Mr Wen also addressed the issue of Taiwan, restating
China's opposition to independence for the island, but, in an overture of
peace, also calling for renewed peace talks.
On economic matters, the speech was unusually frank. Mr
Wen, in his first "state of the nation" speech since assuming
office, said that the government was aware that work fell short of
expectations. Among the problems he listed was the slow growth of incomes
in the countryside, causing a rapidly-widening wealth gap between the
richer coasts and the troubled hinterlands.
In addition, he said, people are complaining about the
cost of schooling and medical care.
"Solving the problems of agriculture, villages and
farmers is one of the most crucial parts of our entire work," Mr Wen
said as he made his nearly two-hour speech to the 3,000 delegates with
President Hu Jintao and former President Jiang Zemin by his side.
Addressing the economy, he said his government aimed to
achieve 7% economic growth in 2004. The downgrade from last year's
breakneck 9.1% figure indicates an attempt to head off rising discontent
from those left behind by China's economic boom.
EU INCOMERS TO 'BOOST UK ECONOMY'
An influx of workers in the UK from the 10 Eastern
Europe countries set to join the EU is necessary to alleviate the nation's
growing labour shortages.
That is the conclusion of a report from the Ernst &
Young Item Club, which says "modest increases of 70,000
migrants" would boost GDP by £10bn in a decade.
The economic forecasting group was speaking ahead of
Poland and nine other nations joining the EU on May 1.
It says the UK needs Eastern European migrants to fill
And it adds that the people from countries, also
including Hungary and the Czech Republic are well educated by
international standards. The conclusions of the Ernst & Young Item
Club are however in marked contrast to that of some politicians and
pressure groups who have been calling for restrictions on the number of
people coming to the UK from the new members states.
Home Secretary David Blunkett has said people from the
new EU nations would not need work permits but would need to be on a work
But Peter Spencer, chief economic advisor to Ernst
& Young Item Club, believes the current scare stories are
"missing the point".
He said: "Migration from central Europe has
actually been falling in recent years as wage differentials with the UK
have moderated somewhat."
And a recent study by the European Commission shows
only 1% of the working population of the 10 countries set to join the EU
would be likely to migrate to existing member states, even if they enjoyed
full freedom of movement, the report says.
EU OPENS NEW FRONT IN TRADE WAR
The European Union has imposed escalating tariffs on US
companies that will cost American business hundreds of millions of
It is the first time that the EU has hit US firms with
sanctions as part of a trade dispute.
The EU is imposing a 5% increase in duty on a range of
goods, from honey to roller skates to nuclear reactors.
The aim is to force the US Congress to change a law
that gives an unfair tax advantage to US exporters. The EU sanctions will
increase by a further 1% each month until they affect US exports worth
$666m (£356m) a year. John Disharoon, of the American Chamber of
Commerce, said that it was "a sad day for trade relations between the
US and Europe".
The trade row is just one of a growing number of
disputes between the EU and the US, the world's largest trading partners.
The US was forced to withdraw sanctions against EU and other steel
producers after the World Trade Organisation (WTO) ruled them illegal in
ITALIAN BORROWING RAISES CONCERNS
Italy's budget deficit was 2.4% of gross domestic
product (GDP) in 2003, well within the European Union's 3% limit broken by
France and Germany.
But state debt was 106.2% of GDP, more than the
government had predicted, and raised concerns about the balance of
Europe's fourth-biggest economy.
Prime Minister Silvio Berlusconi said the country must
now focus on boosting growth to aid "economic recovery".
He repeated his calls for tax cuts, and said there had
to be more investment. According to figures released by the statistical
office Istat, the budget deficit was 2.4% of gross domestic product last
year. That is up on the previous year's total of 2.3%, but less than the
2.5% goal set by the Treasury. As part of its so called
stability-and-growth pact, the EU has set a limit of 3% for budget
deficits in countries that are part of the region's single currency.
JAPAN GOVT DEBT SEEN DOUBLING BY 2017-18
The Japanese government's debt pile could nearly double
by the 2017/18 fiscal year to top 900 trillion yen ($8.3 trillion),
according to calculations by Japan's postal service body.
Japan Post, in a business plan presented before a
ruling Liberal Democratic Party subcommittee, projected the outstanding
volume of ordinary government bonds to balloon to 903.68 trillion yen in
fiscal 2017/18 from 482.63 trillion in 2004/05, starting April 1.
The document said the projection was based on a
Ministry of Finance analysis of the future impact of revenue and spending
patterns in fiscal 2004/05.
Japan Post, a transitional body that Prime Minister
Junichiro Koizumi wants to eventually privatise, inherited the postal
savings and insurance systems from the former Postal and
Telecommunications Agency a year earlier and is a huge investor in
Japan's broader public sector debt, at just under 700
trillion yen at the end of March, is already worth some 140 per cent of
the nation's gross domestic product — the highest ratio among industrial
KOREAS INCH TOWARDS INDUSTRY PARK
South Korean firms will be able to start work later
this year in a joint industrial park in North Korea.
