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Beijing's budget balancing act

(China Daily)
Updated: 2007-03-08 09:43

China's premier is trying to get his nation's $2.6 trillion economy to change course. That requires him to maneuver very deftly. Wen Jiabao, delivering his annual report on the work of the government to the legislature yesterday, promised a significant boost in State spending on social services, as well as a smaller budget deficit. That combination demonstrates the balancing act his administration is performing as it tries to spread the benefits of China's booming economy more widely in the country - without disrupting that growth.

One important consequence of the new wave of social programs is a stronger role for the central government in providing, or at least funding, social services. That is a reversal of the previous tendency for local governments to shoulder most of the burden.

And through crackdowns on the confiscation of land and on environmental pollution - problems that have spawned serious social unrest - the central government is also gradually curbing the power of local authorities.