KEYNOTE SPEAKER: Premier Wen Jiabao delivers the government work report at the opening of the 2011 session of the National People's Congress, China's top legislature (LIU JIANSHEN)

At the opening of full annual session of the lawmaking National People's Congress on March 5, Premier Wen Jiabao delivered the government work report. The report consists of three parts: Review of National Economic and Social Development During the 11th Five-Year Plan Period, Major Objectives and Tasks for the 12th Five-Year Plan Period and Work for 2011.

When outlining this year's work, Wen said the government would focus on improving people's livelihoods. Excerpts follow:

The major targets for this year's national economic and social development are: to increase GDP by around 8 percent, further optimize the economic structure, keep the CPI increase around 4 percent, create more than 9 million new urban jobs, keep the registered urban unemployment rate at 4.6 percent or lower, and continue to improve the balance of international payments. Our main purpose is to create a good environment for transforming the pattern of economic development, and to guide all sectors to focus their work on accelerating economic restructuring and raising the quality and results of development as well as increasing employment, improving the people's well-being and promoting social harmony.

To achieve these targets, we need to maintain continuity and stability in our macroeconomic policies; make them more flexible, and target them more effectively; correctly strike a balance between maintaining steady yet rapid economic development, restructuring the economy and managing inflation expectations; pay more attention to maintaining overall price stability; and prevent large economic fluctuations.

We will continue to implement a proactive fiscal policy. We will keep the deficit and government bonds at appropriate levels. This year, we are projecting a deficit of 900 billion yuan, which consists of a 700-billion-yuan Central Government deficit and 200 billion yuan in local government bonds, which will be included in local government budgets. This deficit is 150 billion yuan less than budgeted last year, and the deficit will decrease to around 2 percent of GDP. We need to focus on optimizing the structure of expenditure. We need to increase expenditure in key areas, such as agriculture, rural areas and farmers; underdeveloped areas; the people's wellbeing; social programs; restructuring; and scientific and technological innovation. We need to decrease general and administrative overhead; strictly control expenditure of Party and government bodies on office buildings and other facilities; keep the budget for travel abroad, the purchase and operating costs of motor vehicles and PR expenditure at their present level in principle without any increase; and genuinely decrease administrative costs. We will continue to implement structural tax reductions. We will strengthen tax collection and administration in accordance with the law. We will comprehensively audit local government debt, carry out complete oversight and control, and establish a standardized financing mechanism for local governments to borrow money.

We will implement a prudent monetary policy. We will keep financing all sources at an appropriate level, and we have set a target of a 16-percent increase in the broad money supply (M2). We will increase the proportion of direct financing, and make full use of financing tools such as stocks, bonds and private equities to better satisfy the diverse demands for investment and financing. We will strive to optimize the credit structure, guide commercial banks to increase credit support to key areas and weak links, and strictly control loans to industries that consume large quantities of energy and resources and that are highly polluting or have excess capacity. We will further improve the mechanism for setting RMB exchange rates. We will closely monitor and control cross-border capital flows and prevent the influx of hot money. We will strengthen investment management and risk management over our foreign exchange reserves and increase the returns on our investments.

This year, our focus is on doing the following work well.

1. Keeping overall price levels basically stable

We need to make the most of favorable conditions, such as an ample supply of manufactured goods and our abundant grain reserves and considerable foreign exchange reserves, endeavor to overcome adverse effects of imported and structural inflation, cushion the upward pressure for costs of factors of production, and correctly guide market expectations to resolutely curb price increases.

2. Further expanding domestic demand, especially consumer demand

3. Consolidating and strengthening the position of agriculture as the foundation of the economy

We will ensure an adequate supply of agricultural products and increase farmers income through multiple channels. We will make safeguarding food security our primary goal, and work tirelessly to increase agricultural production.

We will put great effort into water conservancy, and comprehensively strengthen agricultural and rural infrastructure.

We will increase funding for agriculture, rural areas and farmers and improve our policies to strengthen agriculture and benefit farmers.

4. Accelerating strategic economic restructuring

5. Implementing the strategy of reinvigorating the country through science and education and strategy of strengthening the country through human resources development

6. Strengthening social development and ensuring and improving the well-being of the people

We will do everything in our power to expand employment. We will continue to implement a more proactive employment policy. This year the Central Government plans to invest 42.3 billion yuan ($6.22 billion) to assist and promote employment. We will continue to give top priority to the employment of university graduates and key groups. We will improve mechanisms for resolving labor disputes, safeguard the rights and interests of workers in accordance with the law, and build harmonious labor relations.