Chinese premier pledges to fight inflation, corruption

By the CNN Wire Staff

March 5, 2011 8:45 a.m. EST

Beijing (CNN) -- China has made significant strides on the global stage over the past five years, but still needs to solve persistent problems at home, the country's premier said Saturday.

Speaking before the country's parliament, Premier Wen Jiabao pledged that fighting inflation and corruption would be top priorities over the next five years.

"We have not yet fundamentally solved a number of issues that the masses felt strongly about," he said, noting an "income gap," high prices and "significant problems concerning food safety and rampant corruption in some areas."

China, the world's fastest-growing economy, is trying to avoid overheating: Inflation there jumped 4.9% in January, driven by a more than 10% increase in food prices. Some also worry about a building boom that has driven up property prices.

"We are keenly aware that we still have a serious problem, in that our development is not yet well balanced, coordinated or sustainable," Wen said.

The annual meeting of the National People's Congress -- China's parliament -- is the Communist Party's chance to outline its blueprint for the country's future.

This year they are approving the country's new five-year plan.

And with unrest erupting in the Middle East, the stakes are higher.

Authority in China comes from the top down. But rumblings from the ground up have Communist Party chiefs concerned.

China is on high alert. Revolt on the streets of the Middle East has the government here spooked. Whispers of a "jasmine revolution" in China have sparked a crackdown.

"China is aware of a chaotic situation (in the Middle East)...to us it is chaos the type of chaos that destroys," said Teng Jimeng, a professor at a Beijing university.

The Chinese government Friday pledged to create more than 45 million jobs in urban areas, and said the country's GDP would grow 7% annually on average -- still impressively fast, though a comedown from recent years when growth has topped 11%.

The government also forecast a big rise in household income, which would gain more than 7% during the next five years.

The forecasts were made as part of the Chinese government's "Outlines for the 12th Five-Year Plan on National Economic and Social Development," a document the government submitted to the National People's Congress for approval.

"The only way to make the country strong and prosperous and to ensure the people's happiness is through reform and opening up, and we must implement them throughout the course of socialist modernization," Wen said Saturday.

As Western economies have struggled to regain their footing following the financial crisis of 2008, China plowed ahead, and has helped support the rest of the global economy. China now holds more than $1 trillion in U.S. Treasuries.

China recently passed Japan as the world's second-largest economy, though remains a distant second to the United States, at roughly a third of the size.

CNN's Steven Jiang contributed to this report.