Dear representatives

Now, on behalf of the State Council, I would like to report on the work of the government to the conference. Please review and provide your opinions to the members of the National Committee of the Chinese People's Political Consultative Conference.

1、 Review of Work in 2011

In the past year, in the face of the complex and volatile international political and economic environment and the arduous domestic reform and development tasks, the people of all ethnic groups in China, under the leadership of the CPC, worked together with one heart and one mind, and made new major achievements in reform, opening up and socialist modernization. The gross domestic product was 47.2 trillion yuan, an increase of 9.2% over the previous year; The public fiscal revenue was 10.37 trillion yuan, an increase of 24.8%; The grain production reached a new historical high of 571.21 million tons; 12.21 million new urban jobs were created, and the per capita disposable income of urban residents and the per capita net income of rural residents increased by 8.4% and 11.4% respectively in real terms. We consolidated and built upon our achievements in responding to the global financial crisis, and got the Twelfth Five-Year Plan period off to a good start.

We accomplished the following in our work last year.

（1） Strengthen and improve macroeconomic regulation, curb rapid price increases, and achieve stable and rapid economic development. We followed a proactive fiscal policy and a prudent monetary policy, and maintained a balance between ensuring steady and robust economic development, adjusting the economic structure, and managing inflation expectations. We paid greater attention to implementing policies with the proper focus, force, and pace; conducted prudent and flexible macro-control on a moderate scale and in a timely fash. Amid worsening inflation expectations worldwide, fluctuating and high prices of major commodities on the world market, significantly higher costs of factors of production at home, and a shortage of some agricultural products, we made ensuring general price stability our top priority in macro-control, pursued policies in an integrated way. In the second half of the year, the instability and uncertainty of the world economy will increase, and there will be some new situations and problems in the domestic economic operation. On the one hand, we will adhere to the basic orientation of macroeconomic regulation and control, maintain the basic stability of macroeconomic policies, and continue to control inflation; On the one hand, timely and moderate pre adjustment and fine-tuning should be carried out to strengthen the coordination and cooperation between credit policies and industrial policies, increase structural tax reduction efforts, focus on supporting the real economy, especially small and micro enterprises, prioritize supporting livelihood projects, especially affordable housing projects, focus on ensuring the funding needs of major national construction and continuation projects, and solve prominent contradictions in economic operation in a targeted manner. We steadfastly tightened regulation of the real estate market and ensured that control policies were fully carried out and achieved real progress. Consequently, speculative or investment-driven housing demand has been significantly curbed, housing prices in most Chinese cities have fallen month on month, and the results of our control measures are beginning to show. We attached great importance to guarding against and eliminating latent risks which exist in the banking and public finance sectors. We fully audited local government debt in a timely manner, and obtained a clear picture of the total amount, due dates, geographic distribution, and causes of the debts local governments incurred over the years.. These debts have played a positive role in economic and social development, forming a large number of high-quality assets; There are also some risks and hidden dangers, especially in some areas with weak debt repayment ability where there are localized risks. We sorted out and standardized these debts, imposed a cap on their increase, and actively yet prudently solved problems related to the repayment of such debts and additional funding for ongoing projects. Government debt in China now is at a controllable and secure level. China's economy as a whole continues to grow as we anticipated in our exercise of macro-controls and has become more resilient. Economic growth is robust, prices are stabilizing, economic returns are good, and the people's wellbeing is improving..

（2） Accelerate the transformation of the economic development mode, improve the coordination of development and the competitiveness of industries. We supported support development in some areas while limiting growth in others, and carried out economic structural adjustments and upgrading to increase the sustainability of development.

We consolidated and strengthened the agricultural foundation. We fully implemented the policy of strengthening agriculture, benefitting farmers, and enriching rural areas. We increased subsidies for agricultural production, and the minimum purchase price for grain rose steadily. We strengthened agricultural and rural infrastructure, with priority given to irrigation and water conservancy projects, improved rural land, increased scientific and technological. We had a bumper harvest in all sectors of agriculture. China's grain output increased for the eighth consecutive year, which has rarely been seen in history. Grain output in each of the past five years has exceeded 500 million tons, which shows that China's overall grain production capacity has reached a new level.. Continuing to promote the renovation of dilapidated houses in rural areas, the drinking water safety of 63.98 million rural population and the electricity consumption problem of 600000 people in areas without electricity have been solved, further improving the production and living conditions in rural areas.

We accelerated the optimization and upgrading of the industrial structure. We energetically fostered strategic emerging industries and accelerated development of new energy, new materials, biomedicines, high-end equipment manufacturing and new-energy vehicles, and we sped up pilot projects and demonstrations for integrating the telecommunications network, the radio and television broadcasting network, and the Internet, along with the development of cloud computing and the Internet of Things. We made progress in enterprise mergers and reorganizations. We allocated 15 billion yuan from the central government budget to support more than 4,000 projects to boost key industries and upgrade their technologies. This seed capital attracted a total investment of 300 billion yuan.. We accelerated the development of information consulting, e-commerce and other modern service industries, and expanded new service areas. The transportation industry developed quickly, thereby further strengthening the foundation for China's economic and social development.

We will conserve energy, reduce emissions, and protect the ecological environment. We adopted and implemented the Comprehensive Work Plan for Conserving Energy and Reducing Emissions and the Work Plan for Controlling Greenhouse Gas Emissions for the Twelfth Five-Year Plan period, and the Guidelines on Strengthening Key Environmental Protection Tasks. The installed capacity of clean energy power generation reached 290 million kilowatts, an increase of 33.56 million kilowatts from the previous year. We strengthened the development of major energy conservation and environmental protection projects. We increased daily sewage treatment capacity by 11 million tons in urban areas, and installed desulphurization systems on all new coal-fired power-generating units with a total capacity of over 50 million kW.. Intensify the regulation of high energy consuming, high emission, and overcapacity industries, eliminate outdated cement production capacity of 150 million tons, iron smelting capacity of 31.22 million tons, and coke production capacity of 19.25 million tons. We implemented the second phase of the project to protect virgin forests and raised related subsidies, carried out the policy of giving rewards and subsidies for grassland ecological conservation, and launched pilot projects to protect the ecological environment of lakes. And we planted 6.13 million hectares of trees..

Promote coordinated development of regional economy. We thoroughly implemented the master strategy for regional development and the national plan for developing functional zones. A series of preferential policies were introduced and implemented to promote the leapfrog development of Xizang, Xinjiang and other regions. Develop and implement the new 10-year rural poverty alleviation and development plan and the action plan for revitalizing the border and enriching the people. As a result, regional development became better balanced, major economic indicators rose faster in the central and western regions and northeast China than the national average, and the eastern region accelerated industrial transformation and upgrading. The urbanization rate has exceeded 50%, which is a historic change in China's social structure. We completed reconstruction in Wenchuan, Sichuan, which was hit by a massive earthquake in 2008, and made major progress in disaster relief and reconstruction in Yushu, Qinghai; Zhugqu, Gansu; and Yingjiang, Yunnan.

（3） Vigorously develop social undertakings and promote coordinated economic and social development. Governments at all levels have increased investment in science and technology, education, culture, health, and sports, with a national fiscal expenditure of 2.82 trillion yuan.

We continued to enhance China's scientific and technological innovation capabilities. We strengthened basic research and research in cutting-edge technologies. We carried out major national research and development projects, made breakthroughs in a number of core and key technologies, and filled in many gaps in important products and technologies. The Tiangong-l space module and the Shenzhou-8 spacecraft were launched, and Shenzhou-8 successfully docked with Tiangong-l, marking a new milestone in China's development of manned spaceflights.

We made solid progress in making education more equitable. We thoroughly implemented the Plan for Education Reform and Development. After 25 years of unremitting efforts, we have fully realized the nine-year compulsory education. Over 30 million rural boarding school students were exempted from accommodation expenses, and 12.28 million of them who are from poor families in the central and western regions'received living allowances.. A comprehensive system for providing aid to students from poor families was put in place. The children of rural migrant workers were generally granted access to compulsory education in cities where they live. A three-year action plan for preschool education was carried out, and the number of children enrolled in preschool increased. We vigorously developed vocational education. We strengthened training of primary and secondary school teachers, expanded trials of reforming the system of conferring professional titles on them, and raised their overall quality. The first batch of free teacher trainees all went to teach in primary and secondary schools, with over 90% located in the central and western regions.

