FACTBOX-Issues at China's annual parliament session
28 Feb 2007 05:43:50 GMT Source: Reuters
Feb. 28 (Reuters) - The National People's Congress, China's parliament, opens an annual session on Monday. The following key issues are expected to be discussed during the 12-day sitting. PROPERTY RIGHTS LAW: - Parliament is set to pass China's first law on property rights, after years of ideological battles over wording that gave equal protection to private and state-owned property. - Advocates say it will curb land grabs that fuel social unrest; critics argue it will exacerbate China's wealth gap by speeding privatisation. MILITARY BUDGET: - With international attention focused on China's military after it unveiled a multi-role indigenous fighter jet in January and used a missile to destroy an ageing orbiting satellite, analysts expect the defence budget to see double-digit growth once again. - Analysts say the official budget does not fully reflect actual defence spending. FOREIGN CURRENCY RESERVES: - Parliament could consider a shake-up of the way China manages its $1.066 trillion stockpile of foreign currency reserves, the world's largest, which are now invested mainly in low-risk, low-return bonds. - Policy makers propose a new agency that could put money into higher-yielding assets such as shares, property and natural resources. Such a diversification could rock global markets if handled clumsily. BUDGET: - Economic planners expect the already small budget deficit to shrink again. China projected a budget deficit of 295 billion yuan in 2006, down 1.7 percent from 2005. - With public debt less than 25 percent of gross domestic product and a budget deficit of around 1.5 percent of GDP, many economists say China can afford to spend more on public services such as education and health care. CORPORATE INCOME TAX: - The proposed new law would unify the rates paid by foreign and domestic firms at 25 percent, state media reports. Domestic firms now pay 33 percent and foreign-funded firms 15 percent. - Analysts say the overall impact on foreign direct investment would be limited due to China's relatively cheap labour and the promise of a huge market. CORRUPTION: - After a tumultuous year which saw Shanghai Communist Party chief Chen Liangyu sacked and lose his Politburo seat over misuse of a 10 billion yuan social security fund, China's top judge and prosecutor will detail corruption crackdown plans on March 13. RURAL POVERTY: - With rural incomes currently about one-third of urban incomes and the gap still widening, further measures to bridge the divide may follow despite President Hu Jintao's "new socialist countryside" plan to ease rural poverty. - Average rural incomes grew 10 percent in 2006, but were outpaced by a 12 percent increase in urban areas. ENVIRONMENT: - Smog-choked cities and dwindling water resources have made the environment a source of unrest. Despite measures to curb pollution, China failed to meet key emissions targets in 2006. Source: Reuters
