We will continue to implement the overall regional development strategy of promoting the large-scale development of the western region, reinvigorating northeast China and other old industrial bases, energizing development of the central region, and getting the eastern region to take the lead in development, and promote balanced development among regions. We will encourage all regions to work on the basis of local conditions, make full use of their advantages, and find a new path for development in response to the shock of external events. The eastern region needs to vigorously open up international markets, stabilize exports, and develop advanced manufacturing, modern services and new- and high-tech industries. It needs to accelerate industrial upgrading and institutional innovation, foster new areas of economic growth, create new advantages for participating in international cooperation and competition, and raise its capability for sustainable development. Special economic zones, the Pudong New Area in Shanghai and the Binhai New Area in Tianjin need to continue to take the lead in reform and opening up. We will increase support to the central and western regions and northeast China to improve their weak links in development. To remove bottlenecks in these regions, we will increase spending on infrastructure, ecological conservation and environmental protection, launch a number of key transportation and water conservancy projects, and accelerate development of a number of grain, energy, raw materials and equipment manufacturing bases that have distinctive local features and special advantages. We will accelerate development of key areas on a priority basis. We will promote the transformation of the economies of cities once dependent on now-depleted mineral resources in these regions. We will promptly formulate specific policies to encourage industries to relocate to the central and western regions, and formulate and implement a national plan for development priority zones. We will fully support the development of old revolutionary base areas, ethnic minority areas, border areas and poor areas.

5. Continuing to deepen reform and opening up, and further improving systems and mechanisms conducive to developing in a scientific manner

Reform and opening up provide an inexhaustible driving force for economic and social development. We will unswervingly carry out reform and opening up, resolve thorny problems hindering development by deepening reform, and obtain opportunities for development as China opens wider to the outside world.

We will move ahead with price reform for resource products. We will continue to deepen reform of power prices and gradually improve the mechanism for determining rates for putting power on the grid, transmitting and distributing power, and selling power, and balance the prices of coal and power in a timely fashion. We will press ahead with reform of water prices, gradually increase the price of water for non-farming purposes supplied from water projects, and improve the system for collecting and managing water resource fees. We will accelerate the establishment of sound systems for paying for the use of mineral resources and for compensating for ecological damage, and actively carry out trade in pollution rights on a trial basis.

We will carry forward reform of the fiscal and taxation systems. We will comprehensively institute VAT reforms. We will extend the urban construction and maintenance tax and education surcharges from Chinese to foreign enterprises and citizens. We will reform and improve the system of resource taxes. We will carry out reform of the taxation system for the real estate industry. We will continue to bring order to administrative fees and government-managed funds and further standardize their management. We will deepen reform of the budgetary system to better coordinate the budget for the government’s public expenditures, budget for use of state capital, budget for government-managed funds, and budget for social security programs and vigorously promote greater openness in budgetary work. We will improve the transfer payment system. We will promote the reform to place county public finances directly under the management of provincial governments.

We will carry forward reform of the financial system. We will deepen the reform of state-owned financial institutions, and steadily develop small and medium-sized financial enterprises under multiple forms of ownership and new types of rural financial institutions. We will actively encourage healthy development of informal financing. We will continue to carry out reform of capital markets, and stabilize stock markets. We will develop and standardize the bond market, and steadily develop the futures market. We will deepen reform of the insurance sector to make the most of its guarantee and financing functions. We will carry forward market-based reform of interest rates. We will improve the renminbi exchange rate regime, and keep the renminbi exchange rate basically stable at an appropriate and balanced level. We will strengthen the mechanism for coordinating oversight and supervision in the financial sector.

We will carry forward reform of state-owned enterprises and support the development of the non-public sector of the economy. We will deepen the reform to introduce corporate and shareholding systems in large state-owned enterprises and establish a sound modern corporate structure. We will accelerate reform of the railway, power and salt industries, improve the administrative systems of the civil aviation and telecommunications industries, and formulate and introduce complementary policies for regulating reform of the telecommunications system. We will encourage, support and guide the development of the non-public sector. We will implement all the policies for relaxing controls over market access and energetically support the involvement of private capital in SOE reform and its entry into such areas as infrastructure, public utilities, financial services and social programs.

We will accelerate institutional reform in local governments and move forward with the reform of government-affiliated institutions.

We will strive to ensure steady growth in foreign trade. While stressing the importance of boosting domestic demand, we must not slacken efforts to promote export. In the face of the serious situation of a sharp decline in external demand and growing trade protectionism, we will straighten out and adjust our foreign trade policies and increase our support for import and export. We will continue to diversify our export markets and compete on quality, enhance traditional export markets, and energetically open up new markets.

First, we will fully employ internationally accepted fiscal and taxation policies to support our export. We will increase the Foreign Trade Development Fund to an appropriate extent, focusing on cultivating brand-name export products and supporting small and medium-sized enterprises in expanding their international markets.

Second, we will improve our financial services for importing and exporting. We will expand the coverage of export credit insurance, and encourage financial institutions to develop export credit. We need to make innovations in financing guarantees for export enterprises.

Third, we will steadily carry out upgrading of processing trade. We will improve the climate for developing it, and adjust the list of commodities whose processing is classified as prohibited or subject to restrictions. We will encourage the relocation of export processing industries to the central and western regions.

Fourth, we will promptly improve policies and measures to encourage development of trade in services and energetically develop the outsourcing of international services to China.

Fifth, we will strive to expand imports, focusing on introducing advanced technology and equipment and increasing imports of key spare parts and components, and important energy sources, resources and raw materials.

Sixth, we will improve the level of trade facilitation. We will improve supervision and service in customs, quality inspections and foreign exchange and intensify the development of border ports.

Seventh, we will work for a favorable international environment for trade and economic cooperation. We will vigorously promote the Doha round of trade talks, accelerate implementation of the strategy of free trade zones, and properly handle trade frictions.

(To be continued)