We vigorously strengthened development of the cultural sector. The central government increased financial support for cultural programs that benefit the people, and local governments significantly increased spending on nonprofit cultural programs. We increased the number of public cultural facilities open to the public free of charge, and steadily expanded their services. The cultural system reform continues to advance, and the cultural industry is developing rapidly. Significant progress has been made in the protection and inheritance of cultural relics and intangible cultural heritage. We put great effort into building public sports facilities, vigorously developed fitness activities across the country, and made new achievements in sports activities.

We actively yet prudently carried out reform and development of medical and health care services. We further expanded coverage of basic medical insurance, so that now 1.3 billion urban and rural residents are covered. A medical insurance system that covers the whole population is emerging.. We raised the reimbursement rate for hospitalization expenses covered by relevant policies, and expanded the range of major diseases for which medical treatment is insured. Governments at all levels increased per-person subsidies for the medical insurance for non-working urban residents and the new type of rural cooperative medical care system from 120 yuan per year to 200 yuan per year. We implemented the national system for basic drugs in all community-level medical and health care institutions run by the government, and basic drugs became safer and more affordable. The pilot reform of public hospitals is being carried out in an orderly manner. The primary healthcare service system has been basically established. New progress has been made in equalization of basic public health services.

（4） Effectively safeguard and improve people's livelihoods, and solve problems related to the vital interests of the masses. We adhere to the principle of prioritizing people's livelihoods, strive to ensure that the fruits of development benefit all people, and promote social equity and justice.

Implement more proactive employment policies. Develop employment opportunities through multiple channels, fully promote entrepreneurship to drive employment, strengthen vocational skills training and public employment service system construction. Intensify support in finance, taxation, and banking, and focus on promoting employment for key groups such as college graduates and migrant workers. The initial employment rate of college graduates was 77.8%, an increase of 1.2 percentage points year-on-year. The total number of migrant workers was 253 million, an increase of 4.4% over the previous year, including 159 million migrant workers who went out, an increase of 3.4%.

Actively adjust the income distribution relationship. Focus on improving the income of low-income people. The actual growth rate of per capita net income of rural residents is the highest since 1985, and has been faster than that of urban residents for two consecutive years; The minimum wage standards have been significantly raised in various regions; For the seventh consecutive year, the basic pension for enterprise retirees has been increased, with an annual increase of 1680 yuan per capita, benefiting over 57 million people; Further improve the level of urban and rural subsistence allowances, as well as the standards for pensions and living allowances for some special care recipients, and provide one-time living allowances to more than 86 million disadvantaged groups nationwide, including urban and rural subsistence allowance recipients and rural five guarantee support recipients; Establish a linkage mechanism linking social assistance and security standards with price increases. Expand the proportion of middle-income earners. The threshold for personal income tax has been raised from 2000 yuan to 3500 yuan. Reduce the tax burden on over 9 million individual businesses. The central government has decided to set the per capita net income of farmers at 2300 yuan (unchanged in 2010) as the new national poverty alleviation standard, an increase of 92% compared to 2009, and to include more low-income rural populations in the poverty alleviation scope. This is a huge social progress.

Strengthen the construction of the social security system. The coverage of social security continues to expand, and the number of people nationwide participating in urban basic old-age insurance, unemployment insurance, work-related injury insurance, and maternity insurance has significantly increased. 2147 counties (cities, districts) have implemented pilot programs for urban residents' social pension insurance, with 13.34 million people participating and 6.41 million receiving pensions. 2343 counties (cities, districts) have launched pilot programs for new rural social pension insurance, with 358 million people participating and 98.8 million receiving pensions, expanding coverage to over 60%. Solved the historical legacy issue of pension security for over 5 million retired employees of collective enterprises. Include 3.12 million employees who suffered from work-related injuries and their dependents in the overall management of work-related injury insurance. The orderly promotion of cross regional transfer and continuation of pension insurance. The continuous improvement of the social security system and significant steps towards full institutional coverage are important achievements in promoting equalization of basic public services.

Vigorously promote the construction of affordable housing projects. Introduce guidance on the construction and management of affordable housing projects, improve policies such as financial investment, land supply, credit support, and tax and fee reductions, focus on improving the quality of planning, construction, and engineering, and formulate systems and methods for the allocation, management, and exit of affordable housing. The central government allocated 171.3 billion yuan in funds, which is 2.2 times that of 2010. Throughout the year, 4.32 million sets of urban affordable housing were basically built, and 10.43 million sets of new construction began.

Strive to maintain social public safety. Strengthen the supervision of safety production, and do a good job in handling, investigating, and holding accountable major safety accidents. Improve the food safety supervision system and mechanism, and focus on cracking down on and rectifying illegal additives and illegal production and processing activities. Adhere to the principle of people-oriented and service-oriented, strengthen and innovate social management, focus on investigating and resolving various social conflicts, crack down on illegal and criminal activities in accordance with the law, and maintain social harmony and stability.

（5） Deepen the reform and opening up, injecting new vitality and momentum into economic and social development. We will increase our efforts to tackle challenges and promote reforms in key areas and critical links in accordance with the reform tasks proposed in the 12th Five Year Plan.

Improve the public finance system, especially the budget management system, include all off budget funds in budget management, expand the scope of state-owned capital operation budget implementation, deepen departmental budget reform, promote government budget and final account disclosure, and make public the "three public funds" of 98 central departments and provinces and cities such as Beijing, Shanghai, Guangdong, and Shaanxi. Implement the reform of ad valorem collection of crude oil and natural gas resource taxes nationwide, and introduce a pilot program for replacing business tax with value-added tax. Expand the scope of RMB settlement for cross-border trade to the whole country, launch a pilot program for RMB settlement for overseas direct investment, and carry out RMB settlement business for foreign direct investment. Deepen the reform of the collective forest tenure system, launch pilot reforms for state-owned forest farms, and carry out registration for grassland contracted management in accordance with the law. Promote the reform of the water conservancy construction management system and innovate the water resources management system. Deepen the reform of state-owned enterprises. Initiate the implementation of the reform and restructuring of the separation of main and auxiliary power grids, as well as the adjustment of on grid electricity prices and non residential electricity prices. The reform of township institutions has been basically completed. The classification reform of public institutions is being carried out in an orderly manner.

We insist on giving equal importance to exports and imports, utilizing foreign investment and outward investment simultaneously, and comprehensively improving the level of an open economy. Actively promote market diversification strategy and strive to optimize trade structure. The total import and export volume of goods for the whole year was 3.64 trillion US dollars, an increase of 22.5%. Among them, exports increased by 20.3%, imports increased by 24.9%, and the trade surplus further decreased. The actual use of foreign direct investment was 116 billion US dollars, and the proportion of the service industry and the central and western regions increased. The pace of enterprises' "going global" is accelerating, with non-financial outward direct investment of 60.1 billion US dollars. Actively participate in international and regional economic cooperation, and continue to deepen multilateral and bilateral economic and trade relations.

We have made remarkable progress in democratic and legal construction, national defense and military construction, Hong Kong, Macao and Taiwan work, and diplomatic work.

The achievements of the past year have not come easily, demonstrating the superiority and vitality of socialism with Chinese characteristics, and enhancing the pride and cohesion of the Chinese nation. This is the result of the scientific decision-making and correct leadership of the Party Central Committee with Comrade Hu Jintao as General Secretary, and the concerted efforts and tenacious struggle of the entire Party, army, and people of all ethnic groups in the country. On behalf of the State Council, I would like to express sincere gratitude to the people of all ethnic groups in China, to all democratic parties, people's organizations, and individuals from all walks of life! Sincere thanks to our compatriots in the Hong Kong Special Administrative Region, Macao Special Administrative Region, Taiwan, and overseas Chinese! Sincere thanks to the governments, international organizations, and friends of various countries who care about and support China's modernization construction!

