China’s defence spending ‘not a lot'
From Max Lee
The Daily Mail’s
Special Correspondent in Beijing

BEIJING—Economic development and improvement of people's lives are the top priority for China and the nation does not spend a lot on national defence, Minister of Defence Cao Gangchuan said yesterday in Beijing.
The total defence expenditure for this year, calculated under the new exchange rate, is US$30.2 billion, said Cao. "That is, indeed, the true budget," Cao said at a joint press conference with visiting US Defence Secretary Donald Rumsfeld.
Chinese President Hu Jintao told Rumsfeld that improving Sino-US military ties would benefit the broader relationship between the two nations, and intensive and candid talks would help the military forces of the two big countries, and help the overall bilateral political relationship.
Rumsfeld became the first American defense secretary to visit the headquarters of China's strategic missile fleet in northern Beijing. The visit to the previously off-limits missile headquarters was viewed by Pentagon officials as an important opening, and as an indication of a willingness by Chinese military to engage with the Pentagon.
Cao was responding to a journalist who asked if China has under-reported its defence budget.
The nation's primary task is economic development because nearly 30 million Chinese still live in poverty, Cao said.
He said that some expenditure, such as that on the manned Shenzhou VI space mission, had not been included in the defence budget this year.
The Pentagon, whose budget is several times bigger, has expressed concern about China's military development. It last summer inflated the figure for China's military spending this year to US$90 billion.
Rumsfeld, who arrived in Beijing on Tuesday for a three-day visit, yesterday met President Hu Jintao, also chairman of the Central Military Commission (CMC); Cao and Guo Boxiong, both CMC vice-chairmen; and Jing Zhiyuan, commander of the Second Artillery Force.
The President said that leaders of the two countries are in close contact; and that the two nations have effective co-ordination in trade, the economy, anti-terrorism, non-proliferation and reform of the United Nations.
Hu said that China and the United States share a broad range of common interests and they should deal with "sensitive issues" in bilateral relations with constructive attitudes.
Rumsfeld who congratulated Chinese leaders on the successful Shenzhou VI mission said the two armies should expand exchanges in military education sector.
His trip paves the way for a visit by US President George W Bush next month.
Rumsfeld described his meeting with his Chinese counterpart Cao as "constructive, candid and useful”.
"I sense a desire on the part of the minister to find activities and ways we can work with each other that will contribute to demystifying what we see of them and what they see of us," Secretary Rumsfeld said.
On the question of Taiwan, Cao said it involves China's core interests and urged the United States to keep its promise to oppose "Taiwan independence" so that peace and stability are maintained in the region.
Rumsfeld said that his country would adhere to the one-China policy and observe the principles of the three joint communiqus between the two countries.
China and the United States have opportunities to learn from each other and better understand each other's direction and intentions, he added.
In recent years, the two militaries have strengthened ties, characterized by high-level visits, exchanges between military schools and visits of military vessels to each other's ports.
In the morning, Rumsfeld visited the Central Party School, a venue for training Party officials, and held a question-and-answer session with students and staff.
He hailed China's economic growth and said the United States would welcome a peaceful and prosperous China.
Rumsfeld's visit is the third by a US defence secretary in the past decade and the first since July 2000. He first visited China in 1974 when he was chief of staff to then-President Gerald R. Ford.

Growth plan ‘active and prudent’: Premier Wen
Bureau Report

BEIJING—Chinese Premier Wen Jiabao has described the country's goal of doubling its year 2000 per capita gross domestic product (GDP) figure by 2010 as "active and prudent”.
The goal is based on an overall consideration of economic performance from 2001 to 2005 and conditions for development in the coming five years, he said in his explanation, released yesterday, on a proposal on the 11th Five-Year Programme at the Fifth Session of the 16th Communist Party of China Central Committee last week.
The plan draws up the nation's 2006-2010 economic and social blueprint.
Wen described the goal of reducing energy costs per unit GDP by 20 per cent in the coming five years as "achievable”.
This reflects the requirement for the building of an energy saving and environmentally friendly society and sustainable development, he said.
Wen acknowledged that in recent years, the speed of energy consumption was faster than economic growth, showing that there is still much potential for saving energy and raising the efficiency of energy use.
China's economy expanded at 9.5 per cent in the first half of the year and is widely expected to see only a slight slowdown in 2006.
But the economy, Wen warned, rides excessively on increased investment and material input. The inefficient growth pattern, sparking increasingly acute contradictions between resources and the environment, "can no longer continue," the Premier said. Wen highlighted the "scientific concept of development," indicating the shift in the government's development philosophy.
The proposal of the CPC Central Committee is based on the "scientific concept of development" that will also be the guide in the whole process of China's reform and opening-up drive, he said.
In his explanation, the premier also called for more efforts to build a harmonious society, saying that employment, social security, poverty reduction, education, medical care, environmental protection and safety will be given priority.
He said that employment will remain a tough issue for a long period of time to come, so China has to carry out pro-active employment policies and try every means to create job opportunities.
On social security, the premier called for further efforts to improve the pension system, basic medical care, unemployment, industrial injuries and maternity care, to earnestly resolve the social security issue for migrant farmer workers in cities, and to set up a security system of minimum living standards for rural areas.

China’s economy grows by 9.4 percent

BEIJING—China’s economy continued to grow briskly in the first three quarters of the year, expanding at 9.4 percent with investment still strong and exports continuing to boom, official data shows. Growth for the third quarter alone was also 9.4 percent. According to previously published figures, Gross Domestic Product (GDP) grew 9.5 percent in the second quarter and 9.4 percent in the three months to March. “It’s the same old story. There is not much of a difference from last year,” said Morgan Stanley economist Andy Xie. The third quarter outcome was marginally above forecasts for 9.2-9.3 percent from analysts who had predicted a moderate slowing as macroeconomic controls finally put the brakes on the torrid growth of the last three years. National Bureau of Statistics spokesman Zheng Jingping said the world’s fastest growing major economy was on target to meet full-year expectations but acknowledged problems continued to exist. In particular, he highlighted the agricultural sector, continued “irrational” fixed asset investment, the foreign trade imbalance and slowing profits in the industrial sector.
“The nation’s economy has continued to develop towards the target of macro-regulation as a good momentum of steady and rapid growth is maintained,” he said. “The goals in economic and social development set at the beginning of the year will be achieved for the whole year so long as we continue to implement in real earnest, macro-regulation policy and measures in the fourth quarter”. Earlier this month, the Chinese Academy of Social Sciences, one of China’s key academic thinktanks, forecast full year growth of 9.4 percent before a slide in exports cools things down more significantly in 2006. The OECD has forecast growth of nine percent this year for China and Zheng said this was feasible. “The economy has grown by 9.4 percent in the first three quarters. So for the whole year, it is possible for the economy to grow about nine percent, or even more than nine percent,” he said.—Agencies