By Thomas Clouse
Brighter future: China promises better deal for rural citizens
China’s top legislator has pledged to improve social services and better balance rural and urban political representation. Wu Bangguo, chairman of the Standing Committee of the NPC, said that the country’s leaders would soon pass a draft social security law. While Wu offered few details, the law is expected to improve pension, healthcare and unemployment benefits, as well as reduce or eliminate fees for primary and secondary education. Wu also wants to amend electoral laws to allow equal representation within the NPC for China’s urban and rural populations. While the 3,000 NPC representatives are not directly elected and meet annually to formally approve decisions already made by top leadership, the change in NPC composition reflects the government’s push to better address the needs of its 713 million rural citizens.
China’s trade surplus dropped to $7.61 billion in February, its lowest level since February 2009. Both exports and imports registered drastic increases: Exports rose 45.7% year on year, while imports jumped by 44.7%. The decline in surplus may reduce pressure from China’s trading partners for China to allow its currency, the renminbi, to appreciate. China has long kept the renminbi’s value pegged to the value of the US dollar, a practice that some countries charge unfairly reduces the prices of Chinese exports. China’s central bank governor, Zhou Xiaochuan, in his address to the NPC last month, said that economic conditions must first stabilize before the currency could be allowed to appreciate.
Inflation picked up in February, with the consumer price index hitting a 16-month high of 2.7% year on year. Real estate prices are also up, increasing by 10.7% in 70 large and medium-size Chinese cities, and total real estate investment increased by 31.1% year on year. The 2.7% inflation rate now exceeds the 2.25% interest rate on 12-month certificates of deposit, leading many to believe that further tightening of monetary policy is likely. The government has already raised reserve requirements twice this year. The rate increases, together with government administrative measures, have slowed new loan issuance to RMB767 billion, a reduction of RMB276 billion compared with February of 2009.