jure independence," he said. Wen, who survived Cultural Revolution purges on his way to the pinnacle of power, urged political reforms to cure the country's torrent of official corruption, which he blamed on excessive concentration of power and lack of checks and balances. Without promising major democratic changes, Wen held out the prospect of greater popular oversight of officials. "Corruption cases have been constantly happening and are increasingly serious, even involving many senior leaders," Wen said in answer to a question about the former Communist Party boss of Shanghai, Chen Liangyu, felled by corruption charges. (Additional reporting by Chris Buckley, Ben Blanchard, Guo Shipeng, Eadie Chen, Jiang Yan, Vivi Lin and Benjamin Kang Lim)
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