China's National People's Congress opens this week. In communist systems the official legislature is merely a rubber stamp. It sessions are simply too brief to enable it to function as the real thing real legislation is left to smaller party and government organizations. However, as in the old Soviet party congresses, the highly publicized sessions enable the party to showcase policy and launch new initiatives.
Chinese Premier Wen Jiabao has been holding a dialogue on the web with Chinese citizens in the run-up to the Congress . This dialogue is controlled, but the party is aware that, despite the dizzying pace of Chinese growth, there are many dissatisfied citizens in this 1.3 5 billion people country. The growth appears to have benefited the upper class, as illustrated by a rise in the consumption of luxury items. Middle-class and poor Chinese complain about skyrocketing housing prices, inflation and taxation.
Housing is a particularly sore point. Of the 55,000 questions addressed to the Chinese premier on the web, 6579 concerns the housing crisis.One question was illustrative: "When will the house prices come down? We already do not have enough to eat and owning a home remains a far-fetched dream."
The Chinese Media Project surveyed editorials in the party organ, the People's Daily, and demonstrated that a major term that keeps recurring is social fairness. The party noticed that people are complaining about the "flaunting of wealth" leading to "hatred for the rich" and there is also "animosity to government officials". The party daily concedes that "Dealing appropriately with the issue of social fairness has already become a major question that our country must confront
The party has already announced a number of measures to cope with the dissatisfaction. A new law intends to tax cars according to engine size. Up to now the tax on vehicles was nearly flat. This luxury tax on the rich is also being marketed as an energy-saving tax as the Middle East events have made China more cognizant of the need to conserve on energy.
China is trying to solve the housing crisis both by building more, as the government has already promised 36 million new apartments, and by imposing restrictions on the number of homes that locals and foreigners can own. Some Chinese cities such as Shanghai and Chongqing have tacked on a property tax to these restrictions in an attempt to dampen down the housing bubble.
China will also raise the threshold of personal income tax in an effort to place more disposable income in the hands of its citizens. thus spurring domestic consumption and beginning to wean the economy off export-led growth. China has all but exhausted its export markets and with the global recession, it cannot expect exports to expand further and keep creating jobs for Chinese workers.