Chinese leader Hu Jintao proposes scientific therapy to unleash vitality of socialism--

Chinese leader Hu Jintao proposes scientific therapy to unleash vitality of socialism(2)

2007-10-16 16:04:09 [ Big Normal Small ] 　Comment

The proposed taxation system in the report is believed to be able to help cool down local governments' enthusiasm in seeking economic growth at the cost of environment, some delegates said.

As the current taxation system moves nearly 30 percent of national revenue from local governments to state coffers, some financially constrained local governments still stick to growth-first mentality and brush aside the central authorities' orders to rein in land use and protect environment.

Thus there have been calls for fiscal system reform to help accomplish the country's goal of reducing energy consumption and curb land use violations.

Although detailed measures are to be released, delegate Xie Xuren, who doubles as Finance Minister, said the proposed reform is "to make county and township governments wealthy enough to fulfill their obligations entrusted by the central government."

As the world is undergoing extensive and profound changes, China will face more unprecedented challenges than opportunities in its process of reform, Hu acknowledged in the report.

Since the 16th CPC National Congress five years ago, the Party's leadership has been confronted with a string of emergency events from the SARS epidemic, product safety crisis, rocketing trade surplus that has incurred pressure from its trade partners to global warming, an issue the world's other large economies are expecting for more efforts from China to address.

In the words of Stephen Roach of Morgan Stanley Asia, the Chinese leadership must learn to address the woes.

"Globalization is a two-way street. For China, modern globalization's success story means understanding not only the way it is affected by trends in the broader global economy but also the way in which it impacts developments in the rest of the world," said Roach.

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