Third, a number of serious problems affecting the people's interests have not been properly addressed. Problems in food and drug safety, medical services, education charges, housing, income distribution, public security and production safety remain a source of public concern. Problems arising in land expropriation and requisition, housing demolition, transformation of enterprises into stock companies and environmental protection that harm the interests of the people have not been fundamentally solved. Life remains difficult for many low-income people.

Fourth, the government's efforts to improve its performance still have room for improvement. Moves to change the way the government functions have not made the expected progress, non-separation of government administration and enterprise management remains a problem, and the responsibilities of some government offices are not clear, leading to low productivity. Expenses related to carrying out official duties have not been standardized, and extravagance and waste are inflating administrative costs. In some local governments and government offices and among a small number of their employees, there are problems of bureaucratism, formalism, isolation from the people, neglect or dereliction of duty and even abuse of power and corruption. The root cause of these problems lies in institutional deficiencies and poor oversight.

We must maintain a strong sense of responsibility to the country and the people and take more forceful measures to solve them in order to live up to the expectations of the people.

II. General Plan for Work in 2007

This is the last year for the term of this government, so we must do our best to carry out our duties with even greater drive and work tirelessly to do even better in all our work in order to deliver a good report to the people.

The basic approach and tasks for the work of the government are: to take Deng Xiaoping Theory and the important thought of Three Represents as our guide and fully implement the Scientific Outlook on Development; to accelerate the building of a harmonious socialist society; to conscientiously implement the principles and po licies the CPC introduced since its Sixteenth National Congress; to strengthen and improve macroeconomic regulation; to speed up adjustment of the economic structure and change of the pattern of economic growth; to strengthen resource conservation and environmental protection; to advance the reform and opening up policy and independent innovation; to promote social development and resolve issues related to the people's wellbeing; and to promote all aspects of socialist economic, political, cultural and social development to create a good environment and favorable conditions for the convening of the Seventeenth National Congress of the CPC.

Taking into consideration all factors, we have decided on the following main goals for China's economic and social development this year: On the basis of structural improvement, improved productivity, reduced consumption of energy and environmental protection, GDP is forecast to grow by about 8%, the number of jobs created in urban areas should be at least 9 million, and the rate of registered urban unemployment should be kept below 4.6%. The overall price level should remain basically stable, the overall increase in consumer prices should stay below 3%, and there should be improvement in the imbalance in international payments.

It is important to mention here that in a socialist market economy, a target for GDP growth set by the government is a guide and an indicator of the anticipated level. It serves as an important basis for setting macroeconomic targets for the budget, employment and prices. Because of changes in the domestic and international economic environments including the market, the real GDP growth rate will vary a certain amount from the projected target. In setting the target for GDP growth around 8% for 2007, we have taken into account a number of factors, such as what is needed and what is feasible. The most important task for us is to promote sound and fast economic development. To attain this goal, we should guide all sectors of the economy to conscientiously put into practice the Scientific Outlook on Development, focus on improving the economic structure and economic performance, saving energy, reducing energy consumption and cutting down on the discharge of pollutants, and to avoid seeking only faster growth an d competing for the fastest growth.

In order to realize the goals and complete the tasks for this year's economic and social development, we must closely adhere to the following policies and principles:

First, we must stabilize, improve and implement policies. Stabilizing policies means ensuring the continuity and consistency of macroeconomic policy and continuing to follow prudent fiscal and monetary policies. Improving policies means promptly revising policies and measures in response to new developments in the operation of the economy and finding specific solutions to serious issues and problems. Implementing policies means conscientiously implementing all policies and measures of the central government, improving the ability to implement policies and truly putting all policy decisions into effect.

Second, we must strengthen and improve macroeconomic regulation. The focus of this work is to keep the scale of fixed asset investment and credit under control and to promote overall balance between total supply and total demand while improving the structure. We must encourage growth in some sectors and discourage it in others, treating each sector according to its specific situation, and make more use of economic levers and legal means to guide and standardize economic activity. We need to correctly balance the relationship between central and local government organizations to give full play to the initiative of each.

Third, we need to greatly improve the quality and efficiency of economic growth. We must attach greater importance to saving energy and resources, protecting the environment and using land intensively, pay close attention to improving product quality, strengthen the competitiveness of the economy and better ensure the sustainability of economic development.

Fourth, we need to pay closer attention to promoting social development and improving the people's wellbeing. We must put people first, promote faster progress in social programs, work energetically to solve the most practical problems that are of greatest concern to the people and most directly affect their interests, safeguard social fairness and justice, and ensure that all of the people share in the fruits of reform and development.

Fifth, we need to make reform and opening up the driving force behind all our work. We must continue in the direction of reform to develop the socialist market economy. In order to meet the requirements for economic and social development, we need to promote economic, political, cultural and social restructuring and accelerate the establishment of institutional guarantees for implementing the Scientific Outlook on Development and building a harmonious society. We need to make China more open to the outside world in all respects.

III. Promoting Both Sound and Fast Development of the Economy

Looking at the overall situation, we need to concentrate on the following areas in promoting this year's economic development:

1. We will continue to strengthen and improve macroeconomic regulation.

We need to continue to follow a prudent fiscal policy.

One, we will reduce the budget deficit and the amount of long-term development treasury bonds issued by an appropriate amount. The deficit for the central government budget this year is set at 245 billion yuan, down 50 billion yuan from last year. We plan to issue 50 billion yuan of long-term development treasury bonds, down 10 billion yuan from last year. We also plan to allocate 80.4 billion yuan from the central government budget for investment in regular development projects, up 25 billion yuan from last year. Total central government investment in development projects is expected to be 130.4 billion yuan.

Two, the structure of budgetary expenditures and government investment will be improved to put more emphasis on key areas. "Increase in three areas" must be ensured in the use of government funds, i.e. a year-on-year increase in investment to directly improve living and working conditions in rural areas, investment in social programs such as elementary education and public health, and investment in the large-scale development of the western region. In addition, we will increase expenditures for energy conservation, environmental protection and independent innovation.