The agreement marks a fresh milestone in the economic
rapprochement between Seoul and Pyongyang. But four days of talks to bring
the impoverished north and rich south closer after half a century of
division made little progress on other issues.
Construction at the park just across the border has
stalled amid concerns over North Korea's nuclear programme. The planned
park in Kaesong is the result of a ground-breaking economic summit in
The agreement to complete preparations comes after
months of negotiation and could see five firms — who can choose whether
to take power from the south or the north — initially setting up shop on
a 33,000 square metre site. The final size is intended to be 100 times
MALAYSIA TO ISSUE ISLAMIC BANK LICENCE
Malaysia's central bank said it was on track to issue
up to three Islamic banking licences to foreign firms this year as part of
plans to become a regional Islamic financing hub.
"Yes, why should we delay?" central Bank
Negara Malaysia assistant governor Mohd Razif Abdul Kadir said in reply to
reporters' questions on whether licences would be out in 2004.
CALL FOR NEW TESTS ON GM CROPS
Major new field tests should be done before any
genetically modified crops are allowed to be grown commercially in
Britain, MPs said.
The Environmental Audit Committee report comes just
days before the government is expected to approve a type of GM maize for
planting. The crop is believed less damaging to wildlife than its
conventional version. But the unanimous cross-party committee report will
say trials on the maize are invalid and new tests are needed.
The committee says the ordinary maize used as a
comparison in tests with its GM equivalent was sprayed with a powerful
weed killer which is about to be banned. But BBC environment correspondent
Tim Hirsch said a series of new experiments would delay any GM planting
EURO INTEREST RATES REMAIN AT 2%
The cost of borrowing in the 12-nation eurozone is to
stay at 2% for March — despite calls for reduced rates to help
kick-start economic growth.
The European Central Bank made the announcement at a
governing council meeting last week. Some political leaders such as German
Chancellor Gerhard Schroeder had called for a rate reduction to cool the
high flying euro against the dollar.
TESCO 'PLANNING CHINESE PURCHASE'
Tesco is close to winning a foothold in the
fast-growing Chinese market, the Financial Times (FT) has reported.
The company is in 'advanced' talks to buy a 50% stake
in Chinese food retail group Ting Hsin International for some $200m,
according to the FT.
Ting Hsin operates a total of 25 supermarkets,
including 10 in Shanghai, China's pre-eminent commercial centre. Tesco,
which currently does not have a presence in China, would not confirm the
IMF BOSS EYES GERMAN PRESIDENCY
International Monetary Fund chief Horst Koehler has
confirmed that he is leaving the post of managing director to run for
president of Germany.
He was nominated for the position by the country's
The liberal FDP and the conservative Christian Union
alliance control a special assembly that will choose a president on May
SHELL CHAIRMAN IS FORCED TO QUIT
Royal Dutch/Shell chairman Sir Philip Watts has bowed
to shareholder pressure and resigned, after the firm slashed the estimate
of its oil reserves.
BOE LEAVES RATES UNCHANGED AT 4%
The Bank of England has decided to keep UK interest
rates on hold at 4%.
In February the bank's Monetary Policy Committee voted
to increase rates from 3.75% in a bid to rein in the housing market and
temper consumer spending.
But evidence that the manufacturing sector is still
struggling appears to have prevented another rise this time.
NEW CLAMPDOWN ON MONEY LAUNDERING
Laws to prevent money laundering in the UK are being
extended to a number of new business sectors.
Lawyers, accountants, casino bosses and estate agents
could all now face prison if they fail to report suspected fraud. It comes
under an extension to the Proceeds of Crime Act, that previously only
applied to banks, to further clamp down on money laundering.
Under the act, anyone with suspicions is obliged to
contact the National Criminal Intelligence Service (NCIS).
AUSTRALIAN HOUSING BOOM DEFLATES
The long boom in Australia's housing market seems to be
coming to an end.
For the fourth straight month, the number of approvals
for new building slid in January.
The 3.3% seasonally adjusted fall means housing starts
were down in the year to January, showing recent interest rate rises may
be having an effect.
Australia's central bank has been trying to take the
housing market off the boil while not harming the country's strong
The government said it welcomed the slowdown, which
followed revelation that — in part thanks to the Rugby World Cup — the
country's economy expanded 4% in 2003.
Korean Air is to spend 10.6 trillion won (£4.8bn;
$9bn) over the next 10 years, in an attempt to upgrade its fleet and boost
its global profile.
US DOLLAR CLIMBS TO 3-MONTH HIGHS
The US dollar has hit its highest levels in almost
three months against most of the world's major currencies.
Increasing evidence that the US economy is adding jobs
has fuelled speculation that interest rates may now rise. The dollar has
added 6% since falling to record lows against the euro and some traders
are predicting more gains.
On March 3, the US currency rose to 1.2186 per euro and
also strengthened versus the British pound, Japanese yen, Swiss franc and