China's Wen Focuses on Fighting Inflation, Pollution

China's Premier Wen Jiabao vowed on Wednesday to focus on fighting inflation, pollution and misgovernment as the nation readies for a year when it will be tested by the Olympic Games and global economic gloom.

Greg Baker / AP

In his annual "state of the nation" report to the national parliament, Wen dwelt on the risks that fast price rises pose to China's social stability and double-digit growth, which has transformed the country into the world's fourth-largest economy.

"The current price hikes and increasing inflationary pressures are the biggest concern of the people", Wen said in report that he read out to nearly 3,000 deputies of the National People's Congress.

The consumer price index (CPI) rose by 4.8 percent last year, mainly due to large increases in the cost of food and housing, Wen noted. "Because factors driving prices up are still at work, upward pressure on prices will remain great this year", he said.

China has promised more balanced growth to counter public discontent with environmental havoc and a chasm between rich and poor. 

Wen said heavy polluters would be a particular target of government efforts to stifle excessive investment and promised more spending for the poor countryside.

"We will implement the plan to close down backward production facilities in the electricity, steel, cement, coal and paper-making industries", Wen said.

Beijing is preparing to host the Olympic Games in August, and the preparations have drawn a sometimes harsh international spotlight on China's environmental and social strains.

But Wen promised a successful event with "an excellent environment". He also sought to turn the attention of officials to broad challenges facing the country, especially red-tape and corruption that he said threatened economic and social development.

"We will attach even greater importance to combating corruption", adding that a government reorganization to be approved by the parliament would help improve administration.

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