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China's Wen Vows to Contain Food, Home Prices Amid `Jasmine' Protest Calls

Chinese Premier Wen Jiabao pledged to curb inflation and punish abuse of power in an online forum with citizens as the government tries to head off dissent amid a renewed call for nationwide “jasmine revolution” protests.

The leadership is “determined” to punish abuse of power, which is too concentrated in the government and key officials, Wen said in an online interview with Chinese citizens on the site of the official Xinhua News Agency. Wen promised to boost food supplies to hold down costs, and to tackle surging property prices that have put home ownership beyond the reach of many.

Growing inequality is a threat to social stability, Wen said in the discussion, which comes as the ruling Communist Party prepares for the annual meeting of China’s legislature. Wen’s pledges also come as online postings called for the second week for rallies in major cities to protest corruption and misrule, inspired by the “jasmine revolutions” in the Middle East.

The police presence in downtown Beijing and Shanghai was increased today. Every entrance to Beijing’s Wangfujing shopping district was patrolled by police. People were able to enter and leave the area, though some were stopped and searched. At least 23 police vehicles were stationed around the Peace Cinema in the shopping area of People’s Square.

An open letter posted on U.S.-based website Boxun.com and circulated on the Internet urged people to gather at both locations, as well as others in cities nationwide, at 2 p.m. today. The letter calls for rallies to take place every Sunday at that time in cities from Beijing to Wuhan to Hangzhou.

Root Causes

High food prices, unemployment and anger over corruption helped spark protests that toppled undemocratic regimes in Tunisia and Egypt and have pushed Libya toward civil war.

The China rallies were first called for Feb. 20. Scores of Chinese police gathered at the protest sites, which included a Beijing McDonald’s Corp. restaurant, to quell demonstrations. Hundreds of people were present at the rally, though only a handful actively participated, the Associated Press reported at the time.

Several Beijing correspondents received phone calls from Chinese police asking them to “obey reporting rules” that require prior consent for interviews, according to an e-mailed statement yesterday by the Foreign Correspondents’ Club of China. The phone calls suggest “tighter-than-usual” reporting conditions in Beijing today, it said.

Revolution ‘Absurd’

Zhao Qizheng, who heads the foreign affairs committee of the Chinese People’s Consultative Conference, said the idea that there would be a Jasmine Revolution in China was “absurd,” the official Xinhua News Agency reported on Feb. 24. Responding to the Feb. 20 protests, Ma Zhaoxu, a Foreign Ministry spokesman, emphasized China’s economic growth and success in raising living standards.

“It is the Chinese people’s common aspiration to safeguard social and political stability, promote social harmony, and safeguard people’s livelihood,” Ma told reporters in Beijing Feb. 22. “No one nor any force can sway our resolve.”

The government’s reaction reflects its decades-long effort to keep unrest in check through a combination of economic growth, social reforms and political repression, said Nicholas Bequelin, a China researcher for Human Rights Watch in Hong Kong.

How to Handle

“One of the key aspects of the Chinese system is that it does not try to suppress social demands as much as to respond to them before they turn into political ones,” Bequelin said. “Everyday politics is about how to handle social demands; which ones to accept, which one’s to channel, which ones to suppress, which one can be ignored.”

The open letter addressed to the Chinese People listed a series of grievances including official corruption, a widening disparity between rich and poor, rising inflation, expensive housing and a poor health-care system.

In his two-hour discussion, Wen said China will curb inflation by controlling liquidity, by boosting agricultural production and by punishing hoarding and price manipulation, according to the website of the official Xinhua News Agency.

He also said the country has sufficient grain and foreign currency reserves to control food prices.

--Michael Forsythe, John Liu and William Bi in Beijing, Stephanie Wong in Shanghai and Debra Mao in Hong Kong. Editor: Ben Richardson, Jim McDonald

To contact the Bloomberg staff on this story: Bruce Grant in Hong Kong at bruceg@bloomberg.net

To contact the editor responsible for this story: Bruce Grant in Hong Kong at bruceg@bloomberg.net

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