The following is the full text of the Report on the Implementation of the 2004 Plan for National Economic and Social Development and on the 2005 Draft Plan for National Economic and Social Development, submitted to the Third Session of the Tenth National People's Congress on March 5, 2004.

REPORT ON THE IMPLEMENTATION OF THE 2004 PLAN FOR NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT AND ON THE 2005 DRAFT PLAN FOR NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT

(Third Session of the Tenth National People's Congress, March 5, 2005)

Fellow Deputies,

The National Development and Reform Commission has been entrusted by the State Council to submit this report to the Third Session of the Tenth National People's Congress (NPC) on the implementation of the 2004 plan for national economic and social development and on the 2005 draft plan for national economic and social development for your examination and approval and also for comments and suggestions from the members of the National Committee of the Chinese People's Political Consultative Conference.

I. Implementation of the 2004 Plan for National Economic and Social Development

Under the leadership of the Communist Party of China (CPC), the people of all our ethnic groups earnestly carried out the Plan for National Economic and Social Development adopted at the Second Session of the Tenth NPC in 2004. We established and implemented a scientific outlook on development, strengthened and improved macroregulation, and worked hard with one heart and one mind to promote sustained, rapid, balanced and sound development of the national economy and all-round social progress. On one hand, outstanding economic problems were alleviated and negative, destabilizing factors were held in check, and on the other, the national economy continued its excellent trend of rapid growth, good performance and strong vitality. By and large, the 2004 plan was implemented satisfactorily. Due largely to substantial increases in investment and exports, China's GDP reached 13.6515 trillion yuan in 2004, representing a year-on-year rise of 9.5% and exceeding the target set at the beginning of that year. There were 9.8 million urban residents entering the workforce for the first time, 800,000 over the target; and the registered urban unemployment rate was 4.2%, 0.5 percentage points below the target. Influenced by the rise of grain prices and soaring oil prices on the international market, the consumer price index rose by 3.9%, slightly higher than the target of around 3%. Total volume of imports and exports increased by 35.7% due to the sustained world economic recovery and China's rapid economic growth.

1. The economy grew rapidly yet steadily, and economic performance improved remarkably. Central authorities resolutely decided upon and promptly adopted a series of measures for strengthening and improving macroregulation, specifically to address the problem of overheating in fixed asset investment in the first quarter. As a result, the excessive growth in investment was curbed, the growth rate of fixed asset investment gradually declined, and consumer demand revived. Total investment in fixed assets for the country totaled 7.0073 trillion yuan, an increase of 25.8% over the previous year but a decline in the growth rate of 1.9 percentage points. In the fourth quarter, it increased by 22.6%, 20.4 percentage points less than the first quarter. Retail sales of consumer goods totaled 5.395 trillion yuan, an increase of 13.3%, or 10.2% in real terms after adjusting for price changes, up by one percentage point over the previous year. National revenue reached 2.6356 trillion yuan, up 21.4%. Large industrial enterprises generated 1.1342 trillion yuan in profits, an increase of 38.1%.

2. Adjustment of the industrial structure was vigorously promoted, and weak sectors were strengthened. Within China's GDP, the added value of primary industry hit 2.0744 trillion yuan, an increase of 6.3%; that of secondary industry amounted to 7.2387 trillion yuan, a rise of 11.1%; and that of tertiary industry was 4.3384 trillion yuan, up 8.3%.

Grain production took a significant turn for the better, and agricultural restructuring continued. Total acreage of grain production experienced a rebound after shrinking five years running, increasing about 2% to reach 101.61 million hectares. Grain output totaled 469.5 billion kilograms, up by 38.8 billion kilograms. Development of areas of industrialized production of superior quality farm products was strengthened and the proportion of superior varieties of grains, vegetables and fruits produced has risen. There was a bumper crop of cotton, and animal husbandry and aquaculture developed rapidly.

Development of energy facilities and the transportation infrastructure was intensified. Work progressed smoothly on a number of major energy construction projects, such as the second pipeline for transmitting natural gas from Shaanxi to Beijing, the first phase of the Guangdong liquefied natural gas project, state petroleum reserve bases, upgrading of coalmines for production safety, large coalmines and rural power grids. Production capacity of coalmines increased by 120 million tons. Installed power-generating capacity increased by 50.55 million kilowatts. An additional 1,433 kilometers of railway tracks were laid. There were 46,000 kilometers of newly built highways opened to traffic, including 4,476 kilometers of expressways. The handling capacity of ports increased by 120 million tons. Work to upgrade or build new airports in Guangzhou, Chongqing and Qingdao was completed, and a number of feeder airports were built and put into operation.

Upgrading of traditional industries was stepped up, and hi-tech industries grew rapidly. Differentiated fibers accounted for 28% of the fibers used for textiles, a year-on-year increase of 3 percentage points. New dry-process cement accounted for 32.5% of total cement output, up by 7.5 percentage points. Sheet and strip steel accounted for 33.7% of steel production, up by 1.6 percentage points. Total added value of large hi-tech enterprises rose by 23.1%, 6.4 percentage points more than the average for all large industrial enterprises. Hi-tech industries that can greatly stimulate economic development such as biology, integrated circuits and software, are now emerging.

3. Further progress was made in development of the western region, and the revitalization of Northeast China and other old industrial bases got off to a good start. Notable results were achieved in infrastructure development in the western region. A total of 80 billion yuan was invested to fund 10 new major projects in 2004. The entire West-to-East Natural Gas Pipeline Project was put into commercial operation as scheduled. Additional power-generating capacity of 8 million kilowatts went on line in the West-to-East Electricity Transmission Project, raising the total installed power-generating capacity to over 20 million kilowatts. An additional 396 kilometers of track was laid on the Qinghai-Tibet Railway. Expanded or newly built airports in Xingyi, Lhasa, Hotan and Yan'an were put into operation. The natural environment was improved. We returned 667,000 hectares of farmland to forest, afforested an additional 3.255 million hectares of barren hills and uncultivated land, and improved 5.6 million hectares of seriously degraded grassland. Restructuring and technology upgrading in Northeast China and other old industrial bases was accelerated. Hi-tech projects for enhancing the ability of enterprises to make technological innovations were carried out smoothly. Work to solve the problem of sinkholes in coalmining areas went into full swing. In the eastern and central regions, we continued to develop distinctive economies under macroregulation and accelerated structural adjustments.

