3. Steadfastly deepening reform and opening up, and constantly improving institutions and mechanisms conducive to developing scientifically. We deepened reform and opening up to respond more powerfully to the global financial crisis, worked hard to remove institutional obstacles and continued to open wider to the outside world.

We accelerated reform in key areas and links. We comprehensively carried out VAT reform. The reform of the prices of refined oil products and taxes and fees on them was implemented smoothly, and a new mechanism for pricing them worked well. We made solid progress in commercializing the China Development Bank and introducing the joint stock system in the Agricultural Bank of China, and launched a pilot project to use the renminbi as the settlement currency for cross-border trade. The ChiNext stock market was officially launched, which opened a new financing channel for enterprises based on independent innovation and other growth enterprises. We reformed local government departments in an orderly manner, and steadily carried out a trial to reform institutions by type. We comprehensively launched the collective forests tenure reform. We devolved tenure in 100 million hectares of forest land to rural households, equaling 60 percent of the country's total area of collective forests. This is another major reform of China's rural operation system after the household land contract responsibility system.

We constantly raised the level of the open economy. We introduced policies and measures to stabilize foreign demand, adopted methods that conform to international practices to support export companies, completed the issuance of short-term export credit insurance worth $90 billion, and arranged $42.1 billion of export financing insurance for complete sets of large equipment. We encouraged increases in imports. Since the second half of last year, falls in imports and exports have clearly eased, and we have consolidated our share of international markets. Last year imports and exports totaled $2.2 trillion. We reversed the decline in utilized foreign investment, and actual utilized foreign direct investment amounted to $90 billion for the entire year. More enterprises "went global" in spite of the adverse situation; non-financial outward direct investment amounted to $43.3 billion, and receipts from overseas project contracting operations reached $77.7 billion. We actively participated in international macroeconomic policy dialogue and coordination as well as economic, trade and financial cooperation, and played a constructive role in the joint response to the global financial crisis.

4. Striving to improve people's well-being and accelerating the development of social programs. In the difficult circumstances of responding to the global financial crisis, we gave greater priority to ensuring and improving people's well-being and effectively solved the most practical problems of the greatest and most direct concern to the people.

We implemented a more active employment policy. We increased the responsibility of the government for stimulating employment. The Central Government allocated 42.6 billion yuan in special employment funds, an increase of 59 percent. For distressed enterprises, we postponed and in some cases reduced their payment of social security contributions. We also reduced or exempted reemployment tax and provided related subsidies to encourage enterprises to maintain or increase their levels of employment. We launched a series of employment service activities, created public-service jobs through multiple channels, and encouraged college graduates to take jobs at the primary level, enlist in the army, or join enterprises and institutions as interns. We provided job training for 21 million urban and rural workers. These measures helped bring about basic employment stability.

We accelerated improvements in the social security system. We established a nationwide pension planning system at the provincial level, and introduced a method for transferring pension accounts for workers of urban enterprises, some of whom are rural migrant workers. We launched a pilot project for a new rural pension insurance system in 320 counties—a historic step forward in the development of China's social security system. The Central Government allocated 290.6 billion yuan in social security funds, an increase of 16.6 percent. Pensions for enterprise retirees increased for the fifth consecutive year and registered another 10 percent rise per person. We provided better care for childless and infirm rural residents receiving guarantees of food, clothing, medical care, housing and burial expenses. We increased subsidies for entitled groups and subsistence allowances for both urban and rural recipients. The Central Government used 55.1 billion yuan to develop low-income housing projects, a two-fold increase over the previous year. We built, renovated or expanded 2 million low-income housing units of various types, and renovated or built 1.3 million housing units in different types of run-down areas. Nationwide, social security funds reached 692.7 billion yuan, an increase of 44.2 percent. We strengthened the social security system.

