China's economic growth has slowed from 13 per cent in 2007 to just 6.8 per cent in the last quarter.

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Victor Gao on predictions for China's growth

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"As long as we adopt the right policies and appropriate measures and implement them effectively, we will be able to achieve this target," Wen said, noting that the target of eight per cent growth for 2009 factored in "both our need and ability to sustain development".

The National People's Congress (NPC), as China's parliament is known, has brought almost 3,000 delegates from across China to Beijing for the most important annual meeting in China's political calendar.

The body is regarded as the world's largest parliament, although in practice little actual debate is seen and it acts largely as a rubber-stamp for policies previously decided by the ruling communist party.

Uncertainties

In a speech designed to portray a confident and united leadership, Wen balanced optimism with caution and emphasised the importance of spurring domestic spending to maintain growth.

"Demand continues to shrink on international markets; the trend towards global deflation is obvious; and trade protectionism is resurging," he said.

Government spending boosts



Agriculture, forestry and water conservancy: $50.4bn (+27.5%)

Education: $29bn (+23.9%)

Medical and health care: $17.2bn (+38.2%)

Social security: $49bn (+22.1%)

Science and technology: $21.3bn (+25.6%))

Environmental protection: $18.1bn (+18.9%)

National defence: $69.2bn (+15.3%)

Transport: $27.6bn (+17.9%)

"The external economic environment has become more serious, and uncertainties have increased significantly."

In his speech Wen pledged sharp increases in government spending in several sectors, with agriculture, health care, social security and science and technology all receiving boosts of between 22 and 38 per cent.

Ahead of Wen's address to the NPC, global markets had soared on speculation that he would add to a $585bn stimulus plan unveiled in November aimed at shoring up the world's third largest economy.

But while the Chinese premier projected a leap in China's budget deficit to $139bn – more than five times the level in 2008 - Wen announced no increase in the headline cost of the package.

He did, however, acknowledge that the downturn had exacerbated fundamental problems in China, such as an inadequate social security, health provision, and the widening wealth gap.

Jim McGregor, former Beijing bureau chief of the Wall Street Journal, told Al Jazeera he believed the growth targets outlined in Wen's speech are achievable.

"China is somewhat the opposite of, say, America or Europe right now in that they have a 40 per cent saving rate, the government has a lot of money, they have a lot of political controls on their economy so they can move things that a pure free market economy can't," he said

"What they're doing now is not that much different from what they've been doing for the past 20 years."

Corruption

China's leaders fear rising unemployment could threaten social stability [Reuters]
In his address Wen also reiterated previous commitments to root out official corruption, addressing concerns expressed recently in Chinese media that some of the $585bn stimulus spending could be siphoned off by corrupt officials.

Acknowledging that corruption remains "a serious problem", he said the goverment would "never allow any "organisation or individual to exploit the surge in public spending for private gain."

The government, Wen said, would "prohibit image projects that waste both human and financial resources and vanity projects that are divorced from reality."

China's leaders have repeatedly pledged to fight corruption, warning that graft within the communist party ranks is one of the greatest threats to the legitimacy of its rule.

Stability

China's economy has been hit hard by the global slump in demand for its exports and officials are hoping the stimulus combined with a massive new welfare programme will help avoid unrest and preserve the social stability prized by the country's leaders.

Underscoring that challenge on Wednesday, hundreds of protesters were reported to have clashed with police in southwestern China amid an escalating dispute over missing compensation payments.

A Hong Kong based human rights group said the protesters – which it said numbered more than 2,000 - believe local officials embezzled about $1.5m due to them for losing their homes during construction of the massive Three Gorges Dam project.

Chinese officials had previously indicated that improving the plight of the nation's least well off would be a top priority for this year's meeting of the NPC, which is expected to last for nine days.

Adding to the sense of unease are tensions surrounding China's 58-year rule over Tibet, with the highly sensitive 50th anniversary of a failed uprising against Chinese rule falling during the parliament session, on March 10.