China's parliament closes under reform debate cloud

BEIJING, Mar 14 (Reuters) China's parliament is poised to approve a rural reform plan today that seeks to address the chasm dividing rich cities and the poor countryside, closing one of the most contentious legislative sessions in a decade.

The roughly 3,000 delegates to the largely ceremonial National People's Congress are due to gather at 0100 GMT to cast their votes on the five-year plan approved by Communist Party leaders at a plenum last year.

Parliament has never voted down Communist Party policy and there is little suggestion they will do so when they convene at the cavernous Great Hall of the People, perched at the edge of Tiananmen Square and adorned with red flags.

They will also approve the annual report of Premier Wen Jiabao, who will hold his annual news conference at about 0200 GMT after parliament closes, and the budget of Finance Minister Jin Rengqing, who called for trimming the budget deficit and winding back a fiscal stimulus that began in 1998, as well as for a double-digit military budget increase.

Observers will be looking closely at the vote tallies to see whether a larger number of delegates, who last year approved Wen's work report with only 17 no votes, register their opposition.

Wen opened parliament pledging that China would channel its surging economic growth to narrow the rich-poor gap that has been linked -- along with official corruption, land grabs and other problems -- to a rise in social unrest in the countryside, home to more than 700 million people who earn just a third of the annual wages of their urban brethren.

Setting out government goals for the coming year, Wen also promised stability in general economic policy, including the exchange rate and monetary policy, while saying more investment must go to farmers to ensure stability and growth.

DEBATE But the parliament session has been marked by an unusual level of debate over the pace of economic liberalisation not seen since the days of former paramount leader Deng Xiaoping, the architect of China's reform and opening up policies that started more than two decades ago.

Argument in the early 1990s was over whether to continue that policy of opening up. But Deng ended all debate, placing China firmly on the reform path with a ''southern tour'' to special economic zones in the southern province of Guangdong in 1992.

This year, the debate appears not to have been not about whether China will reform but about the pace of liberalisation, rising social inequality blamed by critics on the reforms, and complaints over foreign influence in the country's economy.

The head of the National Bureau of Statistics, Li Deshui, told Reuters last week that foreigners had gained a strong foothold in the economy and that China should act to prevent more domestic firms falling prey to multinationals.

Analysts believe the small but vocal opposition will not fundamentally alter China's direction of pursuing reform but can slow it. Even before the annual session opened on March 5, the debate forced a property law that was to have been approved this year off the agenda.

Security has been tight at the 10-day session, with dissidents rounded up or detained before it began to prevent any petitions or protests that might embarrass the government.

Reuters SK VP0655