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Pollution, Risk Are Downside of China's 'Blind Expansion'

Premier Wen delivers China's annual work report at the opening session of the annual National People's Congress in Beijing



Premier Wen delivers China's annual work report at the opening session of the annual National People's Congress in Beijing Photograph by Feng Li/Getty Images

The work report is the closest thing China has to a State of the Union address. The latest annual report (PDF), delivered by outgoing premier Wen Jiabao on March 5, shows a clear awareness among China’s leaders that the nation faces major challenges. The economy was portrayed as still too reliant on investment over consumption while favoring inefficient state enterprises over the private sector and facing in many industries what Wen termed “blind expansion” that has led to overcapacity, pollution, and financial risks.

Wen will step down at the end of the congress, following 10 years as premier, to be replaced by 57-year-old Li Keqiang; Hu Jintao will give up the presidency to 59-year-old Xi Jinping at the same time. Speaking before close to 3,000 delegates assembled in Beijing’s cavernous Great Hall of the People for the opening of the almost-two-week-long National People’s Congress, 70-year-old Wen for the last time reviewed China’s progress and laid out the leadership’s goals for 2013 while presenting a blizzard of statistics. He didn’t provide specifics on how the goals are to be met. “What we have here is declaration of principles and a wish list,” says Andrew Batson, Beijing-based research director for China-focused economic consultancy GK Dragonomics. “But there is not a huge amount of concrete stuff.”