4. Economic restructuring was further deepened, and China opened wider to the outside world. All controls on the grain market were lifted. The pace of introduction of the shareholding system in large state-owned enterprises was quickened. A basic framework for oversight and management systems for state-owned assets was established. The experimental reform to transform the Bank of China and the China Construction Bank into stock companies progressed smoothly. The pilot reform of rural credit cooperatives was expanded. Important progress was made in the reform to deregulate interest rates and make them subject to market forces. Implementation of the reform of the investment system was begun. Taxes on all agricultural specialties except tobacco were rescinded, and the agricultural tax was reduced or exempted. Pilot projects to transform the VAT were begun in the old industrial base of Northeast China. The reform of export tax rebate mechanism was fully implemented. We continued to deepen the reform of the administrative approval system, eliminating or streamlining 495 more items requiring administrative approval. We continued to carry out pilot projects for a new cooperative medical care system in rural areas and to reform the urban medical service system. The reform of the cultural system progressed smoothly.

China's foreign trade leapt to a new level. The total volume of the country's imports and exports reached US$ 1.1548 trillion for the year. Exports accounted for $593.4 billion, up 35.4% year-on-year, and imports amounted to $561.4 billion, up 36%, yielding a trade surplus of $32 billion. The export mix continued to improve, with rapid increases in the export of electromechanical products and new and high technological products. China's foreign reserves totaled $609.9 billion at the end of 2004. We made more and better use of foreign capital, with the amount of foreign direct investment actually used over the past year totaling $60.6 billion, an increase of 13.3%. Investment in the service sector continued to increase, and the number of R&D centers and regional headquarters established by multinational companies in China increased significantly. Further progress was made in implementing the "go global" strategy. Implementation of the Closer Economic Partnership Arrangement between the mainland and Hong Kong and between the mainland and Macao went smoothly.

5. Undertakings in science and technology, education, culture and health developed rapidly, and further progress was made in ecological conservation and environmental protection. More major advances were made in basic research and research in strategic hi-tech fields. We improved the national innovation system and the science and technology infrastructure and became better able to make industrial innovations. We organized the industrial application of such high technologies as the next generation of the Internet, third-generation mobile communications, biotechnology, modern agriculture, and new materials. A number of national hi-tech industrial bases in the fields of biology and software were established. Steady progress was made in the research and development of major equipment and key industrial technologies. Important progress was made in independently developing feeder aircrafts and collaborating with international partners to manufacture them. Education experienced rapid development. More people benefited from the plan to make nine-year compulsory education basically universal and basically eliminate illiteracy among young and middle-aged adults. Senior middle school education was expanded, and enrollment for secondary vocational and technical education continued to increase. The number of students receiving all kinds of higher education exceeded 20 million.

We improved the public health system and strengthened our population and family planning work. We basically completed work on 9 provincial-, 241 prefectural- and 1,410 county-level disease prevention and control centers. Construction was begun on 290 emergency medical centers and 2,074 communicable disease clinics, some of which were completed and put into use. Hospital facilities were improved in 3,787 towns and townships in key AIDS and snail fever prevention and control counties and in counties with cooperative medical care pilot programs in the central and western regions. The natural population growth rate was 5.87??.

Further progress was made in developing urban and rural cultural facilities. We continued to improve county libraries and cultural centers, as well as radio, television and film facilities in rural areas. We put more effort into building major national cultural projects and protecting our natural and cultural heritage. We launched extensive fitness programs for the general public, and Chinese athletes did well in competitive sports. We made steady progress in building Olympic venues.

Efforts to protect the environment and improve the eco-system were intensified. We sped up the implementation of projects to prevent and control water pollution in such key areas as the valleys of the Huaihe, Haihe and Liaohe rivers and Taihu, Chaohu and Dianchi lakes and the Bohai Sea, thereby improving water quality in some of those areas. Greater efforts were made to prevent geological disasters in the Three Gorges Reservoir area and to control pollution caused by urban household wastewater, industrial wastewater, hazardous wastes, and sulfur dioxide emissions from thermal power plants in the areas affecting the reservoir. Efforts were accelerated to control pollution along the east route of the South-to-North Water Diversion Project. More urban sewage was treated, and more industrial solid wastes were comprehensively utilized. Notable achievements were made in protecting natural forest resources, in improving the key shelter forests in Northwest, Northeast and North China and the middle and lower reaches of the Yangtze River, and in protecting nature reserves and wild animal and plant species.

6. Further progress was made in employment and social security work, and people's lives continued to improve. A total of 5.1 million laid-off urban workers found new jobs. We raised subsistence allowances for urban residents in some areas and basic old-age pensions for workers retiring from enterprises. The numbers of urban residents who were covered by basic old-age, basic medical, unemployment and worker's compensation insurance were 163 million, 124 million, 106 million and 68.23 million, respectively. Urban per capita disposable income was 9,422 yuan, an increase of 7.7% in real terms. Rural per capita net income was 2,936 yuan, up 6.8% in real terms. The numbers of poverty-stricken and low-income rural residents were reduced by 2.9 million and 6.4 million respectively at the end of 2004 compared to the numbers at the end of 2003.

While fully affirming our achievements, we realize that we have only partially achieved our goals in strengthening and improving macroregulation and that although outstanding conflicts and problems in our economic activities have been alleviated, they have yet to be fundamentally resolved and there are still numerous obstacles to maintaining steady and rapid economic development. First, the agricultural infrastructure remains weak, which severely restricts our ability to increase the acreage sown to grain and the yield per unit area, and climatic conditions are unpredictable. All this makes it very difficult to continue to increase grain production and rural income. Second, there are too many fixed asset investment projects under construction, and too many new ones are being started. The driving force behind investment growth is strong, and investment demand could return to excessive levels. Third, there are tight constraints on resources and the environment, and coal, electricity, petroleum and transportation are still in short supply. There is significant inflationary pressure. Environmental pollution remains serious in some areas. Fourth, rural education, health, culture and other social undertakings fall far short of what is needed for development and improved living standards in rural areas. Fifth, the employment situation is gloomy. The income gap between some members of society is too wide, and some low-income people lead difficult lives. Sixth, deep-seated conflicts in economic and social development have yet to be fundamentally eliminated. The economic system is unsound, the economic structure is irrational and the pattern of economic growth is too crude. We all need to adopt proactive measures to solve these problems.

