Chinese Premier Wen Jiabao speaking to reporters at a press conference in Beijing on Friday, March 16, 2007: ``China has maintained relatively steady and fast growth over the past few years, but this is not a time for complacency,'' Wen told reporters at the National People's Congress meeting. ``The biggest problem in China's economy is that the growth is unstable, imbalanced, uncoordinated and unsustainable.'' Photo: Xinhua.

China's parliament, the National People's Congress (NPC), concluded its annual session on Friday morning with the adoption of a landmark property law and a corporate income tax law.

State news agency Xinhua says that the two laws, granting equal protection to public and private properties and unifying corporate income tax rates for domestic and foreign companies, were adopted by an overwhelming majority vote.

The NPC adopted the corporate income tax law with 2,826 votes for and 37 against, and 22 abstentions, and the landmark property law with 2,799 votes for and 52 against, and 37 abstentions.

The private-property law -- the first of its kind for China since the 1949 communist revolution -- will permit people to own and sell assets such as land-use rights for up to 70 years in cities. The tax law charges foreign and domestic companies the same corporate rate of 25 percent.

Warning on Chinese Economy

Chinese Premier Wen Jiabao said Friday that China's economic growth, the source of about a 10th of global growth last year, is unstable and environmentally unsustainable,

``China's investment growth is too high, lending growth too fast, liquidity excessive and trade and international payments very imbalanced,'' Wen said at a press conference in Beijing today. Energy efficiency and environmental protection issues haven't been ``properly resolved,'' he said.

Wen's comments highlights the concerns of senior Chinese officials that the economy may overheat with excess capital investment.

However, while exports are surging and the foreign reserves exceed $1,000 billion, policymakers face a conundrum because this year, China expects to create only 50% of the jobs that 24 million new entrants to the market will be seeking.

Data published this week showed inflation rising and continued strong money supply and industrial production growth, while the February trade surplus was close to a monthly record.

Central bank governor Zhou Xiaochuan is reported to have said on Friday that he's watching inflation closely and Commerce Minister Bo Xilai said he's ``very concerned'' about the surplus, suggesting the government may raise interest rates or further restrict lending.

Wen said the creation of a new investment agency to help manage China's $1, 070 billion foreign-exchange reserves won't cause a slump in US securities. China's purchases of US dollar assets are ``mutually beneficial,'' he said.

China is the world's second-largest holder of US Treasuries after Japan, with $353.6 billion in January.

Market analysts interpret Wen's comments on the economy as signalling an interest rate rise and credit tightening.

According to estimates by The People's Bank of China, each 0.5 percentage point increase in the bank reserve ratio cuts the amount available for lending by 150 billion yuan (€14.8 billion; $19.4 billion). China's economy grew 10.7 percent last year, more than triple the rate of of growth in the US and European Union.

China's money supply expanded 17.8% in February, the most in six months. Inflation rose to 2.7% from 2.2% in January. Industrial production surged 18.5% in January and February combined, the most in eight months.

``China has maintained relatively steady and fast growth over the past few years, but this is not a time for complacency,'' Wen told reporters at the National People's Congress meeting. ``The biggest problem in China's economy is that the growth is unstable, imbalanced, uncoordinated and unsustainable.''