Sun, February 27, 2011
Business > Economy

China eyes 7-pct annual growth, focusing on living standards (2)

2011-02-27 10:54:59 GMT2011-02-27 18:54:59(Beijing Time)  Xinhua English

Chinese Premier Wen Jiabao (L) holds an online chat with Internet users at two state news portals in Beijing, capital of China, Feb. 27, 2011. The two portals, namely of the central government and of the Xinhua News Agency, jointly interviewed Premier Wen on Sunday with questions raised by netizens. (Xinhua/Pang Xinglei)

"We will roll out measures in all these aspects, including tax policies, to make China a country of equality and justice where each citizen lives with the security net," said Wen.

In response to questions about whether the government would raise the threshold of personal income tax, Wen said the State Council, the Cabinet, would discuss proposals to do so on Wednesday.

He said the plan, which would be delivered to the National People's Congress for review, would benefit China's medium and low-income groups.

The government last raised the threshold for individual income tax from 1,600 yuan to 2,000 yuan in March 2008.


The government will increase spending in the medical insurance system to make medical services accessible to every citizen, said Wen.

He said China would boost government subsidies this year for insurance premiums to 200 yuan per person, and inpatient medical fee reimbursement rates for urban residents and farmers will be lifted to 70 percent.

The government would work on policies to ensure patients were reimbursed for special medical programs such as renal dialysis, he said.

More than 1.2 billion Chinese are covered by the country's medical insurance system. More than 90 percent of rural population and 89 percent of urban people are covered by government-sponsored health insurance.

In two years, government subsidies for insurance premiums for rural people would be raised to 300 yuan per person and 80 to 90 percent of their medical fees would be reimbursed, said Wen.

If the maximum reimbursement for rural patients reached 80,000 yuan or 100,000 yuan, most serious illnesses would be covered, but separate policies were still needed to cover illnesses such as cancer, he said.

"We will never allow lack of money to keep any citizen from being treated," said Wen.

Wen also revealed measures to narrow the income and pension gap between retirees from companies and government departments.

Retirees from government departments and institutions have long enjoyed better treatment than those retiring from businesses, giving rise to discontent among the latter.

The government would continue to raise incomes and pensions for retired company employees, especially those with higher education degrees, and order enterprises that practiced the yearly-salary mechanism to set aside a certain portion as incomes for retirees, Wen said.


Wen reiterated his determination to tame rising consumer prices and runaway housing prices during his tenure, vowing he "will not allow consumer prices to rise unchecked."

China's statistics agency said January inflation remained high at 4.9 percent despite a series of measures to dampen price rises, including three interest rate hikes since October last year.

"I check the price index everyday and I know very well the prices of grains, oil, meat, eggs and vegetables," said Wen. "I know clearly the impact of prices on the country."

The premier also sounded firm on reining in housing prices.

"We have to contain excessive price growth and keep housing prices at a reasonable level," Wen said.

China's housing prices have been climbing steeply since June 2009, fueled by record bank lending and tax breaks. The monthly year-on-year growth rate hit a record 12.8 percent in April last year.

However, housing prices are still rising, with prices of new properties in 68 of 70 major cities up from a year earlier again in January.

According to the National Bureau of Statistics, 10 of the 70 surveyed cities reported double-digit increases in new home prices.

Wen said the government would work to increase housing supplies, with 36 million affordable homes planned by 2015, including 10 million this year. Last year saw the building of 5.9 million affordable homes started.

The central government had signed strict agreements with provincial governments to guarantee the construction of 10 million subsidized apartments this year, Wen said.

The government would also step up efforts to develop low-rent public housing, said Wen. With its huge population and limited land, China's property policy should be appropriate to its situation and it did not mean that every Chinese owned their own homes.

Wen also said the government would "resolutely" curb demand of home purchases for investment and speculation.

"I am still confident that we will achieve the goal of our policies."

It was Wen's third on-line chat jointly hosted by the websites of the central government and Xinhua News Agency. Previous sessions were held on Feb. 28, 2009, and Feb. 27, 2010.

At the end of Sunday's web chat, Wen said to netizens that he treasured every such opportunity.

"Through the chats, I learn people's wishes and thoughts, while I tell them what government is thinking, what policies we have taken, and what kinds of problems still exist in our work." said Wen.

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