Written by Laurence Brahm - Published by South China Morning Post on 03/08/2005

As the National People's Congress meets this week, the focus is on micro-managing and untangling an interlocking network of related problems which have become Premier Wen Jiabao's headaches for the year ahead.

Food will top the agenda. Despite former premier Zhu Rongji's staple food reforms in the late 1990s, farmers refuse to grow grain and rice because their income continues to drop. Last year, China's staple food production was more than 10 million tonnes short. For the first time in a decade, it had to draw on reserves and imports.

China's remarkable reforms over the past decade are urban in nature. Farmers, who constitute two-thirds of the population, receive no medical or retirement support, nor do they own the land. The effects of tax breaks are negated by local corruption. Population density and land shortages force the rural population to move in droves towards cities, where incomes are higher. So, nobody wants to grow grain.

The health of China's stunning 9 per cent gross domestic product growth is also a concern as it is driven by irrational investments. Applying Mr. Zhu's "macro -controls" now have a limited effect. No one wants to listen to administrative edicts when there is so much fast money to be made.

Like the 1970s Jackson Browne song, Running on Empty, this phenomenal growth needs fuel. China has become the world's second-largest importer of crude oil, but lacks reserves, port and transit facilities, and railways are at full capacity transporting the barrels. Last year, many factories were forced to close several days a week because they had no electricity.

In the mad rush for energy, more than 6,000 people officially died in coal mine accidents on the mainland last year. The disasters have pushed a social question In Beijing 's face: is this all worth people's lives?

Ask the consumer. Car purchases continue at unprecedented rates. Housing is in demand. When conspicuous consumption is the national ethos, everything requires energy, driving up the price of raw materials. Last year, inflation grew 3.9 per cent - the highest rise since 1997. But for two years, raw material price rises were not reflected in the consumer price index. Chinese People's Political Consultative Conference delegates have already expressed anger over the rising cost of education and medical care, while calling for industrial monopolies to be broken.

Meanwhile, the unemployment problem grows. China's economy, even now, can only create 9 million new jobs annually. But each year, 10 million graduates flood the market. Then there are 4-5 million laid-off workers from enterprises bankrupted by embezzling cadres, and farmers fed-up working the land in villages ruled by party secretaries behaving like local mafia. Together, they add 50-80 million transient workers a year seeking urban employment.

"Blind marketisation" is a new term expected to surface at this week's NPC sessions. It refers to local governments rushing towards modernization without considering the consequences. Social development cannot keep up because education and health sectors are under-supported, and funding is often siphoned off before it reaches its intended recipients.

Debate will focus on addressing structural problems and system reforms, skating over the fact that most investment, borrowing, construction and production must adopt illegal methods because, legally, the bureaucratic structure inhibits everything. Departments operate as independent fiefdoms and local officials give lip-service to those above while ignoring central decisions in practice. The delegates will call for government functions to be rationalized, and more restructuring. But will this amount to more than mere rhetoric? Maybe the problem is plain bureaucratic incompetence and, oh yes, - corruption.

Laurence Brahm is a global activist, international mediator, political columnist and author. He is the leading advocate of a fresh development paradigm - The Himalayan Consensus - an innovative approach to development.

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