China's Wen bets final year on reform push

Wed Mar 14, 2012 6:45am EDT
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By Chris Buckley and Nick Edwards

BEIJING (Reuters) - China must embrace slower growth and bolder political reform to keep its economy from faltering and to spread wealth more evenly, Premier Wen Jiabao said on Wednesday, vowing to use his last year in power to attack mounting discontent that he warned could end in chaos.

Wen pledged to make growth more resilient to external pressures, deflate domestic property and inflation risks and deal with 10.7 trillion yuan ($1.7 trillion) in debt racked up by local governments, while also promoting political change.

"Reform has reached a critical stage. Without the success of political reform, economic reforms cannot be carried out. The results that we have achieved may be lost," the 69-year old Wen told reporters at the end of China's annual meeting of parliament, the National People's Congress (NPC), over which he has presided for a decade.

Wen has stood out among China's leaders as the most vocal advocate of measured relaxation under party control. As he prepares to leave power, he has made a habit of calling more forcefully -- though vaguely -- for political reform.

He retires next year along with President Hu Jintao after a decade in power which has seen China grow to become the world's second-biggest economy, but which is likely to see 2012 deliver the slowest rate of annual growth during their leadership.

Wen, who was once an aide to purged reformist party chief Zhao Ziyang, also gave an unusually blunt prognosis about the risks to growth and stability posed by China's political system, even warning that failure to act could rekindle the chaos of Mao Zedong's Cultural Revolution.

"A historical tragedy like the Cultural Revolution could occur again," he said. "Each party member and cadre should feel a sense of urgency."

During Mao Zedong's era of fervent Communism, Wen's father and grandfather, both teachers, were among the victims of party campaigns to demote citizens deemed to have bad "class" backgrounds or suspect pasts.   Continued...

China's Premier Wen Jiabao gestures as he delivers a speech at a news conference after the closing ceremony of the National People's Congress (NPC) at the Great Hall of the People in Beijing March 14, 2012. REUTERS/Jason Lee