We are also aware that China's economic and social development still faces many difficulties and challenges. From an international perspective, the process of world economic recovery is difficult and tortuous, the international financial crisis is still developing, and some countries' sovereign debt crises are difficult to alleviate in the short term. The unemployment rate in major developed economies remains high and lacks growth momentum, while emerging economies face dual pressures of inflation and a slowdown in economic growth. The exchange rates of major currencies fluctuate sharply, and commodity prices fluctuate significantly. Strengthening international trade and investment protectionism. From a domestic perspective, resolving systemic structural contradictions and alleviating the problems of unbalanced, uncoordinated, and unsustainable development are more urgent and difficult, and many new situations and problems have emerged in economic operation. Mainly, there is downward pressure on economic growth, prices remain high, real estate market regulation is in a critical stage, stable development of agriculture and sustained increase in farmers' income are becoming more difficult, employment pressure and structural contradictions coexist, some enterprises, especially small and micro enterprises, are facing more difficulties in operation, overcapacity is prominent in some industries, and energy consumption is growing too fast. Long term contradictions and short-term issues are intertwined, structural and cyclical factors interact, domestic and international issues are interrelated, and macroeconomic regulation faces a more complex situation. There are still some shortcomings and deficiencies in government work, and the goals of energy conservation, emission reduction, and price regulation have not been achieved; The issues of land acquisition and demolition, safety production, food and drug safety, income distribution, etc. are still prominent, and the public has strong reactions; The level of government management and service needs to be improved, and the construction of clean governance urgently needs to be strengthened.

We must take stronger measures with a high sense of responsibility to the country and the people, effectively solve existing problems, strive to do better in all aspects of work, and never let down the heavy trust of the people.

2、 Overall deployment of work in 2012

This year is an important year of the Twelfth Five-Year Plan period, and the last year of the term of my government. We must fulfill our duties, forge ahead, overcome difficulties, never slack off, and deliver a satisfactory answer to the people.

We are still in an important period of strategic opportunities for China's development, and there are a number of favorable conditions for us to maintain steady and robust economic development for a long time. The rapid advancement of industrialization, urbanization, and agricultural modernization, coupled with the upgrading of consumption and industrial structures, holds enormous potential for demand; After more than 30 years of reform and opening up, China has established a solid material foundation and institutional conditions for development, continuously enriched its experience in macroeconomic regulation, and significantly improved the competitiveness and risk resistance of enterprises; The innovation and development capabilities of the eastern region have been enhanced, and the development potential of old industrial bases such as the central and western regions and Northeast China has been continuously released; The traditional advantages of economic development still exist, with abundant labor resources and improved quality; The fiscal revenue and expenditure situation is good, the financial system operates steadily, and social funds are relatively abundant. The global economic and political patterns are undergoing profound changes; peace, development, and cooperation remain the underlying trends of the times, and overall the situation is favorable for China's peaceful development. We need to have firm confidence, capitalize on favorable conditions and factors, and continue to grasp and make the most of this important period of strategic opportunities to promote steady and robust economic development, and continue to enhance China's overall strength and its international influence.

We must hold high the great banner of socialism with Chinese characteristics, guided by Deng Xiaoping Theory and the important thought of the Three Represents, deeply implement the Scientific Outlook on Development, adhere to seeking progress while maintaining stability, strengthen and improve macroeconomic regulation, continue to handle the relationship between maintaining stable and rapid economic development, adjusting economic structure and managing inflation expectations, accelerate the transformation of economic development mode and economic structure adjustment, focus on expanding domestic demand, especially consumer demand, strengthen independent innovation and energy conservation and emission reduction, focus on deepening reform and opening up, focus on safeguarding and improving people's livelihoods, comprehensively promote socialist economic construction, political construction, cultural construction, social construction and ecological civilization construction, strive to achieve stable and rapid economic development and basic stability of overall price levels, maintain social harmony and stability, Welcome the successful convening of the 18th National Congress of the Communist Party of China with outstanding achievements in economic and social development.

The main expected targets for economic and social development this year are: a 7.5% increase in gross domestic product; More than 9 million new urban jobs will be created, and the registered urban unemployment rate will be controlled within 4.6%; Consumer Price Index increase will be kept around 4 percent; The volume of total exports and imports will increase by around 10 percent. At the same time, we will make further progress in industrial restructuring, innovation, energy conservation, and emissions reduction, and ensure that both urban and rural residents ' real incomes increase in line with economic growth. Here I wish to stress that in setting a slightly lower GDP growth rate, we hope to make it fit with targets in the Twelfth Five-Year Plan, and to guide people in all sectors to focus their work on accelerating the transformation of the pattern of economic development and making economic development more sustainable and efficient, so as to achieve higher-level, higher-quality development over a longer. Proposing to control the increase in consumer prices for residents at around 4%, taking into account input inflation factors, the impact of rising factor costs, and residents' affordability, while also reserving some space for price reform.

Taking into consideration all relevant factors, we will continue to follow a proactive fiscal policy and a prudent monetary policy, carry out timely and appropriate anticipatory adjustments and fine-tuning, and make our policies more targeted, flexible, and anticipatory.

Continue to implement an active fiscal policy. We will maintain a moderate budget deficit and treasury bond. This year, it is planned to arrange a fiscal deficit of 800 billion yuan, with the deficit ratio reduced to around 1.5%, including a central fiscal deficit of 550 billion yuan and the issuance of 250 billion yuan of local bonds. Optimize the structure of fiscal expenditure, highlight key areas, pay more attention to tilting towards the livelihood sector, and increase investment in education, culture, healthcare, employment, social security, and affordable housing projects. We will pay greater attention to strengthening weak links, and increase funding for agriculture, rural areas, farmers, underdeveloped areas, scientific and technological innovation, energy conservation, environmental protection, water conservancy, and geological prospecting. We will be more economical; strictly restrict spending on official overseas trips, vehicles for official use, and official hospitality; greatly reduce meetings and documents; deepen reform of the system for the use of official cars; and further reduce administrative costs. We will continue to restrict the construction of office buildings in terms of both size and grades, and reduce spending on building large gymnasiums and stadiums. We will also comprehensively strengthen auditing of key areas, sectors, and funds. We will introduce structural tax reductions. We will fully implement and improve all preferential tax policies to support the development of small, micro and individually owned businesses, and carry out pilot projects to replace business tax with VAT. We will continue to investigate the collection and use of administrative fees and operations of government-managed funds, merge them where necessary, and ensure fees are collected and government-managed funds are operated in a standardized way. We will strengthen supervision of local government debt and guard against risks. We will continue to deal with outstanding debts properly by classifying them into different categories and managing them accordingly, dealing with different situations differently, and resolving problems gradually. We will further investigate and standardize financing companies run by local governments. Governments at all levels are prohibited from making guarantees and promises in this respect in violation of laws and regulations. At the same time, we will both take short-term measures and build permanent systems, strictly limit new local government debt, and place revenue and expenditures of local government debt under budgetary management on the basis oftheir type.

We win continue to implement a prudent monetary policy. We aim to promote steady and robust economic development, keep prices stable, and guard against financial risks by keeping the total money and credit supply at an appropriate level, and taking a cautious yet flexible approach. We will employ a full range of monetary policy tools, appropriately adjust the supply and demand of money and credit, and maintain proper growth of financing from nongovernment sources. The broad money market is expected to grow by 14%. Optimize the credit structure, support the construction of national key ongoing and continuing projects as well as affordable housing projects, strengthen credit support for enterprises that meet industrial policies and have market demand, especially small and micro enterprises, and effectively reduce the financing costs of the real economy. Continue to strictly control loans to industries with high energy consumption, high pollution, and overcapacity. Improve the mechanism for the formation of the RMB exchange rate, enhance the two-way floating elasticity of the RMB exchange rate, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Vigorously develop the foreign exchange market, enrich foreign exchange products, provide more exchange rate hedging tools for market entities, and manage and make good use of foreign exchange reserves. Establish and improve a systematic financial risk prevention and regulatory coordination mechanism, and enhance the ability to resist risks. Strengthen monitoring of cross-border capital flows. Standardize various lending behaviors and guide the healthy development of private financing.

To comprehensively do a good job in this year's work, we must adhere to highlighting the theme, running through the main line, overall planning and coordination, and better combine stabilizing growth, controlling prices, adjusting structure, benefiting people's livelihoods, promoting reform, and promoting harmony. Stable growth means adhering to expanding domestic demand, stabilizing external demand, vigorously developing the real economy, striving to overcome the impact of various unstable and uncertain factors at home and abroad, timely solving emerging and directional problems, and maintaining stable economic operation. Controlling prices means continuing to take comprehensive measures to maintain the basic stability of the overall price level and prevent a rebound in price trends. Adjusting the structure means having support and control, improving the quality and efficiency of economic growth, and enhancing the coordination and sustainability of development. Benefiting people's livelihoods means adhering to the fundamental starting point and foothold of ensuring and improving people's livelihoods, placing the promotion of social fairness and justice in a more prominent position, and effectively achieving some good deeds that benefit the people. Grasping reform means advancing reform and opening up with greater determination and strength, focusing on resolving institutional and structural contradictions that affect the long-term healthy development of the economy and society, and achieving new breakthroughs in some key areas and critical links. Promote reform, development, and innovation through openness. Promoting harmony means correctly handling the relationship between reform, development, and stability, actively and effectively resolving various contradictions and risks, preventing local problems from evolving into global problems, and promoting social harmony and stability.

