China promises action on trade surplus, emissions

[October 28, 2010]  BEIJING (AP) -- China's leaders are promising to narrow its huge trade surplus and curb surging emissions of climate-changing greenhouse gases in an ambitious five-year plan to make its economy cleaner and more high-tech.

The Communist Party plan also promises to encourage consumer spending to reduce reliance on exports to power growth. The plan was approved last week by party leaders and reported Thursday by state media.

Such five-year plans are a holdover from China's era of central planning but the ruling party still uses them to craft long-term goals for this fast-changing society.

The latest plan reflects ambitions to transform China from a low-wage nation of factory workers and farmers into a consumer society and creator of technology.

It says Beijing will expand domestic demand while also improving the competitiveness of China's export industries, according to the party newspaper People's Daily and other media.

"Imports should also be promoted, so as to pursue a trade balance," the newspaper said.

Action to narrow China's swollen trade surplus, which hit $16.9 billion in September, might help to ease tensions with Washington and demands by some American lawmakers to sanction Beijing. Reacting to complaints Beijing's currency controls are adding to its trade surplus, the U.S. House of Representatives passed legislation last month to allow Washington to penalize governments that manipulate their currency for trade advantage. The Senate is due to take up the measure later.

The plan also reflects the intention of Chinese leaders to steer rapid economic growth to a more sustainable level and focus on making the energy- and resource-hungry economy more efficient and spread prosperity to the rural and urban poor.

Narrowing the yawning, politically volatile wealth gap between an elite who have benefited most from three decades of economic reform and the country's poor majority is a key issue for the ruling party.

The plan gave no detailed targets for economic growth that moderated to 9.6 percent in the latest quarter and is expected to slow in coming years.

It also promises to curb greenhouse gas emissions, though the reports Thursday gave no indication of movement on demands by Washington and other governments for China, the world's biggest source of such gases, to accept binding limits.

As a developing country, China is not bound by international emissions limits but has promised to rein in its output. A key sticking point in the latest global climate talks is whether Beijing will accept binding limits, which it has so far rejected.

"The importance of building a resource-saving and environment-friendly society should be stressed to save energy, reduce greenhouse emissions and actively tackle global climate change," the party's plan says.

The plan also calls for technology development to reduce reliance on foreign know-how -- a key goal of the communist leadership over the past decade.

"China should upgrade its capabilities in indigenous research and innovation," the plan says, according to the People's Daily.

It gave no details but state media have said Beijing might spend up to 4 trillion yuan ($600 billion) to develop new and emerging industries over the next five years.

[Associated Press; By JOE McDONALD]

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