An analysis of the overall international and domestic situations shows that China is still in an important period of strategic opportunities. Challenges and opportunities coexist, as do hardships and hopes. Neither the fundamentals of China’s economic and social development nor its positive long-term trend has changed. We are fully confident that we will overcome difficulties and challenges, and we have the conditions and ability to do so. Our confidence and strength come from many sources: from the scientific judgment and correct grasp of the situation of the central leadership; from the policies and measures that have been formulated and implemented to respond to challenges and promote long-term development; from the huge demand generated by the development of infrastructure, the upgrading of the industrial structure and consumption patterns, environmental protection, and the development of the ecosystem and social programs in the rapid process of industrialization and urbanization; from the support of such factors as our ample capital and labor resources, our sound financial system in smooth operation, vigorous enterprises and flexible macro control policies; from our material, scientific and technological base and institutional conditions that have been created in the 30 years of reform and opening up; from our unique political and institutional advantages that enable us to mobilize resources to accomplish large undertakings, the stable, harmonious social environment we enjoy, and the enthusiasm and creativity of the whole nation from top to bottom to promote scientific development; and from the powerful spirit of the Chinese nation, which always works hard and persistently to make the country strong. As long as we closely follow the Party’s leadership and firmly rely on the people of all our ethnic groups, we will be able to overcome any difficulties, minimize the adverse impact of the global financial crisis and promote sound and rapid economic and social development.

To carry out the work of the government well this year, we must hold high the great banner of socialism with Chinese characteristics, take Deng Xiaoping Theory and the important thought of Three Represents as our guide, and thoroughly apply the Scientific Outlook on Development. We need to make ensuring steady and rapid economic development the main task of our economic work. We need to strengthen and improve macroeconomic control, vigorously expand domestic demand, particularly consumer demand, change the pattern of development and speed up strategic economic restructuring, and deepen reform and improve our work of opening to the outside world. We need to improve the people’s lives, increase social harmony and promote all-round progress in socialist economic, political, cultural, social and ecological development.

We have set the following major targets for this year’s national economic and social development: GDP will grow by about 8 percent; the economic structure will further improve; urban employment will increase by more than nine million persons; the urban registered unemployment rate will be held under 4.6 percent, urban and rural incomes will grow steadily; the rise in the CPI will be around 4 percent; and the balance of payments will continue to improve. It needs to be stressed that in projecting the GDP growth target at about 8 percent, we have taken into consideration both our need and ability to sustain development. In China, a developing country with a population of 1.3 billion, maintaining a certain growth rate for the economy is essential for expanding employment for both urban and rural residents, increasing people’s incomes and ensuring social stability. As long as we adopt the right policies and appropriate measures and implement them effectively, we will be able to achieve this target.

To ensure success of the government’s work this year, we must act on the following principles.

First, we must boost domestic demand to sustain economic growth. We need to steadfastly take reversing the downward trend in economic growth as the primary goal of macro control, and make boosting domestic demand a long-term strategic principle and a basic point of departure for stimulating economic growth. We will work to increase effective demand, shore up weak links, and give full play to the leading role of domestic demand, particularly consumer demand, in driving economic growth.

Second, we must adjust the structure of the economy to raise it to a higher level of development. In changing the pattern of development, we will continue to focus on economic restructuring and independent innovation. We will turn pressure into impetus for growth, unwaveringly protect and develop advanced productive forces, shut down backward production facilities, integrate factors of production and create more room for development. We will balance our efforts to sustain economic growth, adjust the structure and improve economic performance to raise the overall quality of the national economy and strengthen the basis for its further development.

Third, we must press ahead with reform to make the economy more vigorous. We will continue to take deepening reform and opening up as the fundamental driving force for promoting scientific development. We need to further emancipate our minds, intensify reform in major areas and key links, eliminate obstacles embedded in systems and mechanisms and stimulate greater creativity for development.

Fourth, we must give top priority to ensuring people’s well-being and promote social harmony. The more difficulties we face, the greater attention we should pay to ensuring people’s well-being and promoting social harmony and stability. We will continue to ensure that maintaining and improving people’s lives is always the starting and end point of our economic work. We will implement an even more proactive employment policy and closely integrate efforts to stimulate growth with efforts to expand employment and improve people’s lives in order to ensure that all of the people share in the fruits of reform and development.

III. Major Tasks for 2009

This year, our government work will give high priority to dealing with the global financial crisis and promoting steady and rapid economic development. We will take a coordinated approach, stress key areas, and fully implement a package plan to ensure steady and rapid economic development. We will dramatically increase government investment by launching a four trillion yuan two-year investment plan, for which the Central Government has pledged 1.18 trillion yuan, and implement a structural tax reduction in order to stimulate domestic demand. We will also implement a massive plan to adjust and reinvigorate industries to raise the overall competitiveness of the economy; vigorously promote independent innovation and provide scientific and technological support to increase the sustaining power of development; and significantly increase social security benefits, expand urban and rural employment and promote development of social programs. To implement this package plan, we will concentrate our efforts on the following seven areas:

1. Improving and strengthening macro control and maintaining steady and rapid economic development

We need to adhere to a flexible and prudent control policy to make our macro control more responsive to changes and more results-oriented. We will reverse the slowdown in economic growth as soon as possible and maintain steady and rapid economic development.