China's newly elected senior leaders pledged to continue the economic reform process, but they also voiced their concerns about rural living standards and rising unemployment. During the National People's Congress in March, President Hu Jintao praised the "outstanding contribution" of his predecessor Jiang Zemin, while stressing that only socialism could save China from the problems of unemployment and poverty.
Wen Jiabao, who has replaced Zhu Rongji as premier, said that private firms play an important role in creating jobs and pledged that they would no longer be disadvantaged in terms of bank loans and taxes. He also urged the nation to address the growing wealth gap between rich and poor. This remark is likely to encourage the expansion of China's social services and benefits, which until now have been reserved for citizens born in urban areas.
Government officials confirmed that the 'subsistence allowance' system, currently paid to about 21m urban poor, has now been extended to 4m farmers and that number would increase this year. Dow Jones said that the extension of the programme marked the beginning of a single welfare system for all citizens.