3、 Main tasks for 2012

（1） Promote stable and rapid economic development

Expanding domestic demand, particularly consumer demand, which is essential to ensuring China's long-term, steady, and robust economic development, is the focus of our economic work this year.

We will work hard to expand consumer demand. We will move faster to set up a permanent mechanism for boosting consumption. We will vigorously adjust income distribution, increase the incomes of low- and middle-income groups, and enhance people's ability to consume. We will improve policies that encourage consumption. We will vigorously develop elderly care, domestic, property management, medical and healthcare services. We will encourage consumer spending on cultural activities, tourism, and fitness; and implement the system of paid vacations. Actively develop new consumer formats such as online shopping. Support and guide green consumption such as environmentally friendly building materials, water-saving sanitary ware, and energy-saving cars. Expand consumer credit. Strengthen the construction of urban and rural circulation systems, as well as infrastructure such as roads and parking lots. Strengthen product quality and safety supervision. Improve the consumption environment and safeguard the legitimate rights and interests of consumers.

We will continue to improve the investment structure. Maintain stable investment growth and promote a positive interaction between investment and consumption. Seriously implement the "Several Opinions of the State Council on Encouraging and Guiding the Healthy Development of Private Investment" and issue operational implementation rules. We will strengthen the role of government investment in guiding adjustment of the economic structure, ensure funding for key projects that are under construction or expansion, and begin construction on major national projects in an orderly manner. We will tighten standards on market access and the screening and approval process relating to land, credit, energy conservation, environmental protection, safety, and quality; and strengthen supervision and inspections of major projects, particularly those undertaken by governments and state~owned firms, to improve the quality of and returns on such investments.

（2） Maintain basic stability of the overall price level

This is a key task affecting the people's interests and China's overall economic and social development. We will control prices and prevent inflation from rebounding by effectively carrying out macroeconomic policies, managing the supply of money and credit, and striving for basic equilibrium in aggregate supply and demand.

We win increase production and ensure supply. Continue to prioritize suppressing the rapid rise in food prices as the key to stabilizing prices. We will effectively carry out the practice of holding provincial governors responsible for the "rice bag" (grain supply) and city mayors for the "vegetable basket" (non-grain food supply) and ensure the supply of major farm products. Large and medium~sized cities should have sufficient farmland for growing vegetables, maintain and raise the proportion of seasonal vegetables sold there that are grown locally, and develop vegetable production bases in collaboration with neighboring areas and areas with suitable conditions. We will strengthen coordination of the production, transportation, and sale of important commodities; improve systems of government reserves and commercial reserves; do a good job purchasing, storing and marketing major agricultural products; and regulate the market better.

We win improve distribution and reduce distribution costs. We will ensure that the green channel policy for transporting vegetables and other fresh farm products is fully implemented. We will carry out policies to support wholesale agricultural product markets, market fairs, and community-based, low-priced vegetable stores. We will encourage urban chain supermarkets, universities, large enterprises, and communities to establish direct supply contacts with farm product distributors, specialized farmer cooperatives, and large family farms. We will also reduce distribution links and increas. We will deepen reform of the distribution system. We will expand trials of a tax on the income of logistics enterprises after deductions, and improve tax policies on the use of land occupied by facilities for storing major commodities. We will adjust and improve VAT policies for the wholesale and retail of some agricultural products, and promote standardized and information-based distribution. We will adopt a full range of measures to make distribution more efficient and cost-effective so as to benefit both producers and consumers.

We win tighten oversight and ensure market order. We will give high priority to strengthening oversight and inspection of food and drug prices as well as fees and charges for medical, communications, and educational services; put an end to unauthorized collection of charges and fines in the transportation sector; stop large commercial retailers :from illegally collecting fees; and crack down on illegal practices such as releasing false information, hoarding. We will lead public opinion and correctly guide public expectations of price movements.

（3） Promote stable development of agriculture and sustained increase in farmers' income

We need to pay even greater attention to modernizing agriculture in the course of industrialization and urbanization. We must continue to make solving problems related to agriculture, rural areas, and farmers a top priority in all of our work; increase policy support to strengthen agriculture, benefit farmers, and enrich rural areas; and consolidate and build upon achievements in the development of agriculture and rural areas.

We will steadily develop agricultural production and increase farmers ' incomes by various means. We will continue to carry out activities to steadily increase grain production, keep the area of land sown to grain crops stable, and increase per-unit yields. We will guide farmers to adjust their mix of crops or livestock, and produce more quality farm products in short supply. We will support the production of vegetables, meat, eggs, milk, and aquatic products.. We will continue to increase agricultural subsidies, raise their standard, expand their coverage, improve mechanisms for issuing them, and direct new subsidy increases mainly to large family farms, specialized farmer cooperatives, and producer-oriented service organizations. Continue to increase the minimum purchase price of grain, with an average increase of 7.4 yuan and 16 yuan per 50 kilograms for wheat and rice this year. We will improve the mechanism for subsidizing major growing areas and increase rewards and subsidies to major counties that produce important agricultural products such as grain, oilseed, and hogs. We will implement the 2011-2020 rural poverty alleviation and development program and, in accordance with the new national standards for poverty alleviation, do a good job of all poverty alleviation and development work, and step up our work in contiguous areas with particular difficulties to ensure that people in poverty share more fruits of reform and development.

We win speed up progress in agricultural science and technology. The fundamental way to develop agriculture is through science and technology. We will vigorously promote innovations in agro-science and increase support for R&D on and the application of key technologies for cultivating superior varieties and breeds, preventing and controlling animal and plant epidemics, and ensuring the quality and safety of agricultural products. We will accelerate reform and development of the service system for spreading agricultural technology in villages, and improve public service agricultural agencies in townships, towns, and regions. We will improve the system for subsidizing agricultural technologies and encourage farmers to use advanced and appropriate agricultural technologies. Build a modern agricultural demonstration zone, promote high-yield and standardized production. Accelerate the pace of agricultural mechanization.

We will strengthen agricultural and rural infrastructure. The central government plans to allocate 1.2287 trillion yuan for agriculture, rural areas and farmers, 186.8 billion yuan more than last year.. With these funds we will build and upgrade water-saving facilities in irrigated areas and build more small water conservancy projects, and vigorously develop water-efficient agriculture. We will intensify efforts to develop, improve, and reclaim rural land and develop on a large scale basic farmland that meets high drought and flood resistance standards.. We will take speedy steps to harness small and medium-sized rivers, reinforce small aging reservoirs, and take comprehensive measures to prevent and mitigate geological disasters caused by mountain torrents. We will continue to improve working and living conditions in rural areas by strengthening infrastructure such as water, power, and methane supply facilities, roads, and cultural and sports venues, and by cleaning up the environment and renovating dilapidated houses more quickly.

We will deepen rural reform. We will uphold the basic rural operation system. We will work diligently to determine, register, and certify land ownership. Farmers ' rights to the land they contract to work on, to the land on which their houses sit, and to proceeds from collective undertakings are property rights conferred by law, and these rights must not to be violated by anyone. We will provide better supervision and services for the transfer of contracted land-use rights, and develop farming operations on an appropriately large scale. Strictly protect arable land. Formulate and issue regulations on compensation for rural collective land expropriation. We will support large-scale farming by specialized farmer cooperatives and leading enterprises, encourage various sectors of society to provide services for agriculture, develop agricultural insurance, and increase commercialization and specialization in agriculture. Deepen comprehensive rural reform. Promote the reform of state-owned farms and forest farms, and continue to deepen the reform of collective forest rights system.

4. Accelerating the transformation oft he pattern of economic development

The key to solving the problems of imbalanced, uncoordinated, and unsustainable development is to accelerate the transformation of the pattern of economic development and carry out strategic adjustment of the economic restructure. This is both a long-term task and our most pressing task at present..

