Wen's gov't work report at the Third Session of the 11th NPC

2. Accelerating the transformation of the pattern of economic development and adjusting and optimizing the economic structure

We urgently need to transform the pattern of economic development. We will work hard to put economic development onto the track of endogenous growth driven by innovation.

We will continue to promote restructuring and revitalization in key industries.

First, we will intensify technological upgrading. We will effectively use funds for technological upgrading to guide enterprises in developing new products, saving energy and reducing resource consumption.

Second, we will encourage mergers and reorganization of enterprises. We will break industry monopolies, remove regional blockades, support superior enterprises in acquiring ones in financial difficulties, and close down backward production facilities more quickly.

Third, we will comprehensively raise product quality. We will guide enterprises to improve their quality management systems, focusing on brands, standards, service, and performance, and to enhance their sense of social responsibility. We will effectively strengthen the market oversight and credibility systems, and strive to raise the quality of China's products to a new level.

We will foster emerging industries of strategic importance. The global financial crisis is hastening the birth of a new technological and industrial revolution. It is of decisive importance for the future of our country that we develop emerging industries of strategic importance and capture the economic, scientific and technological high ground; therefore, we must seize opportunities, identify priorities, and achieve results. We need to vigorously develop new energy sources, new materials, energy conservation, environmental protection, biomedicine, information networks, and high-end manufacturing industries. We will make substantive progress in developing motor vehicles powered by new energy sources and in integrating telecommunications networks, cable television networks, and the Internet, and accelerate R&D in and application of the Internet of Things. We will also increase investment in and policy support for emerging industries of strategic importance.

We will further promote the development of small and medium-sized enterprises.

First, we will set up a sound service system for small and medium-sized enterprises. We will promptly revise the criteria for classifying such enterprises, accelerate the development of a public service platform and an information service network for them and bases for small business startups, continue to reduce and streamline administrative examination and approval procedures, and resolutely sort out fees and eliminate unreasonable ones.

Second, we will continue to implement the policy of fiscal support for small and medium-sized enterprises. The central government will allocate 10.6 billion yuan to support their development. A preferential income tax policy for small enterprises with low profits will be implemented. Small and medium-sized enterprises will be eligible to receive money from special funds for technological upgrading in the central budget, and local governments should also increase investment in technological upgrading.

Third, we will provide better financial support for small and medium-sized enterprises. We will improve the credit assessment system for small enterprises, and encourage the establishment of a loan risk compensation fund for them. We will allow full tax deductions for loan loss reserves for loans to small and medium-sized enterprises. We will develop a multilevel system of credit guarantees for these enterprises, and implement the policy of exempting business tax for qualified credit guarantee agencies serving them and allow those agencies to exempt withdrawals from reserve funds and compensation for losses from taxation. We will expand channels for small and medium-sized enterprises to obtain financing in order to effectively solve their financing problems, especially those of small enterprises.

We will accelerate the development of the service sector. We will further raise the development level of the service sector and its proportion of the national economy. We will vigorously develop production-oriented service industries, including finance, logistics, information, R&D, industrial design, commerce, energy conservation, and environmental protection services, and promote the intimate integration of service industries with modern manufacturing industries. We will also develop public utilities, real estate, and property management services, community services and other service industries closely related to people's wellbeing. We will accelerate the development of tourism and expand new types of services. In view of the weak foundation and great potential of the service sector in rural areas, we need to accelerate the establishment of a sound system of rural workplace and consumer services, mainly revolving around production, sales, scientific and technological information, and financial services. We will speed up the establishment of an open, fair, and standardized system for licensing service providers and encourage the participation of non-government capital. We will further improve policies for promoting development in the service sector, and gradually lower the electricity, water, gas, and heat rates for service industries encouraged by the state to the same levels charged to industrial enterprises.

We will strive to conserve energy and reduce emissions.

First, we will energetically promote energy conservation and raise the efficiency of energy consumption, especially in industry, transportation, and construction. We will make solid progress in the ten major energy conservation projects, the campaign to save energy in 1,000 enterprises, and the project to promote energy-efficient products that benefit the people, and make saving energy a good habit throughout society. We will increase our energy-saving capacity by an equivalent of 80 million tons of standard coal. We will rapidly develop and employ desulphurization equipment for every coal-fired power generating unit.

Second, we will strengthen environmental protection. We will work to improve the environment in key watersheds and regions, treat urban sewage and garbage, deal with pollution from non-point agricultural sources, and comprehensively clean up heavy metal pollution. In urban areas, the daily sewage treatment capacity will increase by 15 million cubic meters and the daily garbage disposal capacity will grow by 60,000 tons.

Third, we will energetically develop a circular economy and the energy conservation and environmental protection industries. For the circular economy, we will support R&D in technology, demonstrations and applications, and capacity building. We will save energy, water, land and materials. We will comprehensively utilize mineral resources, recycle industrial waste, use by-product heat and pressure to generate electricity, and transform household solid waste into resources. We will rationally develop, utilize, and protect marine resources.

Fourth, we will actively respond to climate change. We will improve our ability to adapt to it and ameliorate its effects. We will work hard to develop low-carbon technologies; promote application of highly efficient, energy-conserving technologies; develop new and renewable energies; and intensify development of smart power grids. We will accelerate afforestation, increase forest carbon sinks and expand our forests by at least 5.923 million hectares. We need to energetically build an industrial system and consumption pattern with low carbon emissions. We will participate in international cooperation to address climate change and work for further progress in the global fight against climate change.

We will promote balanced economic development between regions. We will continue to develop the western region on a large scale, comprehensively reinvigorate the old industrial bases in northeast China and elsewhere, energize the development of the central region, and support the eastern region in taking the lead in development. We will conscientiously implement all plans and policies for promoting regional economic and social development. We will accelerate growth of development priority zones. We will increase support for old revolutionary areas, ethnic minority areas, border areas and poverty-stricken areas. We will focus on formulating and implementing policies for economic and social development in Xinjiang, Tibet, and Tibetan ethnic areas in Sichuan, Yunnan, Gansu and Qinghai provinces. When implementing the overall strategy for regional development, we will emphasize exploiting different regions' comparative advantages and making well-targeted efforts to solve major problems arising in the course of development in each region. We will focus on reversing the growing gap in economic and social development between regions, balancing their development better, accelerating the improvement of the public finance system, and making access to basic public services more equal.