II. Overall Requirements and Targets for Economic and Social Development in 2005

The year 2005 is crucial for consolidating and building upon macroregulatory achievements and maintaining good momentum in economic and social development, and it is also important for fulfilling the Tenth Five-Year Plan and laying a solid foundation for the Eleventh Five-Year Plan. The overall requirements for economic work in 2005 are: to take Deng Xiaoping Theory and the important thought of Three Represents as our guide; to conscientiously follow the guiding principles defined at the Sixteenth National Congress of the CPC and the Third and Fourth Plenary Sessions of its Sixteenth Central Committee; to comprehensively implement a scientific outlook on development and steadfastly give priority to development in the Party's governance and rejuvenation of the country; to further increase our ability to steer the socialist market economy; to strengthen and improve macroregulation; to work hard to advance reform and opening up; to accelerate economic restructuring and change the pattern of economic growth; to make the most of this period of important strategic opportunities; and to bring about all-round, balanced and sustainable development of the economy and society.

Our main targets for national economic and social development in 2005 are as follows.

- GDP growth around 8%. Here are the main factors contributing to the determination of this growth rate. First are the considerations of necessity. We need to maintain rapid economic growth while optimizing the economic structure, improving economic returns and avoiding excessive demand on resources and the environment. This is altogether essential in order to make the most of this period of important strategic opportunities, increase our overall national strength and realize the objective of building a moderately prosperous society in all respects. This will also help create more jobs, promote reforms and maintain social stability. Second are the considerations of possibility. Supplies of energy, raw and processed materials, and transportation have increased significantly in the past two years, but supply still lags far behind demand for coal, electricity, petroleum and transportation. Because of the fairly large scale of China's economy and the crude manner of its economic growth, an excessively high growth rate can put too much pressure on resource supply and environmental protection efforts and economic operations will be stretched even tauter, increasing the severity of our problems. Third are the considerations related to macroregulation. An appropriate growth rate will guide everyone to focus on making structural adjustments, deepening reforms and changing the pattern of economic growth in accordance with a scientific outlook on development, while repressing the tendency to recklessly compete for the highest growth rate. The target of around 8% is for China's overall economic growth. Local authorities should set appropriate targets based on local conditions.

- Creating 9 million more jobs for urban residents and confining the registered urban unemployment rate to 4.6%. This year 11 million urban residents, including those entering the workplace for the first time, ex-servicemen and college graduates, need to find employment. There are now 13 million unemployed and laid-off urban workers, and large numbers of surplus rural laborers need to find work in urban areas. Employment pressure is therefore still intense. Estimates based on the relationship between economic growth and job creation show that by adhering to a vigorous employment policy, the country should be able to create 9 million more jobs this year. Given that we will basically incorporate subsistence allowances for workers laid off from state-owned enterprises into the unemployment insurance system this year, the registered urban unemployment rate at the end of 2005 is expected to be somewhat higher than last year.

- Keeping the rise in the consumer price index below 4%. There are still some factors driving consumer prices up this year. First, supplies of coal, electricity, petroleum and transportation are still tight and the prices of the means of production remain high. This will put upward pressure on the prices of downstream products and can gradually affect the prices of consumer goods. Second, high prices for petroleum and raw and processed materials in the international market will cause prices to rise in the domestic market. Third, because some local authorities postponed adjusting prices on some items last year, a number of price problems have arisen in public utilities and service industries. Fourth, progress in the reform of factors of production such as capital and land and increases in the pay scales for labor will drive up the consumer price index somewhat. At the same time, the government will continue to strengthen and improve macroregulation, appropriately control money and credit, and curb the excessively rapid increase in fixed asset investment, which will help check the rise in the prices of the means of production. In addition, last year's price increases will have a small ripple effect this year. This comprehensive analysis of factors affecting price levels shows that this year's projected rise in the consumer price index should be about the same as last year's actual rise.

- Increasing the total volume of imports and exports by 15% and basically balancing imports and exports. The global economy and global trade are set continuing growing in 2005. Moreover, China has now lifted all controls over the right to engage in foreign trade. This should inject new vitality into China's exports and increase export volume. The domestic economy will keep growing rapidly, so demand for imports should also continue to expand. The combined volume of imports and exports should continue to increase rapidly this year but there are quite a few factors that could prevent the volume from growing as rapidly as last year. The main ones are stubbornly high international oil prices and rising prices for the means of production, both of which increase production costs for enterprises. In addition, export volume has grown considerably in recent years to a very high level, and international trade friction is intensifying. Setting the target at 15% should help push enterprises to accelerate change in the pattern of their foreign trade growth, improve their import and export mix, and raise the quality and level of their foreign trade growth.

- Continuing to increase urban and rural incomes. The per capita disposable income of urban residents and the per capita net income of rural residents are expected to increase by about 6% and 5% respectively in real terms this year. We arrived at these figures by taking the following major factors into consideration. The national economy will keep growing rapidly this year, and the government will take further measures to increase agricultural production and rural incomes. Continued improvement in the economic performance of enterprises can be expected. The government will be devoting more resources to social security and poverty alleviation work. All these factors will help increase urban and rural incomes. At the same time, there are quite a few difficulties and uncertainties that could slow the rise in personal incomes, particularly rural incomes. Increasing personal incomes leads to expanded consumption. Continued improvement in the pattern of consumption and the consumption environment this year should also contribute to steady and rapid growth of consumption demand, resulting in an expected 12.5% increase in retail sales of consumer goods for the whole country.

- Accelerating development of undertakings in science and technology, education, culture, health and sports. We will earnestly implement the strategy of rejuvenating China through science and education and full use of talent people, and adopt effective measures to increase funding for science and education, focusing on improving the overall quality of the national economy and enhancing competitiveness and the capacity for independent innovation. Continued progress should be made in developing major science and technology infrastructure facilities and key industrial technologies as we strive to bring spending on R&D up to 1.5% of GDP. We will extensively promote competence-oriented education and improve the structure of education. Significant progress should be achieved in rural education, particularly in efforts to make nine-year compulsory education basically universal and basically eliminating illiteracy among young and middle-aged adults in the western region. The gross enrollment ratio at senior middle schools should reach 50%, and plans call for enrolling 4.75 million undergraduate students and 370,000 graduate students in regular institutions of higher learning. We will finish setting up a disease prevention and control system, basically complete work to set up a medical system for handling public health emergencies, and steadily develop pilot projects to set up a new rural cooperative medical care system. We will make tap water available for more of the rural population. We will complete the project to build county-level libraries and cultural centers and extend radio, television and film coverage to more areas, and continue to develop other social undertakings to satisfy the spiritual and cultural needs of the people.

