Premier Wen Jiabao delievered his annual work report to the Third Session of the 11th National People's Congress in the Great Hall of the People in Beijing yesterday.
He warned that 2010 will be a critical but complicated year for China's economic development.
"This is a crucial year for the country to continue fighting against the global financial crisis while maintaining a steady and comparatively fast economic development, and accelerating the transformation of economic growth pattern," Wen said. "Although the development environment this year may be better than last year, we still face a very complicated situation."
That's because although China had a 4 trillion yuan ($585 billion) stimulus package that came into effect at the beginning of 2009 meant for infrastructure construction, a good chunk of that money was actually funneled into the real estate market which led to skyrocketing housing prices. Oh, and a good many cars were bought too.
Also, China's economy is very dependent on exports, at around 40 percent which is considered extremely high relative to other countries. Last year the government made no efforts to wean itself from the export sector and restructure its industries; instead it continued production even to the point of subsidizing it which resulted in overcapacity and dumping products in other countries. No wonder it is facing so many tariffs from other countries now, especially the United States.
So despite trying to keep China's economy moving, its government has paid the price in terms of greater social problems, in particular not enough jobs for fresh graduates, the ever-increasing income gap between the rich and poor, and house prices that are so insanely high that even a young couple with a double income cannot even afford an apartment in big cities.
How the government will tackle these main issues will be watched very carefully across the country. Young people today are more educated than ever in the history of the Middle Kingdom; Generation Y people are hard working, but expect decent jobs that pay decent wages. There are now stories of "ant colonies", where many young people live in an apartment that has been further divided into many more rooms because they can't afford an apartment on their own.
They are starting to wonder what the point of having a university education is when they are forced to live in such cramped and desperate conditions because of their low wages.
Meanwhile, Wen's two hour speech was peppered with words like "energetically", "deepen" and "vigorously."
He talked about a wide range of issues, from creating jobs for 9 million people, encouraging domestic consumption, preference policies for farmers, giving small and medium-sized enterprises greater access to credit, making education universal and improving quality, building permanent housing for nomads, reducing green-house gas emissions, continuing international cooperation on climate change, and fighting corruption.
While he mentioned a number of topics, his statements were vague as to how they would each be tackled.
One can't help but observe that Wen seems to make the same speech each year, with the numbers updated. For example, he admits that the Chinese government still "fell short of public expectations", with some officials "divorced from reality and the masses," and are "excessively formalistic and bureaucratic."
Most people would agree with his assessment.
But the premier's solution is to "let the news media fully play their oversight role."
Either he is earnestly inviting the press to freely report the shortcomings of all levels of government, or opening the floodgates, only to shut them later for one reason or another.
What does he really mean?
We will find out in the next few days.