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The new "Hu & Wen team" faces immediate hurdles

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[Beijing, March 19] The 10th People’s Congress came to a close this morning. In the final vote for the working report drafts from the Supreme Court and the Supreme Appeal Court, about 30% of the delegates have cast either opposition or absentee votes — an indication of a serious concern over corruption in recent years. The newly appointed President Hu Jintao reiterated recently that all the governmental employees in the next administration “must be free of corruption and exercise self-discipline, while honestly receiving supervision from the populace.”

According to The China Times, the working report from the Supreme Court failed to gain support from 80% of the delegates, with 398 opposition votes and 203 absentee votes. The working report from the Supreme Appeal Court, even worse, drew particular resentment from the delegates, with 545 opposition votes and 264 absentee votes. One in every four delegates manifested their discontent with corruption issues, and their anger was actually shown on the giant voting screen in the meeting hall.

Right after the final vote, the newly appointed Premier Wen held a press conference. Wen flatly admitted the serious corruption phenomenon when being asked about this matter. Wen pointed out that during the economic transition period corruption surfaces quite seriously in some areas. Wen was almost shouting in narrating his four anti-corruption measures, and repeated that as the new administration leader he would set an example to be “supervised by the people.”

At his first press conference as the Premier, Wen raised five major problems facing this new administration: 1) slow growth in agriculture and farmers’ income, which has become a critical factor in restraining the internal market demand; 2) management difficulties in some enterprises, which undermine the effort to establish a modern enterprise system as a long-term task; 3) the ever-increasing unemployment, which causes enormous pressure to social security/welfare system; 4) the uneven development between the rural and urban areas and between the East Coast and Western regions, as some regions and population groups are still in poverty; 5) the increasing burden of finance and budget, as the ill investment ratio is much greater than anticipated.

In terms of future key government tasks, Wen said that he would focus on four tasks: 1) maintain steady economic growth, while improving people’s living standards; 2) control two issues: strategic adjustment in economic structure and continuation of expansion to open trade; 3) deal with three major economic issues: employment and social security/welfare, increase financial income and cut costs, continuation of adjustment and regulation of market economy; and 4) push for four reforms in agriculture, enterprises, finance, and governmental structure.

Regarding bad investment by state banks, Wen indicates that altering the operations of state banks requires the support of good policies, including supplementary capital and abandoning bad investments; but the fundamental banking issue lies in the reform.

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