- Making more efficient use of resources and continuing progress in ecological conservation and environmental protection. We will continue to reduce energy and resource consumption, focusing on conserving energy, water, land and materials. We will make further strides in the development of a recycling economy in key industries such as the metallurgical, nonferrous metals, coal, chemical and building materials industries and light industry and in key areas such as economical use of mineral resources, recycling of renewable resources and green remanufacturing. We will strive to reduce energy consumption per 10,000 yuan of GDP and the total discharge of some major pollutants and continue to increase the proportion of industrial solid waste that is comprehensively utilized and the percentage of urban sewage that is properly treated. We will improve more land affected by soil erosion and grassland suffering from desertification, degeneration or alkalization and restore the ecological environment in more mining areas.

- Continuing to keep the birthrate low and improve the health of newborns. The natural population growth rate should be confined to 7??. This figure was set higher than the actual growth rate for last year after taking into consideration several major factors. China has a large population, which makes keeping the birthrate low a monumental task. Due to shifts in the age distribution of the population, more women are now at childbearing age, which will create upward pressure on the birthrate. It is still hard to carry out family planning work among the floating population and it is extremely difficult to maintain a low birthrate in rural areas and in poverty-stricken areas in the central and western regions. In addition, we must continue to improve prenatal and postnatal care, improve our ability to prevent birth defects and provide better reproductive health services to address the problem of the high rate of birth defects in some areas.

Under a socialist market economy, targets for economic and social development serve as guidelines that indicate to society the macroregulatory intentions of the government. In setting such targets, both necessity and feasibility must be taken into consideration and an appropriate amount of leeway must be included. At the same time, the targets are dynamic and can be adjusted in line with changes in the economic environment and development trends.

In order to attain the targets for this year's economic and social development and maintain steady and rapid national economic growth, it is essential to follow a scientific outlook on development to guide social and economic development and to adhere to this outlook in all aspects of social and economic development and reform and opening up. We will be working on the following five tasks. First, we will continue to strengthen and improve macroregulation by paying more attention to dealing with different industries on a case-by-case basis and encouraging some to expand and others to contract. In addition, we will eliminate more unsound destabilizing factors in economic activities and safeguard, guide and utilize the enthusiasm of all sectors of society for accelerating development. Second, we will continue to make reform and opening up the driving force for development through greater use of reform to remove structural and mechanical obstacles to economic and social development, striving to make breakthroughs in some key areas and links. Third, we will continue to make restructuring the main thrust of our work and center on improvement in the overall quality and competitiveness of the national economy by promoting technological progress and optimizing and upgrading the industrial structure. Fourth, we will continue to take a new road to industrialization, accelerating change in the pattern of economic growth, developing the recycling economy and working hard to build a conservation-minded society. Fifth, we will continue to put people first by conscientiously working to solve problems affecting the vital interests of the people, constantly improving the lives of urban and rural residents and striving to build a harmonious socialist society.

III. Principal Tasks and Measures for Economic and Social Development in 2005

To fulfill the targets for national economic and social development for this year, we will need to pay particular attention to the following tasks.

1. Continuing to strengthen and improve macroregulation to maintain steady and rapid economic growth. We must ensure the proper focus and intensity of regulation, give full play to the role of market forces and pay more attention to economic and legal means in consolidating and building on our achievements in macroregulation.

We will follow prudent fiscal and monetary polices and ensure the correct orientation of macroeconomic policies. 1) We will appropriately cut the budget deficit, concentrating on adjusting the structure of expenditures. Total national revenue in the budget for 2005 is 2.9255 trillion yuan, and total expenditures are 3.2255 trillion yuan, leaving a deficit of 300 billion yuan in the central budget, 19.8 billion yuan less and a lower proportion of GDP than that for 2004. Tax collection and management will be tightened in accordance with the law to ensure a steady increase in revenue. Increases in general spending must be strictly held in check, but transfer payments will be increased for the central and western regions, especially for education, health and culture in rural areas and the normal operation of county and township governments. Investment will also be increased for efforts to solve the problems facing agriculture, rural areas and farmers; promote social development and balance the development of different regions; expand employment; improve the social security system; and guarantee basic living conditions for low-income people. Greater support will be given to exploitation of important mineral resources. 2) We will appropriately reduce the issue of long-term treasury bonds for development and continue to adjust the investment structure for bond funds. We plan to issue 80 billion yuan worth of long-term treasury bonds in 2005, 30 billion yuan less than last year, while increasing allocations from the central budget for investment in regular development projects by 10 billion yuan. Funds from the sale of these bonds will be used mainly to accelerate the development of the agricultural infrastructure and major water control projects; support grain production; and increase investment in elementary education, the public health system, ecological conservation and environmental protection, resource conservation and development of the recycling economy. Funds will also be used to support key projects to develop the western region, revitalize Northeast China and other old industrial bases and boost development of the central region. In addition, funds will be used to ensure that bond-financed projects now under construction are completed as scheduled. These projects mainly include the Qinghai-Tibet Railway, the South-to-North Water Diversion Project, and the projects to harness the Huaihe River, reinforce dangerously weak reservoirs, ensure safe drinking water supplies in rural areas, build highways linking county seats and other roads in rural areas and solve the problem of sinkholes in coalmining areas. We will continue to strengthen inspection and oversight of construction projects and further improve investment returns. 3) We will use monetary policy instruments flexibly to control monetary aggregates and the scale of credit at a reasonable level. The broad money supply (M2) and the narrow money supply (M1) will both increase by 15% in 2005. We will tighten and improve window guidance for commercial banks and guide financial institutions to optimize their credit structure and improve services. We will control the margin of increase in medium- and long-term loans and exercise strict control over loans for projects that do not conform to relevant state industrial policies, particularly those that consume excess quantities of energy and resources and are highly polluting. Support will be given to projects that conform to state industrial policies and meet market access requirements, and loans will be granted for working capital to enterprises that are profitable, make marketable products and expand employment. We will tighten financial oversight and management, and vigorously yet prudently handle all types of financial hazards to guard against and defuse financial risks.

We will improve coordination of macroeconomic policies and continue to curb excessively rapid growth of fixed asset investment. Investment in fixed assets throughout the country is expected to increase by 16% in 2005. We will further strengthen coordination of industrial, credit and land policies and continue to exercise strict control over the two valves of approval for land use and availability of credit. We will accelerate formulation, revision and implementation of policies and plans for key industries and criteria for market access in terms of energy and material consumption, environmental protection and safety. We will carry out all regulatory policies already adopted and prevent a return to overheated investment in the iron and steel, cement, electrolytic aluminum, calcium carbide, coke and ferroalloy industries. We will promptly solve the problem of too many thermal power plants being built and irregularities in their construction. We will continue to successfully carry out follow-up work subsequent to screening construction projects. We will pay particular attention to optimizing the structure of investment and guide non-government investment into weak links that require faster development.

