Rural worry mars China's reform targets

Zhu has closed the eleven-day meeting of China's parliament

(CNN) -- Chinese Premier Zhu Rongji has said his government has met all major targets except raising the income of 800 million farmers.

In a press conference at the end of the National People's Congress (NPC), the head of the State Council mounted a vigorous defense of his record in attaining economic growth and reform.

Even though Zhu, 73, is widely expected to step down next March, he refused to comment on changes within the party, including who will likely become the next prime minister.

The premier spent the bulk of his speech espousing his economic achievements, including maintaining a 7 percent growth rate and turning around the bulk of loss-making state-owned enterprises (SOEs).

"I take great pride in having been able to overcome the Asian financial crisis and seeking the opportunities available to bring about an unprecedented growth in the economy," Zhu told around 500 Chinese and foreign reporters gathered at the Great Hall of the People.

'PM of deficits'

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He revealed the economy had grown 7.5 percent in the first quarter of this year compared to the same period in 2001 -- and added he was confident it would grow by 7 percent this year.

The premier spent about 15 minutes refuting the argument put forward by a Hong Kong business paper that he should be called a "prime minister of deficits."

He said since the budget deficit as well as total national debts were respectively 3 percent and 16 percent of China's GDP, they were within internationally accepted levels of fiscal prudence.

Most importantly, Zhu said, the funds raised through selling treasury bonds and other borrowings were used for productive infrastructure building as well as helping SOE's turn around.

The funds raised by the government, the premier said, had resulted in "2.5 trillion yuan worth of superior assets that will bring about tremendous economic and social benefits for the long term."

He asserted that his government's "pro-active" fiscal policy had "got it just right," adding, half jokingly, that "Chinese kung-fu is just remarkable."

Biggest headache

The NPC is considered the highest organ of state power in China

The head of the State Council admitted, however, that his "biggest headache" was raising the income of China's farmers, especially since the country entered the World Trade Organization in December.

While the income levels of civil servants and workers had increased substantially, and jobless workers and retirees in the cities could enjoy social welfare, "the income of farmers in certain areas has declined."

Given there was already excessive supply of grain and other common crops, the livelihood of peasants could only be improved if the structure of produce was readjusted, the premier said.

His government would do more to alleviate rural poverty, including cutting down on taxation.

Even though three international reporters asked him whether he would seek a second term, Zhu said he could not say anything because "I myself do not know the answer.'

When asked what his successor should learn from him, he replied: "I have no merits except devoting myself tirelessly to my work."

'Fear into hearts'

Zhu denied reports in another Hong Kong paper that he often banged his fists on tables and stared at his underlings, or that he had liked to strike fear into the hearts of the people.

"I have never intimidated the masses," Zhu said. "I only intimidate corrupt officials."

The premier, however, played down a question of corrupt practices recently discovered in several branches of the Bank of China.

Given the huge Chinese financial network, it was "not very surprising" that there should have been individual instances of irregularities, he said.

China's top three leaders are due to leave their Communist Party posts at a five-yearly congress later this year and their government jobs at the NPC in March 2003.