REPORT ON THE IMPLEMENTATION OF THE 2006 PLAN FOR NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT AND ON THE 2007 DRAFT PLAN FOR NATIONAL
ECONOMIC AND SOCIAL DEVELOPMENT
The National Development and Reform Commission has been entrusted by the State Council to report on the implementation of the 2006 plan for national economic and social development and on the 2007 draft plan for national economic and social development for your deliberation and approval at the Fifth Session of the Tenth National People's Congress (NPC), and also for comments and suggestions from members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).
I. Implementation of the 2006 Plan for National Economic and Social Development
Under the leadership of the Communist Party of China (CPC), the people of all our ethnic groups in 2006 diligently put into practice major strategic concepts of the Scientific Outlook on Development and building a harmonious socialist society, followed the plan for national economic and social development adopted at the Fourth Session of the Tenth National People's Congress, and accelerated reform and opening up and the modernization drive, resulting in improved conditions and environment for development, a better growth momentum and an overall good start to the 11th Five-Year Plan. We took another solid step toward the magnificent goal of building a moderately prosperous society in all respects.
1. The national economy maintained its development momentum, characterized by rapid growth, strong performance and relatively low prices.
Economic growth was fast yet steady. China's GDP for the year reached 20.94 trillion yuan, up 10.7% from the year before. Economic development became more stable, with only minor fluctuations in quarterly and annual GDP growth rates. The consumer price index rose by 1.5% during the year. Although economic growth rate has remained at or slightly above 10% for four consecutive years, price rises have been relatively slow and stable, a situation rarely witnessed in the history of China's development.
The economy performed well. Total government revenue for 2006 was 3.93 trillion yuan, an increase of 24.3%. Large industrial enterprises generated 1.8784 trillion yuan in profits, up 31%. Energy consumption per unit of GDP fell by 1.23%, which is the first drop since 2003. Water consumption per unit of the added value of industry dropped by 9%.
Prominent difficulties and problems affecting economic performance were alleviated. Investment growth declined. Total fixed asset investment nationwide increased by 24% for the year, a decrease of 5.8 percentage points from the first half of 2006 and 2 percentage points from 2005. Growth of the money supply and credit slowed. At the end of 2006, the broad money supply (M2) had increased by 16.9% compared with 2005, representing a decrease of 2.1 percentage points from the May-end level and 0.6 percentage points less than the figure for the same period of the previous year. The pressure on tight supplies of coal and electricity and on the overloaded transportation system eased noticeably. Stored coal directly supplied to power plants reached 24.11 million tons at the end of 2006, indicating sufficient supply; installed power-generating capacity increased by 100 million kilowatts; electricity generated annually reached 2.8344 trillion kilowatt-hours, up 13.4%; the number of power lines affected by power outages plus the number of outages was down 97% from the year before, and the total power loss caused by outages was down by 82%; and transportation facilities proved adequate to meet transport demand for grain, fertilizer and other key materials.
2. Steady progress was made in building a new socialist countryside.
Policies to favor farmers were improved. The agricultural tax and tax on agricultural specialties were abolished across the country. This was in addition to other previously rescinded agriculture-related taxes and charges, including the butchery tax and animal husbandry tax, thereby relieving the financial burden on farmers by about 125 billion yuan each year. We provided grain farmers with direct subsidies, subsidies for growing superior varieties of crops and purchasing machinery and tools as well as general direct subsidies for agricultural supplies. Total subsidies given out last year exceeded 30 billion yuan. We also increased transfer payments to major grain-producing counties and those with limited financial resources, granting a total of 23.5 billion yuan in rewards and subsidies. The imposition of a minimum grain purchase price was extended from rice to include wheat. Compensation for the expropriation of farmland for large and medium-sized water conservancy and hydroelectric projects was also substantially increased.