Fellow deputies,

On behalf of the State Council, I now present to you my report on the work of the government for your deliberation and approval. I also invite the members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) to provide comments and suggestions.

I. Review of work in 2009

The year 2009 was the most difficult year for our country's economic development since the beginning of the new century. This time last year the global financial crisis was still spreading, and the world economy was in a deep recession. Our economy was severely affected; our exports decreased significantly; a large number of enterprises had operating difficulties and some even suspended production or closed down; the number of unemployed people increased significantly; many migrant workers had to return to their home villages; and the pace of our economic growth suddenly slowed down. In these unusually difficult circumstances, the people of all our ethnic groups fortified their confidence, tackled difficulties head on, worked tenaciously, and responded calmly to the impact of the global financial crisis under the firm leadership of the Communist Party of China (CPC). Our economy was the first in the world to have made a turnaround, and we made major new achievements in reform and opening up as well as socialist modernization. GDP reached 33.5 trillion yuan, an increase of 8.7 percent over the previous year (here and below). Fiscal revenue was 6.85 trillion yuan, up 11.7 percent. Grain production was 530.82 million tons, a new record and an increase for the sixth consecutive year. A total of 11.02 million urban jobs were created. The per- capita disposable income of urban residents was 17,175 yuan, and the net per-capita income of rural residents was 5,153 yuan, up 9.8 percent and 8.5 percent respectively in real terms. We took another steady step along the path of building a moderately prosperous society in all respects. Events again proved that no difficulties or obstacles can impede the course of the great rejuvenation of the Chinese nation.

The past year was truly extraordinary and inspiring. We held a grand celebration of the 60th anniversary of the founding of New China. The outstanding achievements we made in that time have greatly boosted the confidence and pride of the people, strengthened the cohesiveness of the Chinese nation, and raised China's international standing and influence. All this definitely encourages us to continue to forge ahead on the path of socialism with Chinese characteristics.

Over the last year, we mainly undertook the following work.

1. Strengthening and improving macro-control and promoting steady and rapid economic development. We carried out a proactive fiscal policy and a moderately easy monetary policy. We comprehensively implemented and constantly improved the package plan for addressing the global financial crisis. We significantly increased government spending, implemented structural tax reductions, rapidly increased supplies of money and credit, made our monetary policy more sustainable, and increased the amount of direct financing. We thus ensured funding for economic and social development, effectively boosted domestic demand, and quickly reversed the slowdown in economic growth.

We vigorously expanded consumer spending. Our policies to encourage consumption covered more areas, were stronger and benefited more people than ever before. The Central Government provided 45 billion yuan in subsidies for rural residents to purchase home appliances and motor vehicles, including motorbikes. Part of the subsidies also supported trading-in old motor vehicles and home appliances for new ones and purchasing agricultural machinery and tools. We halved the purchase tax on small-displacement automobiles. We reduced or exempted taxes on buying and selling homes to support the purchase of homes to be used as their owners' residences. Throughout the year 13.64 million motor vehicles were sold, an increase of 46.2 percent; commodity housing sales amounted to 937 million square meters, up 42.1 percent; and total retail sales of consumer goods increased 16.9 percent in real terms. Consumption played a much bigger role in fueling economic growth.

We promoted rapid growth in investment. We guided and stimulated non-government investment by means of well-leveraged government investment. We implemented a plan to invest an additional 4 trillion yuan over two years. In 2009, the Central Government's public investment was 924.3 billion yuan, 503.8 billion yuan more than that in the previous year's budget. Of this, 44 percent was invested in low-income housing, projects to improve the well-being of rural residents, and social programs; 16 percent in independent innovation, structural adjustment, energy conservation, emissions reduction, and ecological improvement; 23 percent in major infrastructure projects; and 14 percent in post-Wenchuan earthquake recovery and reconstruction. Fixed asset investment increased 30.1 percent nationwide. We further improved the investment structure. Rapid investment growth effectively compensated for the shortfall created by shrinking external demand, strengthened weak links, and laid a solid foundation for long-term economic and social development.

