China's Prime Minister Wen Jiabao outlined an ambitious plan for stimulus on Thursday in order to continue China's modernization although the nation, as Mr. Wen admitted, is facing "unprecedented difficulties and challenges". Prime Minister Wen encouraged China's leaders to seek new economic strategy that would ensure consumer spending. He expressed that exports and abundant spending on constructions of roads, dams, and other infrastructure projects cannot be sustained in the long term.His speech to the National People's Congress, China's legislature, reflected China's two major concerns: riding out of the global economic crisis and keeping citizens' discontent and dissatisfaction from turning into public unrest.
Tao Wang is a Beijing-based economist for UBS Securities. She considered that China government takes social stability as the top concern and the new social investment is definitely necessary and equally important as major construction projects that have boosted China's economy.
Prime Minister Wen Jiabao expected in his speech that 8 percent growth in China's gross domestic product(GDP) would hold down unemployment and the potential for social unrest. Mr. Wen said that the new spending will be highly focused on schools, hospitals and clinics, low-income housing, environmental programs in order to improve people's lives. He also insisted that bolstering consumer demand must become "a long term strategic principle and a basic point of departure for stimulating economic growth" in order to ride out of the economic downturn and prepare China for the changed economy of the future.
Experts will be examining whether the new proposal is wisely and successfuly put into action as promised.
Opinion: I agree with Ms. Tao Wang that keeping social unstability from boiling over is as equally important as many other stimulus programs such as construction of roads or dams. This is because many riots have taken place in China, hindering the economic growth and unification of China. For example, during 2008 Beijing Olympics, the conflict between the government and Tibet was rampant that it was considered to be the top concern during the event. China used police force to prevent Tibet from sneaking into major cities. This was the major flaw during the world's biggest event. Just like this, social unrest has been a hindering factor in China's success. Especially, in this period of global economic crisis, social unrest is more likely because the government is having difficulty satisfying laid-off workers and their families, which could direclty lead to social unrest. Also, I agree with the government's proposal to bolster consumer spending. It is because the best way to ride out of this crisis is to have money cycling in society. Consumer spends money to buy things they need, and businesses can grow and hire workers by using the money. Growth of businesses will also ensure China's prosperous economy in the long term and help China prepare for the future economy.