We need to continue to strengthen regulation of the economy and alleviate tight supplies of coal, electricity, petroleum and transportation. 1) We will organize and guide the efforts of enterprises to increase effective supply without compromising production safety. Focusing on developing large coalmines, we will put more effort into expanding coal transport facilities such as railways and embarkation ports in the north, and we will continue to support renovation and upgrading of coalmines for production safety. We will accelerate major projects for liquefying coal, exploiting petroleum and natural gas, generating power by natural gas, and utilizing renewable energy sources, and we will rationally develop hydroelectric power. We will intensify the development of inter-regional power grids. We will implement a mechanism for coupling the price of coal to that of electricity and encourage coalmines to negotiate medium- and long-term contracts with power plants. 2) We need to continue to improve the demand side management of power. We will implement a principle of guaranteeing power supply to some sectors and restricting it for others to ensure the orderly supply and rational use of power. We will improve the policy of adjusting the charge for power in response to changes in demand and charging different prices for different users to promote power conservation. 3) We need to rationally arrange transport availability, giving priority to transport of grain, coal, petroleum, fertilizers and other key goods and materials.

We will improve our price-related work and keep prices basically stable. We will continue to make monthly reports on the consumer price index. The government will plan the timing and magnitude of price increases for public goods and services in light of local economic development and what the people can afford. We will improve the price monitoring system and the early warning and emergency response mechanism for unusual price fluctuations. We will increase roving inspections of charges for coal, electricity, petroleum and transportation and intensify oversight and review of charges related to agriculture, medicine and education. We will punish price fraud and gouging more severely and earnestly rectify arbitrary fees in the real estate industry.

2. Increasing agriculture, especially grain production, and raising farmers' incomes. We will continue to coordinate development of urban and rural areas, promote agriculture through industry, develop rural areas through urban development, and follow a principle of giving more, taking less and loosening control. We will adopt comprehensive measures to steadily increase grain output, agricultural efficiency and rural incomes. 1) We need to improve and strengthen policies for supporting agriculture. We will further extend the exemption of the agricultural tax to cover a total of 592 key counties in the country's program to combat poverty through development, while reducing tax rate by a big margin in other areas. The livestock tax will be totally exempted. Special funds will be allocated from the central budget to increase transfer payments to major grain-producing counties, particularly to counties and townships with financial difficulties. We will improve the system of directly subsidizing grain producers and increase subsidies for the purchase of improved crop strains and agricultural machinery and tools. We will establish a mechanism to balance the interests of major grain-producing and grain-purchasing areas. 2) We need to effectively increase the overall productive capacity of agriculture. The strictest possible system for protecting farmland will be implemented so that the area of primary farmland does not diminish, primary farmland is not converted to other uses and its quality does not deteriorate. We will strive to expand the acreage of grain production. We will conscientiously implement the policy on contracting farmland and improve the system for farmland requisition and expropriation. Investment will be increased to promote projects to industrialize production of high-quality grain varieties, develop large commercial grain bases, and improve low- and medium-yield farmland. We will give more support to the development of small water conservancy facilities and expand the scope of six categories of small rural projects [water-efficient irrigation, potable water supplies, road building, methane production facilities, hydroelectric plants and pasture enclosure, tr.]. We will accelerate the upgrading of water conservation projects in large irrigated areas and develop dry farming and water-saving irrigation. We will continue to support projects for developing superior seed varieties and for protecting plant species and fertile land. We will accelerate establishment of the system of agricultural standards and the system for quality and safety inspection of agricultural products. 3) We need to accelerate structural adjustments in agriculture and the rural economy. We will formulate guiding policies, work out plans and carry out demonstration projects to differentiate agricultural production by region on the basis of local advantages, make agricultural production specialized, industrialize agricultural operations, and expand the production of agricultural products with distinctive local characteristics. We will greatly increase investment in agricultural research, enhance our ability to make innovations in agricultural science and technology, and improve the system for expanding application of agricultural technologies. We will work harder to develop improved crop strains and promote their application. We will continue to carry out projects for developing superior breeds and varieties in the livestock, poultry and aquaculture sectors and establish a sound system to prevent and control the spread of animal epidemics. Great efforts will be put into developing animal husbandry. We will vigorously develop secondary and tertiary industries in rural areas, support the agricultural product processing industry and improve the system for distributing agricultural products. 4) Prices affecting agriculture need to be kept stable. We will continue to set minimum purchase prices for important grains in short supply in major grain-producing areas. We will accelerate establishment of a national food security warning system. We need to tighten control over grain imports and exports and also use grain reserves to regulate grain prices to keep them at a reasonable level. We will carry out all our policies for promoting production of fertilizers and other means of agricultural production and stabilizing their supply to prevent excessively rapid price rises. 5) We need to increase the sources of rural incomes. We will press ahead with urbanization and promote intra-county economies in order to create more jobs for rural workers. We will provide more vocational training to rural laborers. We will improve the employment environment and working conditions for migrant workers in cities and develop a sound mechanism to ensure timely payment of their wages. We will continue to give people work in place of relief subsidies, resettle the households displaced for ecological reasons in light of local conditions, and alleviate rural poverty through development more effectively.