We accelerated the post-Wenchuan earthquake recovery and reconstruction work. We have already invested 654.5 billion yuan, 65.5 percent of the total planned investment, in the worst hit areas. Thanks to the government's strong support, the selfless assistance of people throughout the country, and the hard work of residents of the earthquake area, the badly damaged areas have taken on a brand-new appearance, with new towns rising straight out of the ground, and villages brimming with vitality. All this fully reflects the boundless love of the Chinese nation and powerfully demonstrates the incomparable superiority of the socialist system.

2. Vigorously carrying out economic restructuring, and shoring up the foundation for long-term development. We closely integrated sustaining economic growth with economic restructuring, and moved more quickly to resolve structural problems limiting economic development.

We further strengthened the work related to agriculture, rural areas and farmers. The Central Government used 725.3 billion yuan to support agriculture, rural areas and farmers, an increase of 21.8 percent. We raised the minimum grain purchase prices by a large margin. We began implementing the plan to increase grain production capacity by 50 million tons nationwide. We continued to improve living and working conditions in rural areas. We implemented rural drinking water safety projects that benefited 60.69 million people, increased the number of methane gas users by 5.1 million, built and upgraded 380,000 kilometers of roads and 266,000 kilometers of electric power lines and renovated 800,000 dilapidated houses in the countryside, and helped build permanent housing for 92,000 nomadic families. We also intensified our efforts to fight poverty. As a result, working and living conditions notably improved in poverty-stricken areas.

We intensified industrial restructuring. We formulated and implemented a plan for restructuring and invigorating 10 key industries. We encouraged enterprises to accelerate technological upgrading, and provided 20 billion yuan to support 4,441 technological upgrading projects. Further progress was made in mergers and reorganization in key industries. We made great efforts to restrict excess production capacity and redundant development in some industries. We closed down 26.17 million kilowatts of small thermal power stations, and eliminated backward facilities with total production capacity of 16.91 million tons in the steelmaking industry, 21.13 million tons in the iron-smelting industry, 74.16 million tons in the cement industry, and 18.09 million tons in the coke industry. We accelerated the implementation of major national science and technology projects, and spent 151.2 billion yuan of Central Government funds on science and technology, an increase of 30 percent. We vigorously supported the widespread use of domestically innovated products, and the development of emerging industries such as clean energy and third-generation mobile communications. We vigorously strengthened infrastructure development; put 5,557 kilometers of newly built railway lines into operation; opened 4,719 kilometers of new expressways to traffic, accelerated urban rail development; and built, renovated or expanded 35 civil airports. We increased the installed power-generating capacity by 89.7 million kilowatts, began supplying gas through the western section of the second line of the project for shipping natural gas from west to east, accelerated construction on the South-to-North Water Diversion Project, and began reinforcing 6,183 dangerous reservoirs.

We made solid progress in conserving energy, reducing emissions and protecting the environment. We supported 2,983 key energy conservation and recycling projects through budgetary investment. We implemented a project to promote energy-efficient products for the benefit of the people, putting into use more than 5 million energy-saving air-conditioners and 150 million energy-efficient light bulbs. We continued to develop key ecological projects in the forestry industry, and completed the afforestation of 5.88 million hectares, thereby raising the percentage of land covered by forest to 20.36 percent. Through combined measures, we brought soil erosion on 48,000 square kilometers of land under control. We strengthened the prevention and treatment of water pollution in the key watersheds of the Huai, Hai, and Liao rivers and Tai, Chao, and Dianchi lakes, and improved the control of wastewater, gases and residues from industry. Over the first four years of the 11th Five-Year Plan period, energy consumption per unit of GDP fell 14.38 percent, and chemical oxygen demand and sulfur dioxide emissions decreased 9.66 percent and 13.14 percent respectively. We made vigorous efforts to respond to climate change, and set forth our country's targets, policies and measures for controlling greenhouse gas emissions by 2020. We improved our weather forecasting and early warning, as well as earthquake monitoring, and constantly improved our disaster prevention and protection capabilities.

We took new steps in balancing development between regions. We thoroughly implemented the overall strategy for regional development, and formulated several major regional development plans and policies. The central and western regions and northeast China accelerated opening up and development, welcomed industries relocated from other parts of the country, and continuously strengthened their foundation for development. The eastern region accelerated restructuring and independent innovation, and the vitality of its economic development increased. A favorable situation emerged in which regional development was better distributed, structured and coordinated.