Promote the optimization and upgrading of industrial structure. We will promote the sound development of strategic emerging industries. Establish a mechanism to promote the utilization of new energy, strengthen overall planning, project support, policy guidance, expand domestic demand, and prevent blind expansion of solar and wind power equipment manufacturing capabilities. We will develop next-generation information technology, strengthen network infrastructure, and make substantive progress in integrating the telecommunications network, the radio and television broadcasting network, and the Internet. We will energetically develop the high-end equipment manufacturing, energy conservation, environmental protection, biopharmaceuticals, new-energy vehicles, and new materials industries. We will increase funding for technological upgrading projects, and press ahead with the transformation and upgrading of traditional industries. We will control increases in production capacity, improve existing production facilities, encourage enterprise mergers and reorganizations, and increase industrial concentration and economies of scale, with the focus on the automobile, steel, shipbuilding, and cement industries. We will implement and improve policies to promote the growth of small and micro businesses, further reduce burdens on enterprises, and promote the vibrant growth of small and micro high-tech enterprises. We will implement fiscal, taxation, and financial policies that facilitate the development of the service sector and encourage nongovernmental investment in this sector, in order to promote faster development of the sector, increase its share in the economy, and facilitate its upgrading.

We will conserve energy, reduce emissions, and protect the ecological environment. The key to conserving energy and reducing emissions is to save energy, improve energy efficiency, and reduce pollution. We will promptly formulate and promulgate a work plan for appropriately controlling total energy consumption, and move quickly to base the energy pricing system on the market. We will use economic, legal, and the necessary administrative means to conserve energy and reduce emissions in key areas such as manufacturing, transportation, construction, public institutions, and people's homes, and in 1,000 key energy-intensive enterprises; and close down mbre outdated production facilities. We will tighten supervision of energy use, develop smart power grids and ensure the proper distribution of energy supplies, and implement effective administrative practices such as efficient electricity generation and distribution, energy performance contracting, and government procurement of energy-efficient goods and services. Optimize the energy structure, promote the clean and efficient utilization of traditional energy, develop nuclear power safely and efficiently, actively develop hydropower, accelerate shale gas exploration and development, and increase the proportion of new and renewable energy. We will step up the construction of energy transportation routes. We will thoroughly implement the basic state policy of conserving resources and protecting the environment. We will carry out certification of energy-efficient products and oversight and inspection of energy efficiency labeling; encourage economical use of energy, water, land, and materials as well as comprehensive use of resources; and vigorously develop a circular economy. Strengthen environmental protection and focus on addressing prominent environmental issues related to people's livelihoods, such as heavy metals, drinking water sources, air, soil, and marine pollution. Strive to reduce agricultural non-point source pollution. Strictly regulate hazardous chemicals. This year, monitoring projects for fine particulate matter (PM2.5) will be carried out in key regions such as Beijing Tianjin Hebei, Yangtze River Delta, and Pearl River Delta, as well as in municipalities directly under the central government and provincial capitals. By 2015, coverage will be extended to all cities at or above the prefecture level. Promote ecological construction, establish and improve ecological compensation mechanisms, promote ecological protection and restoration, consolidate the achievements of natural forest protection, returning farmland to forests and grasslands, and returning grazing to grasslands, strengthen grassland ecological construction, vigorously carry out afforestation, promote desertification, rocky desertification, and slope farmland control, and strictly protect important ecological functional areas such as river sources, wetlands, and lakes. We will strengthen capacity building to adapt to climate change, and especially to respond to extreme climate events, and improve our ability to prevent and mitigate natural disasters. We will uphold the principle of common but differentiated responsibilities and the principle of fairness, and playa constructive role in promoting international talks on climate change. We will show the world with our actions that China will never seek economic growth at the expense of its ecological environment and public health. We are definitely capable of taking a path of civilized development which ensures that production increases, people's living standards rise, and we live in a good ecological environment..

Promote coordinated development of regional economy. We will implement the master strategy for regional development and the plan for developing functional zones, give full play to the distinctive strengths of each region, better coordinate development among regions, and make delivery of basic public services more equitable. We will conscientiously implement the policies and measures for the large-scale development of the western region in the new decade, work even harder to implement the strategy for the rise of the central region, more quickly revitalize the old industrial bases in northeast China, and actively support the eastern region in transforming its economy and participating in international competition and cooperation at a higher lev. We will increase support to old revolutionary base areas, ethnic minority areas, border areas, and poverty-stricken areas. We will encourage special economic zones, the Pudong New Area in Shanghai, and the Binhai New Area in Tianjin to better play their role of leading the way and exploring new paths in reform and opening up. Develop and implement ocean development strategies to promote the development of the ocean economy. We will strengthen and improve inter-regional cooperation mechanisms, remove market barriers, facilitate the flow of factors of production, guide the orderly transfer of industries, and promote mutually reinforcing and coordinated economic development among regions.

We win actively yet prudently promote urbanization. We will promote the coordinated development of large, medium-sized, and small cities as well as small towns in light of local conditions and in accordance with the laws governing urban development. On the basis of the carrying capacity of China's resources, environment and population, we will improve the distribution of the productive forces across the country, develop cities and towns rationally, and ensure that the geographical distribution of the population is suited to land availability, resources distribution, and development potential. We will strengthen the economic foundation and create job opportunities in all cities, improve their infrastructure and living environment, strengthen urban management and services, and raise the quality and level of urbanization. Pay more attention to the orderly transformation of migrant workers who have stable employment and residence in urban areas into urban residents; Relax the conditions for settling in small and medium-sized cities, guide population flow reasonably, and enable more surplus rural labor to transfer and find employment nearby. We should care more deeply for rural migrant workers and provide more services to them; resolve difficulties they have in securing employment services, obtaining social security benefits, getting their children enrolled in preschools and schools, and renting or purchasing homes; and gradually extend to them basic public services that are available to urban residents. We will take care of children, women and old people who are left behind by rural migrant workers who work in cities. We will enable rural residents to enjoy a happy life whether they go to the city or stay in the countryside.

（5） Deeply implement the strategy of revitalizing the country through science and education and the strategy of strengthening the country through talent

To make China prosperous and strong and achieve the revival of the Chinese nation, we need to vigorously develop science, technology, and education and create a high-quality talent pool.

We will continue to give high priority to developing education. The central government has prepared a budget based on the national fiscal education expenditure accounting for 4% of the gross domestic product, and local governments should make corresponding arrangements to ensure the achievement of this goal. Funds for education must be used to meet the funding requirements in key areas and strengthen weak links so that they yield better results. Deepen the reform of the education system, strengthen the construction of the teaching staff, vigorously implement quality education, and gradually solve prominent problems in examination and enrollment, education and teaching. We will carry forward and gradually institutionalize democratic school management. We will promote the balanced development of compulsory education and give preference to schools in the central and western regions, rural areas, remote areas, and ethnic minority areas, and to weak urban schools when allocating resources. We will continue to make great efforts to ease contentious issues of great concern to the people, including paying to emaIl one's children in better schools and the shortage of preschools. We will arrange the location of rural primary and secondary schools in light of local conditions, and ensure there is a proper balance between improving the quality of education and placing schools closer to children. We will run rural boarding schools well, and implement the plan for improving nutrition for rural students receiving compulsory education. Strengthen school bus and campus safety management to ensure the personal safety of children. Strengthen preschool education, continuing education, and special education, and build a modern vocational education system. Carry out ethnic education well. Higher education should better meet the needs of economic and social development and China's strategic requirements, and improve its quality and capacity for making innovations. We will improve the state financial aid system for students by gradually making all rural students exempt from paying tuition for secondary vocational education, and by granting financial aid to more students from poor families who attend regular senior secondary schools. We will vigorously develop privately run schools and encourage and guide nongovernmental investment in all types of schools at all levels. The people place their hopes on education, and education is crucial for China's future, so we must achieve even better results in this work.

We will vigorously boost innovation in science and technology. We will strengthen the national innovation system. We will deepen reform of the management system for science and technology, spur enterprises to become the main source of technological innovation, and more closely integrate science and technology with the economy. We will support enterprises in developing R&D centers and undertaking major national and regional science and technology projects. Guide research institutions and universities to provide technological innovation services for enterprises, better achieve the organic combination of industry, academia, and research, and improve the level of scientific and technological achievement transformation and industrialization. We will boost basic research and research in cutting-edge technologies, and improve our capacity to make original innovations. We will improve the evaluation and incentive system for scientific and technological advances. We will advocate academic integrity, encourage independent thinking, ensure academic freedom, and foster a scientific spirit. We will unwaveringly implement the national strategy on intellectual property rights.