3. Working hard to adjust the industrial structure and accelerating industrial upgrading. We need to strengthen and improve macroregulation to promote industrial restructuring to meet the requirements of the new road to industrialization we are taking. 1) We will accelerate the rejuvenation of the equipment manufacturing industry. Policies will be promptly initiated to encourage this work. We will develop key technologies for which we hold intellectual property rights through major state projects. We will focus on domestically manufacturing such major technical equipment as nuclear power generators, ultra-supercritical power generating units, direct-current transmission equipment, clean high-efficiency power equipment, new types of rail transit carriages, entire large-scale petrochemical facilities, and large-scale thin plate cold/hot rolling equipment. We will improve our ability to design, develop and produce complete sets of basic technical equipment such as digitally controlled machine tools and automatic control systems, as well as new types of agricultural machinery and other equipment that conserves energy, water and materials and is environment-friendly, and we will develop famous name brands of such equipment. We will accelerate development of the major shipbuilding infrastructure and shipping facilities around the Bohai Sea and at the estuaries of the Yangtze and Pearl rivers. We will work hard to enhance our capability for independent innovation and our core competitiveness and support enterprises in the development of key technologies with proprietary intellectual property rights, with the emphasis on improving capacity to independently develop major equipment and basic software. 2) We will energetically develop new and high technology industries. Innovations in key technologies in some important areas will be vigorously promoted. We will strengthen and enlarge our information industry. We will nurture bioindustry and accelerate development of the aerospace industry. We will continue to carry out major special projects to industrialize seawater desalination and automobile electronics and other key technologies. We will guide and support the development of new materials, new energy resources and advanced environment-friendly industries. We will build national engineering research centers for clean production technology and the safe production and efficient use of coal. We will promptly organize research and development of rapid transit railways, large-capacity hi-tech ships and other major technologies and equipment. We will vigorously yet prudently promote e-government, which includes a taxation management information system, a customs management information system, a financial management information system, an agricultural management information system, and a quality supervision management information system. We will diligently develop e-commerce and expedite the application of information technology in such key areas as foreign trade, petrochemicals, metallurgy and machine building. We will continue to introduce information technology in large leading enterprises. We will develop a system to ensure network and information safety. 3) We will promote optimization and upgrading of traditional industries. We will promptly publish and implement policies and plans for the steel, electrolytic aluminum, cement and chemical fertilizer industries. We will support reorganization and association of large steel enterprises to establish bases for manufacturing high-quality steel products. While controlling the total output of electrolytic aluminum, we will combine the elimination of outmoded technologies and equipment with appropriate development of projects that have a stable supply of oxidized aluminum as raw material and adequate electricity for production, and accelerate development of existing large aluminum bases. We will continue to develop projects for producing new dry-process cement that meet production scale requirements and encourage trans-regional development, reorganization and association of large cement enterprises. We will promote development and use of renewable energy resources and carry out the experiments for using gasohol in automobiles. We will clear up and rectify projects that damage and waste resources and pollute the environment. 4) We will accelerate development of service industries, giving priority to new types of services such as modern finance, modern logistics, and information services. We will vigorously develop industries with great demand potential, such as tourism, culture and sports, to create new areas of economic growth. We will accelerate the development of intermediary services, such as consulting and legal and technical services. We will standardize and upgrade traditional service industries and encourage and support the development of community services.

4. Vigorously changing the way the economy grows and pushing ahead with resource conservation and environmental protection. 1) We need to emphasize conserving energy, water, land and materials. We will fully implement the Medium- and Long-Term Plan for Conserving Energy Resources, quickly formulate the Measures for Conserving Petroleum and the Regulations on Fully Utilizing Natural Resources, and revise the Measures for Conserving Electricity. We will promptly formulate and improve energy efficiency standards for products that consume energy and water quotas for industries that depend heavily on water, and introduce a system for eliminating products that consume excessive energy. We will formulate and publish a policy outline for developing energy- and water-efficient technologies, to support the development and application of new technologies, processes and equipment that help conserve energy, reduce consumption of materials, and make comprehensive use of resources. Focus on reducing consumption of energy resources, particularly oil, we will use advanced applied technologies more quickly to upgrade traditional industries and concentrate on technological upgrading of the metallurgical, nonferrous metals, petrochemical, building materials and paper industries to help save energy and water. We will work out policies for developing energy-efficient, environment-friendly automobiles, new wall materials and energy-efficient housing. 2) We will improve planning and management of mineral resource exploitation. We will reform the system of resource exploitation, promptly improve the compensation mechanisms for the exploitation and use of resources and for restoration of the environment, and improve evaluation of risks and potential involved in energy resource and mineral deposit exploitation. We will put a complete stop to indiscriminate mining and serious waste and environmental destruction in the mining of energy resources and minerals. We will accelerate the development and use of new energy resources and renewable energy resources, and we will support the use of coal gangue, garbage and straw to generate power. We will step up the research and appraisal of oil shale and promote its exploitation and utilization. 3) We will accelerate development of the recycling economy by formulating strategic objectives, evaluation criteria, policies and measures for this purpose. We will support the development and dissemination of technologies for conserving and producing substitutes for natural resources, recycling, remanufacturing, and zero-discharge of pollutants. We will carry out pilot demonstration projects related to the recycling economy and support a range of major projects that help save energy and water, more fully utilize resources and develop the recycling economy. We will expand publicity, education and training to promote development of the recycling economy and build a conservation-minded society. 4) We will effectively strengthen environmental protection. We will continue to promote clean production and formulate evaluation criteria for clean production in major industries. We will control the total amount of pollutants released into the environment. We will intensify control of sulfur dioxide discharged by thermal power plants, build more clean power generating facilities and develop clean coal technology. We will intensify measures to prevent and control pollution in the watersheds of the Huaihe, Haihe and Liaohe rivers and Taihu, Chaohu and Dianchi lakes, the Bohai Sea, the Three Gorges Reservoir area and the Yangtze River above it, and along the routes of the South-to-North Water Diversion Project, as well as pollution from major projects. The Yellow and Songhua rivers will be classified as key areas for pollution control. We will formulate and implement a plan for controlling industrial wastewater in the Huaihe River valley. We will improve the environmental quality in 113 key environmental protection cities. We will establish a sound system of fee collection for urban garbage and sewage treatment and speed up development of facilities for treating and recycling household garbage and sewage in urban areas.

5. Making full use of the strengths and initiative of all regions and promoting coordinated development of their economies. We will work vigorously to ensure that the eastern, central and western regions complement and stimulate each other and develop together. 1) We will continue with the development of the western region. We should continue doing a good job in developing major projects in transportation, energy resources and water conservancy as well as in rural infrastructure. We should build on our achievements in returning cultivated land to forests and return grazing land to grassland more quickly. We should strengthen bases for producing energy, processing minerals and producing petrochemical and coal chemical products. We should promote the development of tourism and the processing of local farm and livestock specialties. We will support accelerated development of social undertakings in the western region. The central government will increase general transfer payments and subsidies for specific projects to local governments in the region. A permanent, stable source of funds for development of the western region will be promptly established. We will raise the quality of the labor pool in the region and improve laws and regulations concerning the region. We will promptly draft the Law to Promote Development of the Western Region and work out policies and measures for developing a skilled workforce there. 2) We will continue to implement the strategy for revitalizing Northeast China and other old industrial bases. Structural and mechanical innovations will be accelerated there. We will vigorously develop modern agriculture and consolidate the strategic position of Northeast China as a national base for commercial grain production. We should promote upgrading of the steel, petrochemical and equipment manufacturing industries and the restructuring and transformation of key areas, key competitive industries and key enterprises and reorganization of their assets. We will establish mechanisms for compensating for resource depletion and aiding declining industries, and promote a shift away from resource dependence for cities with resource-based economies. 3) We will promptly formulate policies and measures for boosting development of the central region. We will support the region's development of agriculture, particularly in the main grain-producing areas. We will build more transport hubs and bases for producing energy and important raw materials and accelerate the development of competitive manufacturing and new and high technology industries. We will create a large market in the central region to greatly stimulate the flow of goods. 4) We will guide acceleration of the development of the eastern region. The region should further increase its overall economic strength and international competitiveness and better coordinate urban and rural development, development among different localities, economic and social development, and development of man and nature. 5) We will support and promote development in the old revolutionary base areas, ethnic minority areas, border areas and poverty-stricken areas. We will give them more support in terms of transfer payments, investment and location of major development projects.

