Green China aims for growth and narrowed wealth gap

In a 100-minute speech that marked the opening of the annual meeting of the national legislature, Mr Wen outlined China’s achievements and future plans. The congress is expected to last 13 days and by the end, the new administration under Xi Jinping and Li Keqiang will have been formally appointed.

Mr Wen described the past five years as “a truly extraordinary period of time in the course of China’s development”.

China, he said, had “effectively countered” the impact of the global financial crisis and its GDP had increased from 26.6 trillion yuan (£2.82tn) to 51.9tn yuan – now ranking second in the world.

He also set the economic target for this year at 7.5 per cent GDP growth, although he admitted it is a goal the country “will have to work hard to attain”.

He said that more than nine million new urban jobs would be created while registered unemployment would be kept at or below 4.5 per cent.

Mr Wen addressed what is considered to be one of the main challenges facing China, rising income inequality.

There is a large disparity in income between regions and also between those resident in cities and the millions of migrant workers who leave their rural homes to take up what are often poorly paid jobs in urban areas.

“The development gap between urban and rural areas and between regions is large, and so are income disparities between individuals,” said Mr Wen, adding that “social problems have increased markedly” and “some people still lead hard lives”.

Mr Wen drew special attention to the issue of the environment, which has been a controversial topic in China over recent months.

There has been a public outcry over recent dangerously high levels of air pollution that have left a number of cities, including the capital Beijing, frequently shrouded in a thick layer of smog.

Signalling that China’s leaders will no longer maintain a position of economic growth at any cost, Mr Wen said that “unbalanced, unco-ordinated and unsustainable development remains a prominent problem”.

He added that economic development “is increasingly in conflict with resource conservation and environmental protection”.

Corruption has been a key issue highlighted by incoming president Xi Jinping since he was formally appointed as leader of the Communist Party in November, and it also featured in Mr Wen’s speech.

He admitted that “the transformation of government functions has not been fully carried out, and some areas are prone to corruption”.

Steve Tsang, director of the China Policy Institute at the University of Nottingham said that as Mr Wen was leaving office it was to be expected that he would outline his successes but added the challenges he listed could be seen as his “failures”.

Meanwhile, the government announced it will increase military spending by 10.7 per cent to 720.2 billion yuan The domestic security budget will also rise by 8.7 per cent to £81.7bn, the third year in a row it will outstrip defence spending.

China has experienced increasing unrest over issues such as corruption and pollution in recent years. Mr Tsang said that the larger domestic security budget “reflects that really the priority of the party is much more domestic security than external threat”.

“I think the internal threats are real, and they know it and that is reflected in the priority of the security budgets,” he said.