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China launched a shake-up of its bloated government bureaucracy Wednesday and ordered stern measures to tame inflation that threatens to erode the living standards of ordinary Chinese.

Premier Wen Jiabao laid out the government’s priorities for the year, saying that swelling treasury revenues from strong economic growth should be used to make sure inflation does not hurt the poor.

Wen was speaking at the opening of the national legislature’s annual session.

He said subsidies would be increased for farmers, the poor and pensioners in a bid to prevent social tensions - caused by a widening income gap - from boiling over.

"Only by appropriately spreading the fruits of economic development among the people can we win their support and maintain social harmony and stability," Wen said in his two-and-a-half-hour policy speech.

His address touched on topics ranging from this summer’s Beijing Olympics to expanding urban sewage treatment in an attempt to improve China’s environmental woes.

Wen, normally mild-mannered, also reiterated hard-line warnings to the self-governed island of Taiwan not to move further toward formally declaring independence.

Helping those Chinese citizens left behind amid the nation’s headlong embrace of free markets has been a signature policy of the popular Wen and Communist Party chief Hu Jintao. But their efforts have been hampered in part by rocketing food prices that have pushed inflation to an 11-year high of 7.1%, and by resistance within a bureaucracy that favors protecting local interests.

While the 2,970 National Peoples’ Congress delegates - a cross-section of party, government and military elite - met inside the mammoth Great Hall of the People, police patrolled an extensive security cordon around adjacent Tiananmen Square in central Beijing.

Police took away several people who were apparently trying to protest. A middle-aged woman tossed into the air sheaves of paper protesting corruption in coal-rich but economically poor Shanxi province. Three police led her away.

The party-controlled legislature is largely toothless and adopts decisions made earlier by the Chinese leadership. The annual session, however, gives local politicians and senior leaders chances to air grievances and to lobby for pet policies behind closed doors.

On the public agenda for this year’s two-week session were approval of leading economic posts - a follow-up to a reshuffling of the party leadership last fall - and a restructuring meant to streamline government agencies involved in transport, energy and the environment.

The restructuring is vital to keeping economic growth and eliminating waste, Wen said low fee cash advance. Though he provided few details, he said the reorganization would create several larger ministries "to resolve problems of overlapping responsibilities."

The proposal was the latest in decades of efforts to slim down the bureaucracy and to make it more responsive to the leadership and public needs. The latest effort was given added impetus by a series of freak snowstorms that lashed southern and central China this winter, exposing gaps in the government’s disaster response plans and problems in transportation systems.

Wen did not explicitly link the restructuring to the government’s initially sluggish response to the storms. But he promised the delegates: "We will learn from this large-scale natural disaster."

Efforts to moderate double-digit economic growth and to control the resulting inflation consumed much of Wen’s lengthy speech, underscoring the government’s worries that rising prices could undermine the growth that underpins the party’s hold on power.

Wen said the government’s chief task for the year "is to prevent fast economic growth from becoming overheated growth and keep structural price increases from turning into significant inflation."

He ordered a series of measures to bring consumer price inflation from the 7.1% rate it reached in January to 4.8% for the year. He also called for extending price controls on some foods, gasoline, electricity and other scarce goods and resources.

Subsidies would be raised for farmers to encourage them to grow more food, Wen said, while curbs would be imposed to reduce investment in factories, land and other fixed assets that are helping drive up demand.

While inflation has been largely absent in the past decade, it has periodically plagued China’s 30-year march toward free markets - at times triggering political unrest. Worries about food and housing costs fed into the large pro-democracy demonstrations that centered on Tiananmen Square in 1989 and nearly toppled the government.

"This report is all about controlling consumer prices," said Meng Qiliang, a congress delegate and the vice governor of the largely poor southern province of Guizhou. "The pressure is very big." 

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