6. Vigorously promoting all reforms to provide fresh impetus to economic and social development. We will accelerate the reforms for developing the market economy, focusing on solving deep-seated problems with a bearing on the overall situation, and strive to make breakthroughs in some key areas and key links. 1) We will continue the transformation of large state-owned enterprises into stock companies, improve their corporate governance and change the way they operate. We will energetically develop large enterprise groups that are internationally competitive. We will relieve enterprises of the obligation to operate social programs, and continue to carry out policy-based closures and bankruptcies of enterprises. We will standardize procedures for the transformation of the structure and transfer of the ownership of enterprises to promote the orderly movement and prevent the loss of state assets, and protect the lawful rights and interests of workers. 2) We will promptly improve the oversight and management system for state assets and establish an incentive and constraint system. We will institute in all enterprises under the central government a system of responsibility for annual performance and a system in which enterprise leaders are held responsible for enterprise performance during their terms of service. We will accelerate the establishment of a budgetary system for the management of state capital. 3) We will improve measures for reforming the telecommunications, electric power and civil aviation industries, formulate plans for reforming the postal system and the railway system in a timely fashion, and accelerate commercialization of water and gas supplies, sewage and refuse treatment and other urban public utilities. 4) We will conscientiously implement Some Opinions of the State Council on Encouraging, Supporting and Guiding the Development of Individually-owned Businesses, Private Enterprises and Other Components of the Non-public Sector of the Economy (GF [2005] No. 3). We will formulate supporting policies to encourage the non-public sectors to participate in the reorganization of state-owned enterprises and invest in infrastructure development, public utilities and other industries and areas. We will continue to implement the Law on Promoting Small and Medium-sized Enterprises. 5) We will energetically continue the reform of the fiscal and tax systems. Fiscal systems at and below the provincial level will be improved, and transfer payments to them will be increased. On the basis of a review of the VAT reform that is being carried out in Northeast China on a trial basis, we will extend the reform nationwide. 6) We will continue instituting the shareholding system in state-owned commercial banks and accelerate the development of a long-term mechanism for their risk management. We will continue the reform of shareholding commercial banks and policy banks. We will intensify our efforts to solve problems related to property rights and management systems that have cropped up in the reform of rural credit cooperatives, and standardize the development of small and medium-sized financial institutions. We will steadily deregulate interest rates and make them subject to market forces, improve the mechanism for determining the exchange rate for the Renminbi, and keep it basically stable at a proper and balanced level. We will continue to promote the reform and opening up of the capital market and its steady development. We will issue more corporate bonds and expand financing channels for small and medium-sized enterprises. 7) We will conscientiously implement the decision on reforming the investment system and promptly formulate and optimize supporting measures. We will standardize the systems for approving and recording projects funded by enterprises and truly give enterprises independent investment authority. We will standardize the scope and conduct of government investment to make government investment decisions more scientific and democratic. We will institute an advance notification system for government projects and promptly establish a system of accountability for government investment. The macroregulatory system for investment will be adapted to the new circumstances, and a system of investment oversight and management will be established. We must study and resolve problems as soon as they emerge in the course of reform. 8) We will energetically develop capital, land, technology and labor markets. The property right exchanges will be standardized and developed. We will energetically develop a social credibility system. 9) We will continue to deepen pricing reform and improve the pricing mechanisms for water, electricity and services. Costs will be subject to stringent oversight and examination. The public hearing system for government decisions on prices will be improved to make the price setting more scientific.

7. Striving to raise the quality and level of opening up and making better use of both domestic and international markets and resources. 1) We will accelerate change in the way our foreign trade grows. We will integrate our foreign trade with efforts to upgrade the industrial structure and product mix, improve our technologies and equipment and enhance our capacity for independent research and development. We will improve the export tax rebate mechanism. We will promote the transformation and upgrading of the processing trade. We will implement a name-brand strategy and support and increase the export of products and services covered by our own proprietary intellectual property rights and bearing our own brand names. We will also improve the quality and raise the grades of our traditional export commodities and standardize the way we engage in foreign trade. We will carefully organize the import of energy, raw and processed materials, key technologies and major equipment that are badly needed and in short supply in China. 2) We will make even better use of foreign funds. We will encourage foreign investors to invest in new and high technology industries, advanced manufacturing industries, modern services, modern agriculture and environment-friendly industries and to participate in the reorganization and technological upgrading of state-owned enterprises. We will encourage and attract multinational corporations to set up R&D and purchasing centers, regional headquarters and advanced manufacturing bases in China. We will gradually open banking, insurance, securities, commerce, telecommunications, tourism and other service industries to foreign competition. We will make good use of loans from international financial organizations and foreign governments, tighten control over the size of foreign debts, optimize the foreign debt structure and guard against risks. 3) We will accelerate the implementation of the "go global" strategy. We will strengthen planning and industrial policy guidance for China's investment abroad, improve supporting fiscal, tax, financial, insurance and foreign exchange policies, and encourage qualified enterprises to invest abroad. We will cement and develop bilateral and multilateral economic relations with other countries and take an active part in regional economic cooperation.