We will comprehensively strengthen human resource work. We will deepen reform of the personnel management system; energetically train high-level innovative and entrepreneurial personnel, talented young people, and personnel who are urgently needed and in short supply; and attract talented personnel from overseas. Improve talent cultivation, appointment, evaluation, and incentive mechanisms. Efforts should be made to create a favorable social environment where talents emerge, are fully utilized, and are fully utilized.

6. Ensuring and improving the people s wellbeing

Putting people first is about realizing, upholding, and promoting their fundamental interests. We will make ensuring and improving their wellbeing an important task in the work of the government.

We will mai{e every effort to increase employment. Employment is of great importance to China's development and the people's wellbeing. We will continue to face great employment pressure this year, and governments at all levels must continue to follow the strategy of giving top priority to employment and more actively implement employment policies. Key support will be given to service industries with large employment capacity, innovative technology enterprises, and small and micro enterprises to create more job opportunities. We will encourage the creation of new businesses to stimulate employment. We will help college graduates, rural migrant workers and urban residents having difficulty finding jobs find employment, and strengthen technical training for ex-soldiers and help them find jobs and settle down. We will encourage college graduates to pursue careers in rural areas, local communities and the central and western regions. We will strengthen vocational training and public employment services. We will accelerate development of a sound, unified, standardized, and flexible human resources market. We will promote harmonious labor relations, increase supervision of overseas labor services, settle labor relations disputes, and intensify supervision, mediation, and arbitration of labor disputes to protect the legitimate rights and interests of employees.

We will accelerate improvements to the sodal security system. By the end of the year, we will have achieved full coverage of the new old-age pension system for rural residents and the old-age pension system for non-working urban residents. We will expand coverage of all types of social insurance. We will raise the basic pension for enterprise retirees. We will increase urban and rural subsistence allowances and social aid, and accelerate development of social welfare programs and charities. We will better coordinate all aspects of the social safety net. We will increase the social security fund through a variety of channels, and strengthen oversight and supervision of investment from the social insurance fund and social security fund to increase their value. We will strengthen capacity building for social security services, allow localities where conditions permit to integrate and merge social security agencies, and entrust some services to banks or commercial insurance institutions. We will accelerate the work of introducing all-in-one national social security cards.

We will vigorously promote the development and reform of medical and health care services. We will move faster to improve the medical insurance system covering the whole population, consolidate and expand the coverage of basic medical insurance, and enhance our capability to provide and manage basic medical services. We will raise subsidies for medical insurance for non-working urban residents and the new type of rural cooperative medical care system to 240 yuan per person per year. We will fully introduce social insurance against uraemia and seven other major diseases and include lung cancer and 11 other major diseases in the pilot program to provide insurance and aid for their treatment. We will consolidate and improve the system for basic drugs and improve the community-level medical and health care system. We will push forward reform of public hospitals, so that medical care is separated from pharmacy operations, government management is separated from hospital operations, and the practice of using pharmacy profits to subsidize medical services is ended. We will encourage and guide nongovernmental investment in hospitals, and speed up the creation of a system of hospitals with diversified ownership that is open to foreign participation. We will boost the morale of medical workers and build harmonious relations between doctors and patients. We will improve public health services and prevent and control major communicable, chronic and occupational diseases that pose a major health hazard. We will tighten control over drug safety. We will support and promote the development of traditional Chinese medicine and the medical practices of ethnic minorities.

We will comprehensively carry out work relating to population and family planning. We will continue to keep the birthrate low, redress gender imbalance through various means, and improve the health of infants. We will achieve full coverage of quality family planning services more quickly than planned and extend the trial program of free pre-pregnancy checkups to 60% of China's counties and county-level cities and districts. We will increase the rewards and special assistance to the rural families that observe the state's family planning policy. We will increase family planning services to the floating population and improve management of such services. We will do a good job with women and children, expand the coverage of free screening for cervical cancer and breast cancer among rural women, and improve the development of women and children and the protection of their rights and interests. We will further improve the social security system and the system of services for people with disabilities. We will actively develop programs for the elderly and accelerate development of a system of social services for urban and rural seniors so they can live their later years in contentment.

We will continue to regulate the real estate market and develop low-income housing. We will strictly implement and gradually improve policies and measures for discouraging speculative or investment-driven housing demand, build on progress made in regulating the real estate market, and bring property prices down to a reasonable level. We will continue to develop low-income housing, and basically complete five million units and start construction on over seven million units, ensuring they are built to a high standard. We will work speedily to improve the system for constructing, allocating, managing, and recalling low-income housing units. We will take effective measures to increase supply of regular commodity housing. We will accelerate development of an urban housing information system and reform the real estate tax system to promote long-term, steady, and sound growth of the real estate market.

We will strengthen and make innovations in social administration. We will work hard to resolve social conflicts, make innovations in social administration, and enforce the law impartially and with integrity. We will strengthen government functions for conducting social administration and providing public services. We will strengthen the self-governing capabilities of rural and urban community self-governing organizations. Give full play to the positive role of social organizations in social management. Actively and steadily promote the reform of the registered residence management system, promote the implementation of the residence permit system, and provide better services for the floating population. We will accelerate the development of a national e-government network, with the focus on sharing information and achieving national interconnectivity. We will vigorously give impetus to government, business, and public integrity, and create a credit information system for the whole society. Strengthen and improve Internet management and create a healthy network environment. We will improve the mechanism for assessing risks major policy decisions may pose for social stability and the mechanism for managing responses to emergencies. We will implement the strategy of ensuring safety in development, tighten oversight over workplace safety, and prevent the occurrence of serious and major accidents. We will carry out an intense crackdown on violations of intellectual property rights and the manufacture and sale of counterfeit or substandard goods. We will enhance our food safety oversight capability and raise the level of food safety. Strengthen and improve petition work, and improve the mechanism for expressing public interests and demands. We will strengthen legal services and assistance. We will be on high alert for and crack down on crime in accordance with the law to protect people's lives and property.

（7） Promote the great development and prosperity of culture

Culture gives human beings a sense of belonging, and passing on fine culture is essential in maintaining the everlasting vitality of a nation. We will provide a large quantity of high-quality cultural products to meet people's demand for culture. We will intensively promote development of the system of core socialist values. We will strengthen education with regard to social codes of conduct, professional ethics, family virtues, and individual integrity. We will educate children and young people about values and strive to create a social atmosphere that promotes morality, integrity, dedication, and harmony.. Vigorously develop public welfare cultural undertakings. Focusing on rural areas and central and western regions, strengthen the construction of grassroots cultural facilities. We will promote the flourishing of philosophy and the social sciences, and actively develop the press, publishing, radio, film, television, literature, art, and archives. We will better protect our cultural heritage and foster the flourishing of ethnic minority cultures. We will deepen reform of the cultural system and continue to transform for-profit cultural institutions into enterprises. We will make the cultural industry larger, more intensive, and more specialized; and tum it into a pillar of the economy. We will intensify cultural and people-to-people exchanges with other countries so that we learn from each other's strengths. We will extensively carry .o ut public fitness activities to make the people healthier, and promote the balanced development of sports activities and the sports industry.. Chinese culture is highly cohesive and inspiring, and we Chinese today must shoulder the historic duty of advancing it.

8. Deepening reforms in key areas

Reform and opening up are the right choice we made for China's destiny and future. We must respect the people's creativity; boldly explore new ways; continue to promote all reforms, including the reform of China's economic and political systems, with greater resolve and courage; and solve complex issues in development in line with the requirements of the Scientific Outlook on Development. In the current and future period, the key areas and key links of reform are: further transforming government functions, improving the macroeconomic regulation system, streamlining the relationship between the government and the market, and better leveraging the fundamental role of the market in allocating resources; Promote the reform of the fiscal and taxation system, streamline the fiscal allocation relationship between the central and local governments, and better mobilize the enthusiasm of both the central and local governments; Deepen the reform of land, registered residence and public services, straighten out the relationship between cities and rural areas, and promote the coordinated development of industrialization, urbanization and agricultural modernization; Promote reforms in social undertakings, income distribution, etc., clarify the relationship between economic and social development, and effectively safeguard social fairness and justice; Promote innovation in law based administration and social management, streamline the relationship between the government, citizens, and social organizations, and build a service-oriented, responsible, rule of law, and clean government. The key tasks of this year's reform are:

It will advance reform of the fiscal and taxation systems. We will improve the revenue-sharing system, improve the system of transfer payments, and increase the scale and proportion of general transfer payments. Improve the basic financial guarantee mechanism at the county level. Steadily promote the disclosure of local fiscal budgets and final accounts. We will deepen reform of the system for centralized treasury collection and payment, government procurement, and treasury bond management. Establish a sound consumption tax system. Comprehensively deepen the reform of resource tax and expand the scope of ad valorem taxation. We will thoroughly carry out reform of large financial institutions in which the state holds the controlling stake, ensure orderly development of small financial institutions, and improve the systems and mechanisms that serve small and micro businesses as well as agriculture, rural areas and farmers. We will implement new oversight and supervision standards for the banking industry, work toward establishing a deposit insurance system, and deepen the refor. Promote the implementation of new regulatory standards for the banking industry. Promote the establishment of a deposit insurance system. Deepen the reform of policy oriented financial institutions. Establish and improve the new stock issuance system and delisting system, strengthen investor returns and rights protection. Actively developing the bond market. Promote the reform and development of the insurance industry. Deepen the market-oriented reform of interest rates. Steadily promote the convertibility of RMB capital account and expand the use of RMB in cross-border trade and investment.