We made education more equitable. We increased education spending nationwide significantly, including Central Government spending of 198.1 billion yuan, an increase of 23.6 percent. We comprehensively implemented the urban and rural compulsory education policy, spent 66.6 billion yuan of Central Government funds on rural compulsory education, and reached the target of raising public spending for rural secondary and primary school students to an average of 500 yuan and 300 yuan per student respectively a year ahead of schedule. We implemented a performance-based pay system for compulsory education teachers. We started to implement the policy of free tuition for rural students attending secondary vocational schools whose families have financial difficulties and students in such schools who are studying agriculture-related majors. We constantly improved the national student financial aid system, which benefited 28.71 million students and basically ensured that no children from poor families were denied schooling due to financial difficulties.

We made steady progress in the reform and development of the pharmaceutical and healthcare fields. We organized the implementation of the reform of the pharmaceutical and healthcare systems. The Central Government spent 127.7 billion yuan on medical and health care, an increase of 49.5 percent. A total of 401 million urban workers and non-working urban residents subscribed to basic medical insurance, and the new type of rural cooperative medical care system covered 830 million people. The Central Government allocated 42.9 billion yuan to solve the problem of medical insurance for retired workers from closed and bankrupt state-owned enterprises. The basic drug system has been implemented in 30 percent of primary-level medical and healthcare institutions. Central Government funds were used to support the construction of a number of county-level hospitals, town and township central hospitals, and community health service centers. We launched major public health service projects, including one to increase vaccinations against hepatitis B. We intensified special campaigns for food and drug safety. Faced with the sudden outbreak of influenza A (H1N1), we carried out scientific and orderly prevention and control work in accordance with the law, and thereby effectively protected people's lives and maintained normal order in society.

It was not at all easy for our country to make all these achievements against the backdrop of the severe impact of the global financial crisis and the negative growth of the world economy. They were the result of the overall planning and correct leadership of the CPC Central Committee with Comrade Hu Jintao as General Secretary as well as the concerted and strenuous efforts of the whole Party, the entire army, and the people of all of our ethnic groups. On behalf of the State Council, I hereby express our sincere gratitude to the people of all of our ethnic groups and to the democratic parties, mass organizations, and people from all sectors of society. I also express our sincere thanks to our compatriots in the Hong Kong and Macao special administrative regions, in Taiwan, and overseas, as well as to foreign governments, international organizations, and friends in other countries that take an interest in and support China's modernization.

In the course of the past year, as we conscientiously applied the Scientific Outlook on Development, vigorously responded to the global financial crisis and completed all of our government work, we came to the following conclusions: We must continue to make use of both market mechanisms and macro-control, that is, at the same time as we keep our reforms oriented toward a market economy, let market forces play their basic role in allocating resources, and stimulate the market's vitality, we must make best use of the socialist system's advantages, which enable us to make decisions efficiently, organize effectively, and concentrate resources to accomplish large undertakings. We must balance long- and short-term interests, take into account long- and short-term needs, and address both the symptoms and root causes of problems. We must overcome short-term difficulties and solve major problems as well as strengthen key areas and weak links in order to lay a foundation for long-term development. We must continue to consider domestic and international situations, make it a long-term strategic policy to boost domestic demand, adhere to the win-win strategy of opening up, and quickly formulate a pattern in which domestic demand and foreign demand drive economic growth in concert. We must always remember that developing the economy is inseparable from improving people's well-being and safeguarding social equity and justice; make improving people's well-being the focus of development, and the starting point, goal and lasting driving force of economic development; strive to safeguard equity and justice; ensure that all of the people share in the fruits of reform and development; and promote social harmony and stability. We must give free rein to the initiative of both the central and local authorities. While stressing unity of thinking and keeping overall interests in mind, we also need to encourage everyone to proceed in light of local conditions and make explorations and innovations, in order to form a powerful, concerted force for overcoming present difficulties. All of these experiences are of vital and profound significance for keeping to the path of socialism with Chinese characteristics, improving our ability to run the socialist market economy, and pushing ahead the process of modernization.