8. Doing employment and social security work well and constantly improving people's lives. 1) We will continue implementing a vigorous employment policy and solve employment problems through development. We will vigorously develop tertiary industry, small and medium-sized enterprises and labor-intensive industries that employ large numbers of workers in order to generate more jobs. The government will provide better employment guidance, training and services. An employment monitoring and early warning system will be established. We will do a good job in making overall arrangements for the employment of laid-off workers, urban residents entering the labor force for the first time, college graduates, demobilized servicemen and surplus rural laborers shifting to nonagricultural jobs. We will fully implement the policies and measures for supporting employment and reemployment. Governments at all levels will increase funding for reemployment. Work to institute a public employment service system will be accelerated. More support will be given to areas, industries and population groups with reemployment difficulties. We will also standardize procedures by which enterprises lay off workers. 2) We will accelerate the establishment of a social security system in line with the level of economic development. We will continue our efforts to provide the "two guarantees" [guarantee of a basic living allowance for workers laid off from state-owned enterprises and guarantee that the pensions of retirees are paid on time and in full, tr.]. At the same time, we will strive to incorporate subsistence allowances for workers laid off from state-owned enterprises into the unemployment insurance system as scheduled. We will improve the system of basic old-age pensions for urban enterprises that combine contributions from various sources with personal retirement accounts, while gradually ensuring that personal retirement accounts are fully funded. We will extend coverage of social insurance to more employees of non-publicly owned enterprises and persons without fixed employment. We will promptly formulate a plan for reforming the old-age pension system for government bodies and institutions. We will look for ways to develop a rural social security system where conditions permit. The urban and rural social relief systems will be improved, and the system of providing subsistence allowances to needy urban residents will be improved and standardized. We will also improve the system for providing childless and infirm rural residents with food, clothing, medical care, housing and burial expenses. We will continue doing a good job in alleviating poverty through development. Funding for poverty alleviation programs will be increased and the funds will be properly managed and used. 3) We will work hard to increase incomes of urban and rural residents, especially low- and middle-income people. The minimum wage system for urban workers will be improved and strictly implemented, and we will urge enterprises to pay their employees on time and in full. We will appropriately adjust the structure of income distribution. We will standardize the way income is distributed by improving the individual income tax system and strengthening regulation and monitoring of income distribution in monopoly industries. The salary system of government bodies and institutions will be further reformed. 4) We will strengthen the role of consumption in stimulating sustained economic growth. We will work hard to upgrade the consumption pattern by encouraging spending on housing, cars, cultural activities, tourism and fitness. We will introduce fiscal, tax, financial and industrial policies that stimulate consumption. We will accelerate the development of a fund for universal telecommunications service to expand telecommunications services in rural areas. We will continue to improve the consumer environment, focusing on rectifying and standardizing prices for education and medical services. We will severely crack down on the production and marketing of counterfeit and substandard goods and other illegal and criminal economic activities. We will carry out programs to ensure the supply of quality food and medicines, advocate environment-friendly consumption, and strengthen protection of consumer rights and interests. We will energetically develop modern methods of distribution, speed up the building of a social credibility system, and standardize and develop consumer credit.

9. Promoting development of science, technology, education and all other social undertakings and striving to build a harmonious socialist society. 1) We will energetically develop science and technology, which constitute the primary productive force. We will promptly formulate and implement the National Medium- and Long-range Program for Scientific and Technological Development. We will strengthen basic research and research in strategic hi-tech fields and technologies for non-profit application. We will start construction on nine major state science and technology infrastructure facilities including a spallation neutron source and high magnetic field facility, and support original basic research. Another group of state key laboratories will be upgraded. We will work hard to tackle problems in key and general technologies in industrial development and support the assimilation and improvement of imported advanced technologies. We will continue organizing development of electric vehicles, functional genomics and other major hi-tech projects. We will carry forward development of ten industrial technologies, including production safety, environmental protection and resource prospecting technologies. Development of the national innovation system will be strengthened. We will deepen the reform of the science and technology system and continue the reform to classify non-profit research institutes. We will help enterprises enhance their capability to make technological innovations. We will further develop philosophy and the social sciences. Constant efforts will be made to spread scientific knowledge and help the entire population improve their understanding of science. 2) We will give priority to developing education. A new action plan to invigorate education will be fully implemented, and balanced development of all levels and types of education will be promoted. We will improve the management system of rural compulsory education and develop a mechanism to ensure funding for it. Steady progress will be made in making nine-year compulsory education basically universal and basically eliminating illiteracy among young and middle-aged adults in the western region. We will continue to develop modern distance education and renovate dangerous school buildings in rural primary and middle schools, and improve the system of aid for students from indigent families. We will strengthen vocational and continuing education. We will implement a plan for expanding vocational education in the central and western regions to train people with expertise badly needed there. We will continue to carry forward the development and reform of higher education to improve its quality. 3) We will accelerate the development of the public health system. We will finish setting up the system for disease prevention and control and basically complete the work to set up a medical system for handling public health emergencies. We will put more effort into prevention and control of major communicable and endemic diseases, particularly AIDS, snail fever and tuberculosis. We will make the best use of our medical and health resources and optimize their distribution. We will upgrade the health infrastructure in rural areas and train more medical personnel there. We will continue to steadily carry out pilot projects on a new type of rural cooperative medical care system and medical assistance work in rural areas. We will quickly launch pilot reforms of the urban medical service system. 4) We will energetically develop culture, radio and TV, film, the press, publishing and sports. We will develop non-profit cultural undertakings and promote fine traditional Chinese culture. We will work quickly to protect and salvage our fine ethnic cultures, particularly those in danger of being lost to posterity. We will promote the sound development of commercial cultural undertakings. We will develop more cultural facilities and better protect our cultural and natural heritage. We will accelerate the construction of the National Museum of China and other important cultural projects. We will boost "red tourism" [visiting key sites of early CPC history, tr.]. We will continue to carry out projects to extend radio and TV coverage to all rural villages. We will build more family planning facilities in rural areas and strengthen the management of family planning among the floating population. We will do our press and publishing work well. We will promote the sound development of sports and keep preparations for the 2008 Olympic Games on schedule. 5) We will truly maintain social stability. We will pay close attention to and duly solve problems harmful to people's interests arising from acquisition of land, demolition of housing, change in enterprise structure, relocation of people to build reservoirs and labor disputes. Appropriate steps will be taken to resolve the practical problems of impoverished urban and rural people. We will work harder to ensure production safety. Systems and mechanisms for ensuring production safety will be improved and spending on safety equipment will be increased. We will actively work to prevent and properly handle mass disturbances and improve emergency response mechanisms. We will strengthen the prevention and control system for public security, and work hard to investigate, monitor, forecast and control major natural disasters to ensure the safety of people's lives and property.

This year we have other important task to perform, formulating the Eleventh Five-Year Plan for National Economic and Social Development and the Long-Range Program Through the Year 2020.

The tasks for China's reform, development and stability in 2005 are quite difficult and arduous. We must follow the leadership of the Party Central Committee with Comrade Hu Jintao as General Secretary, hold high the great banners of Deng Xiaoping Theory and the important thought of Three Represents, and comprehensively implement a scientific outlook on development. We must work hard with one heart and one mind in a down-to-earth manner to attain the targets and tasks for national economic and social development in 2005.