We will promote the common development of economic entities under diverse forms of ownership. We will unwaveringly consolidate and develop the public sector and encourage, support and guide the development of the non-public sector. We will thoroughly carry out strategic adjustment of the state sector, and improve the mechanism for increasing investment of state capital in some sectors while reducing it in others to ensure its sound flow. We will promote reform of the railway and power industries. We will improve and implement policies and measures for developing the non-public sector; break up monopolies and relax restrictions on market access; encourage nongovernmental investment in railways, public utilities, finance, energy, telecommunications, education, and medical care; and create a fair environment in which economic entities under all forms of ownership can compete and develop together.

We will deepen price reforms. We will prudently carry out reform of electricity prices by implementing progressive pricing for household electricity consumption and improving pricing mechanisms for nuclear power, hydropower, and power generated from other renewable energy sources. We will make the price of electricity better reflect the price of coal. We will reform the prices of refined oil products and proceed with the price reform of natural gas. We will impose the strictest control over water resources, rationally set and adjust water resource fees in different localities, and carry out integrated price reform of water used for agricultural purposes. Carry out pilot projects for carbon emissions and emissions trading.

We win deepen reform of the income distribution system. Urgently formulate the overall plan for the reform of the income distribution system. Efforts should be made to increase the proportion of residents' income in the distribution of national income, and to increase the proportion of labor remuneration in the initial distribution. We will improve the salary system, put in place a mechanism for regular salary increases, and steadily raise the minimum wage. We will create conditions to increase people's income from property. We will establish a mechanism whereby the public share the proceeds from the sale of public resources. We will take further steps to adjust taxes for high-income groups, strictly standardize supervision of pay and bonuses for senior management in state-owned enterprises and financial institutions, expand the proportion of middle-income groups, raise the incomes of low-income groups, and promote equal opportunity. We will ensure that income distribution is governed by proper standards, effectively protect lawful income, and resolutely ban illegal income. We will quickly reverse the trend of a widening income gap..

We will actively yet prudently carry out reform of public institutions based on their classification. We will classify public institutions scientifically, provide targeted guidance to each class, and phase in reforms sector by sector, level by level, and step by step to deepen reform of the systems of management, personnel, income distribution, and social security for public institutions.

We will accelerate government reform. We will expand socialist democracy; conduct democratic election, decision making, administration and oversight in accordance with the law; and protect people's rights to stay informed about, participate in, express views on, and oversee government affairs. We will implement the basic strategy of enforcing the law in both letter and spirit, respect and uphold the sanctity of the Constitution and laws, and govern in strict accordance with the law. We will resolutely rectify the problems of laws not being abided by or fully enforced, lawbreakers not being prosecuted, uncivilized law enforcement, dereliction and neglect of duty, and corrupt practices in law enforcement. We will work harder. To do so, we will fight corruption, effectively carry out the long-term and basic work needed to improve the system of preventing and punishing corruption, and give high priority to solving serious problems that the people are resentful about. We will identify, handle, review and standardize matters subject to administrative approval in strict accordance with the law. Leading officials are strictly forbidden to interfere in economic activities such as government procurement, project tendering and the auctioning of land-use and mining rights. We will strictly implement all regulations which require leading officials to uphold integrity in the performance of their official duties. Strengthen administrative supervision, democratic supervision, and public opinion supervision. Resolutely investigate and punish all types of disciplinary and illegal cases, and severely punish corrupt individuals.

（9） Strive to improve the quality and level of opening up to the outside world

China has entered a new stage of opening up in which the position and role of imports and exports as well as two-way investment have profoundly changed. We must adapt to changing circumstances, adopt new ways of thinking about our external economic work, change the mode of China's external economic growth, open China's economy wider and bring about a new phase in China's open economy.

Maintain stable development of foreign trade. While expanding domestic demand is crucial, we can never overlook the importance of external demand in China's economic development. We will maintain general continuity in China's foreign trade policy. We will continue to implement the export tax rebate policy; increase trade financing and credit insurance; ensure that customs, quality inspectors, and foreign exchange authorities improve their supervision and services; and help enterprises overcome difficulties and pressures resulting from falling orders, rising costs, and increasing trade friction. We will speed up transformation of the way we develop foreign trade. We will fully implement the strategy of boosting trade through upgrading technologies, improving quality, and diversifying markets. We will support enterprises in building their own brands, marketing networks, and R&D centers, and guide our processing trade to move up the industrial chain and shift to the central and western regions.. We will consolidate traditional markets in the United States, Japan, and Europe and open up emerging markets. We will keep labor-intensive exports stable, expand the export of high-tech and high-value-added products, and limit the export of goods whose production is energy intensive and highly polluting. We will work hard to promote trade in services and undertake more services outsourced by other countries. We will adopt guidelines to increase imports and promote trade balance, improve import policies, build more platforms to promote imports, and work for balanced growth of exports and imports.

We will improve the use of foreign capital. We will adhere to the policy of actively and effectively utilizing foreign capital and give greater importance to optimizing its structure and raising its quality. We will implement the newly revised Proposed List of Industries for Foreign Investment, and encourage more foreign investment in advanced manufacturing, new and high technologies, energy conservation, environmental protection, new service industries, and the central and western regions.

We will implement the "go global" strategy. With China's outward investment in an important stage of accelerated development, we will enhance macro-guidance, increase policy support, streamline approval procedures, and improve services for Chinese investors. We will guide Chinese enterprises under various forms of ownership in making overseas investments, mergers and acquisitions in energy, raw materials, agriculture, manufacturing, service industries, and infrastructure in an orderly manner. We will explore new models for overseas economic and trade cooperation zones, and support companies making overseas investments in coordinating their growth and forming clusters. Standardize the development of foreign labor cooperation. Restrictions on individuals investing overseas will be relaxed. We will strengthen risk management of overseas investments and protect the safety of employees and assets of Chinese enterprises operating overseas.

We win participate in global economic governance and regional cooperation. We will strive to maintain steady growth of China's economic and trade relations with developed countries and comprehensively deepen mutually beneficial cooperation with developing countries. We will continue to promote development of free trade zones and regional economic integration. We will actively participate in building mechanisms for global economic governance such as the G20, strengthen coordination with major economies on macroeconomic policy, oppose protectionism in all its forms, and continue to play a constructive role in the Doha Round of trade talks and the reform of the international financial system.

Ladies and gentlemen!

China is a unified multi-ethnic country, where all ethnic groups unite and strive for common prosperity and development, in order for the country to thrive and develop. We will adhere to and improve the system of regional ethnic autonomy, fully implement the central leadership 's policies and measures for supporting the development of ethnic minorities and ethnic minority areas, and energetically implement plans to support development of ethnic groups with small populations, projects to bring prosperity to border areas and residents there, and services for ethnic minorities. We will unwaveringly consolidate and develop socialist ethnic relations of equality, solidarity, mutual assistance, and harmony.

Seriously implement the basic principles of the Party's religious work. To safeguard the legitimate rights and interests of religious groups, religious figures, and believers, and fully leverage their positive role in promoting economic development, cultural prosperity, and social harmony.

Fully implement the Party's policy on overseas Chinese affairs. To safeguard the legitimate rights and interests of overseas Chinese and their families, and support their active participation in the modernization and peaceful reunification of the motherland.

Ladies and gentlemen!

