CHINA/IRELAND: It will take 10 generations nbefore China is a truly modern nation, according to Mr Wen Jiabao, the premier of the People's Republic. Despite the great economic strides made over the last 25 years the country still has more than 30 million people living below the poverty line, he told a business breakfast hosted by the Tánaiste in Dublin yesterday.
China is still five years away from being in a position to implement compulsory education and also had to work to make medical care affordable for its 1.3 billion citizens, some 60 million of whom are disabled, Mr Wen said.
The premier told the breakfast that notwithstanding this, "tremendous achievements" had occurred, and China's Gross Domestic Product (the monetary value of goods and services produced by the economy) had grown by an average of 9 per cent a year to its current level of €1.2 trillion.
But economic development now faced a number of structural and institutional obstacles. "The quality and efficiency of our growth is not good enough."
China needed to press ahead with IT-based industrialisation which would put it on the path to developing knowledged-based industries, he said. There was also pressure to develop financial services and tourism.
There was also a need to balance development in a way that "can find a solution to the needs of so many people", he said.
Quoting the 18th century economist and philosopher Adam Smith, Mr Wen said that if the wealth created by development was not spread across society "then morally that society cannot hold water".
"That is why we have to press ahead with balanced development," he said. When a small issue - such as the relative scarcity of college places - was multiplied by 1.3 billion people, then it became a big problem, he said.
Responding to a pre-selected question from the audience, Mr Wen said he believed China could maintain an annual growth rate of 7 per cent in the medium term. On this basis GDP will have grown to €4 trillion dollars by 2020. Answering through an interpreter, Mr Wen said he based his assessment on three factors, the first of which was China's stable political, economic and social environment. The second was its very large internal market, and the third was the quality and abundance of the labour force.
Mr Wen was also asked about the stability of the Chinese banking system which is being put under strain by the rapid pace of economic expansion.
Steps had been taken to resolve the issue of capital adequacy and non-performing loans across the sector, he said. "A decision has been taken to put in place a modern banking system." And two banks - the bank of China and the China Construction Bank - have been singled out for development, he said.
Mr Jiabao later flew to Shannon, reports Brian McLaughlin. He met the chairman of Shannon Development, Mr Liam McElligott, chief executive Mr Kevin Thompstone, and tourism director Mr John King. He also called to the University of Limerick. About 100 human rights protesters held a peaceful demonstration.
