He mostly dwelt on the risks that recent price rises pose to China's social fabric as well as double-digit growth that seems immune to cooling measures.
 

"The current price hikes and increasing inflationary pressures are the biggest concern of the people," Wen told nearly 3,000 deputies of China's parliament.

 

"The primary task for macro-economic regulation this year is to prevent fast economic growth from becoming overheated growth and keep structural price increases from turning into significant inflation," he said.

 

Consumer inflation officially averaged 4.8 per cent last year, well above the government's three per cent target, mainly due to large increases in the cost of food and housing, Wen said.

 

"Because factors driving prices up are still at work, upward pressure on prices will remain great this year," he said.

 

Red tape and graft

 

Wen also addressed longer-term worries over pollution, inequality and corruption.

 

Parliament is due to pass a government reorganisation plan that Wen said would cut red tape and corruption.

 

Wen said the changes would "mainly centre on changing the way the government functions, appropriately dividing responsibilities among departments that exercise macro-economic regulation, adjusting and improving bodies in charge of management, and improving departments responsible for public administration and public services".

 

Outside the Great Hall of the People where Wen was speaking, a lone protester threw leaflets up in the air, complaining about official corruption in the northern province of Shanxi.

 

Police quickly grabbed the papers and took her away in a van.

 

Wen did not commit to any of the broader democratic reforms that even Communist party experts and some officials have recently urged.

 

But he did promise that industry associations and other non-government groups would be given a bigger say in making and overseeing policies.

 

Environment

 

On the environment, he said heavy polluters would be a particular target of government efforts to stifle excessive investment, and more spending would go to the poor countryside.

 

Wen said the Olympics was a chance to 
promote China's international image [Reuters]
"We will implement the plan to close down backward production facilities in the electricity, steel, cement, coal and paper-making industries", he said.

 

He also said China planned to increase its urban sewage treatment capacity, with a goal of 100 percent collection and treatment of sewage in 36 large cities within two years.

 

Preparations for the Olympics have drawn international scrutiny on China's environmental and social strains and Wen stressed how seriously the government takes the Games, as well as the Paralympics, as a chance to promote China's international image.

 

"They will be of great importance in promoting China's economic and social development and increasing friendship and co-operation," he said of the sports events.

 

Taiwan

 

But friendship and co-operation were not on the table for Taiwan.

 

A day after China said it would boost military spending by nearly 18 per cent this year, Wen repeated government warnings against any moves by Taiwan towards institutionalising the island's de facto independence.

 

"We firmly oppose Taiwan independence, secessionist activities and will never allow anyone to separate Taiwan from the motherland ... by any means."

 

Beijing is wary about a referendum accompanying Taiwan's March 22 presidential election which will ask voters if they favour joining the UN under the name Taiwan - a move China views as an attempt by the island towards formal independence.