A solid national defense and a strong military are the strong backing for safeguarding national sovereignty, security, and development interests. We will make the armed forces more revolutionary, modern, and standardized in all respects so they can comprehensively accomplish their historic mission at the new stage in the new century. We will enhance the armed forces ' capability to accomplish a wide range of military tasks, the most important of which is to win local wars under information-age conditions.. We will strengthen their ideological and political standards, and adhere to the fundamental principle of the Party having absolute leadership over the armed forces, and we should maintain the Chinese armed forces ' fundamental purpose of being an army of the people. Actively carry out military training under the conditions of informatization. We will accelerate the full modernization of the logistics support system. Vigorously enhance the independent innovation capability of national defense technology and weapons and equipment. We will focus on training a new type of highly competent military personnel. We will actively yet prudently carry out reform of national defense and the armed forces. We will steadfastly run the army with strict discipline and in accordance with the law. We will comprehensively modernize the armed police force. We will strengthen national defense mobilization and improve our reserves. We will ensure the armed forces resolutely accomplish the tasks of combating terrorism, maintaining stability, handling emergencies, and relieving disasters. We will follow the path of integrated military and civilian development with Chinese characteristics by unifYing military and civilian industries and embedding military programs in civilian industries. We will consolidate and develop solidarity between the military and the government and between the military and the people.

Ladies and gentlemen!

Hong Kong and Macau share weal and woe with the motherland. We will unwaveringly implement the principle of "one country, two systems" under which the people of Hong Kong govern Hong Kong and the people of Macao govern Macao and both regions enjoy a high degree of autonomy, and we will fully support the two regions in growing their economies, improving the people's wellbeing and promoting democracy. We support the governments of the two special administrative regions m meeting the challenges of international economIC risks and in upholding economic and financial stability and ensuring long-term prosperity and development. We will implement coordinated policies and measures for supporting the economic and social development of Hong Kong and Macao, open the mainland much wider to trade in services with the two regions, accelerate the construction of the Hong Kong-Zhuhai-Macao Bridge and other shared infrastructure projects, and deepen cooperation with Hong Kong and Macao to support them in participating in international and regional economic. We support Hong Kong in consolidating and elevating its position as an international financial, trade, and shipping center, and in becoming a center of offshore RMB transactions. We support Macao in becoming a world center of tourism and leisure, building the Hengqin New Area, and diversifying Macao's economy as necessary. We believe that with the staunch support of the great motherland, our compatriots in Hong Kong and Macao will certainly create an even brighter future for themselves.

Last year, relations across the Taiwan Straits withstood serious tests and improved considerably. Opposing Taiwan independence, accepting the 1992 Consensus, consolidating achievements in exchanges and cooperation, and promoting peaceful development of cross-Straits relations have increasingly become shared aspirations of the people on both sides of the Straits. In 2012, we will adhere to the central leadership'S policies on work related to Taiwan; strengthen the political, economic, and cultural foundation and public support for growing cross-Straits relations; and make further progress in promoting their peaceful development. We will deepen all-around cross-Straits economic and financial cooperation, and strive to make new progress in the follow-up talks on the Economic Cooperation Framework Agreement. We will accelerate development of the Western Taiwan Straits Economic Zone. We will energetically expand cross-Straits exchanges between people from all walks of life and carry out cultural, educational and other exchanges to forge a closer bond and increase mutual attachment and common interests between the two sides. All Chinese people should unite more closely and endeavor to accomplish the great cause of China's reunification and the great rejuvenation of the Chinese nation.

Ladies and gentlemen!

In the new year, diplomatic work should better serve the overall situation of reform and opening up and socialist modernization construction, and make greater contributions to promoting world economic growth and maintaining peace and stability. We will continue to deepen friendly relations with our neighbors; actively participate in cooperation mechanisms with them; deepen regional cooperation; and work with them in creating a regional environment of peace, stability, equality, mutual trust, cooperation, and mutual benefit. We will enhance unity and cooperation with other developing countries, deepen traditional friendships, expand mutually beneficial cooperation, help achieve the UN Millennium Development Goals, and uphold the legitimate rights and interests as well as the common interests of developing countries. We will increase strategic dialogue with other major countries to promote strategic mutual trust, broaden areas of cooperation, and promote the long-term, steady, and sound growth of our relations with them. We will actively participate in multilateral affairs and global governance and contribute to making the international political and economic order more just and equitable. We will unswervingly follow the path of peaceful development, adhere to an independent foreign policy of peace, pursue a win-win strategy of opening-up, and work with all countries in the world to promote the progress of human civilization, enhance the well-being of people in all countries, and build a harmonious world of lasting peace and common prosperity!

Ladies and gentlemen!

Looking back on the past, we have worked hard and made remarkable achievements; Looking ahead to the future, we still have a long way to go and need to make unremitting efforts. Let all of us rally closely around the Party Central Committee with Comrade Hu Jintao as General Secretary, free our minds, forge ahead in the spirit of innovation, make solid progress in our work, and strive to further advance socialist modernization.

note appended:

1. "Three networks" integration: it refers to the integrated development of telecommunications networks, radio and television networks and the Internet, realizing the interconnection and resource sharing of the three networks, and providing users with voice, data, radio and television and other services.

2. Cloud computing: It is an increase, use and delivery mode of Internet based services, usually involving the provision of dynamically scalable and often virtualized resources through the Internet. It is the product of the integration of the development of traditional computer and network technology, which means that computing power can also be circulated through the Internet as a commodity.

3. Internet of Things: refers to a network that connects any item with the Internet through information sensing equipment and according to the agreed protocol for information exchange and communication to achieve intelligent identification, positioning, tracking, monitoring and management. It is an extended network based on the Internet.

4. Three Year Action Plan for Preschool Education: In November 2010, the State Council issued the "Several Opinions on the Current Development of Preschool Education", requiring all provinces (autonomous regions, municipalities directly under the central government) to conduct in-depth investigations, accurately grasp the basic situation and prominent problems of local preschool education, and formulate a three-year action plan for preschool education at the county level. It is expected that through the implementation of the three-year action plan, more than 90000 kindergartens will be newly built, renovated, and expanded in various regions, which can add more than 5 million new spaces and effectively alleviate the problem of "difficulty in entering kindergartens".

5. Urban resident medical insurance: full name of urban resident basic medical insurance. In 2007, China launched a pilot program for urban resident medical insurance, targeting primary and secondary school students, children, and other non working urban residents who are not covered by the basic medical insurance system for urban employees. The main financing method is household payment, and the government provides appropriate subsidies. Focus on solving the hospitalization and outpatient major medical expenses of insured residents. In 2011, the government subsidy standard reached 200 yuan per person per year, and the number of insured people reached 220 million. The reimbursement ratio of hospitalization expenses within the policy scope and the proportion of outpatient coordination areas reached 70% and 85%, respectively.

6. New Rural Cooperative Medical Scheme (NRCMS), also known as the New Rural Cooperative Medical Scheme, is a medical mutual aid system for rural residents that is organized, guided, and supported by the government. Farmers voluntarily participate, and individuals, collectives, and the government raise funds from multiple sources, with a focus on coordinating major illnesses. In 2003, China officially launched the pilot program of the New Rural Cooperative Medical Scheme, and by 2008, the system had basically achieved full coverage. In 2011, the number of people participating in the New Rural Cooperative Medical Scheme reached 832 million, with a participation rate of over 96%. In 2011, the government subsidy standard reached 200 yuan per person per year, and the reimbursement ratio of hospitalization expenses within the policy scope reached 70%. Over 85% of the coordinated areas have carried out outpatient coordination.

7. Replacing business tax with value-added tax in the service industry: refers to an important reform of the service industry from levying business tax to levying value-added tax in accordance with the requirements of establishing a sound tax system that is conducive to scientific development. Starting from January 1, 2012, a pilot program of replacing business tax with value-added tax was launched in the transportation industry and some modern service industries in Shanghai. The overall tax burden of the pilot industries did not increase or slightly decreased, basically eliminating double taxation, and gradually promoting it to other industries. When conditions are ripe, some industries will be selected for a nationwide pilot program.

8. Uremia and other eight major diseases: childhood leukemia, childhood congenital heart disease, end-stage renal disease (uremia), breast cancer, cervical cancer, severe psychosis, multi drug resistant tuberculosis, AIDS opportunistic infection.

9. 12 major diseases such as lung cancer: lung cancer, esophageal cancer, stomach cancer, colon cancer, rectal cancer, chronic myeloid leukemia, acute myocardial infarction, cerebral infarction, hemophilia, type 1 diabetes, hyperthyroidism, cleft lip and palate. (Source: Central Government Portal/Xinhua News Agency)