Massive government investment is the most direct, strongest and most efficient way to boost economic growth. According to the plan, the Central Government will make a direct investment of 1.18 trillion yuan ($172.77 billion). By implementing the investment projects, we are also aiming to attract investment from non-governmental sources and other private capital, including loans from the banks. I can tell you very clearly that the 1.18 trillion yuan is a completely new investment.

For this year's budget we have already allocated 595 billion yuan ($87.12 billion).

The 1.18-trillion-yuan investment to be made by the Central Government will be used mainly in projects concerning people's well-being, technology upgrades and transformation, ecological protection and major infrastructure development projects. Many other projects are not included in the plan of the 4-trillion-yuan ($586-billion) investment in two years.

In the 4-trillion-yuan investment plan for the two-year period, some of the projects are already defined by the 11th Five-Year Plan, mainly in the field of infrastructure investment such as road and railway construction. These old projects have already been evaluated, and necessary assessments have been made. What we are going to do is to speed up their development and construction. Otherwise, how can we define so many infrastructure development projects in such a short span of time?

Of course, there are also new projects listed in the plan. For example, in the government-subsidized housing project in three years, we are going to solve the housing difficulty for 7.5 million households and for 2.4 million households living in shanty dwellings. These are all new projects. These programs are going to be fully evaluated, and the whole process will be transparent and subject to supervision.

We are prepared to tackle the international financial crisis, and we have already reserved leeway for ourselves in our policy formulation, which means we have had our plans ready to tackle even more difficult times. To do that, we have reserved adequate ammunition, which means at any time we can introduce new stimulus policies.

Budget deficit

First, our fiscal deficit is still under control, and our debt level is also safe. This has to do with the fact that in the past few years we have kept our deficit down. In 2003, the fiscal deficit was 319.8 billion yuan ($46.82 billion), 2.6 percent of China's GDP of the same year. In 2008, the deficit was down to 180 billion yuan ($26.35 billion), 0.6 percent of the GDP. In 2003, the Chinese Government issued treasury bonds totaling 140 billion yuan ($20.5 billion), and in 2008, only 30 billion yuan ($4.39 billion) worth of treasury bonds were issued. Given China's economic development and increases in its fiscal revenue over the past few years, we now have adequate leeway to issue more debt and run a larger deficit.

Second, we need to have a more in-depth understanding of proactive fiscal policy. In tackling the current international financial crisis, the most direct, strongest and most efficient way is to increase fiscal input-the faster, the better. There is always another side of the same coin. If we are able to prevent a drastic slowdown in the economy and promote economic growth, at the end of the day fiscal revenue will also increase. We need to take a holistic approach to this issue.

Third, two more points about fiscal input. We need to use fiscal input in those areas that are most important and crucial and have the most pressing needs. At the same time, we also need to ensure that by making such fiscal investment we will be able to leave a valuable asset for our future generations. Throughout the whole operation of the fiscal resources, we need to ensure and strengthen supervision. For the operation of resources at both the central and local levels, we will see to it that the whole process will be transparent to the people and be subject to full supervision.

Unemployment

The unemployment issue is a very serious one. We have introduced a package plan, and we have also increased fiscal input in the economy. This is to boost economic development at its root. As a matter of fact, what is most important in resolving the unemployment issue is to strongly encourage the development of small and medium-sized enterprises, because they create 90 percent of the jobs.

We have formulated very specific policies in addressing the employment issue for rural migrant workers and college graduates. What is now important is to ensure their implementation.

We will continue to put job creation high on the agenda of our economic and social development, and we will continue to take strong measures in this regard. I recall once I said that for either college graduates or rural migrant workers, a job concerns not only their livelihoods, but also their dignity. As far as this issue is concerned, we will pay all attention possible to this issue and never overlook it.

Renminbi exchange rate

As for the possible devaluation of Renminbi, I don't think the Renminbi is depreciating. In July 2005, China introduced a reform of the exchange rate formation mechanism, and ever since then the Renminbi has appreciated against the U.S. dollar by 21 percent. Over the past year, we can see a little bit of depreciation of the Renminbi against the U.S. dollar, but at the same time, we have seen drastic depreciation of the currencies of European Union countries and some Asian countries. In this context, the Renminbi is actually appreciating in comparative terms. This has also put more and more pressure on China's exports.

Our goal is to maintain a basically stable Renminbi exchange rate at a reasonable and balanced level. No country is in a position to pressure China to appreciate or depreciate the Renminbi.

Safety of foreign reserves

China's foreign exchange reserves have been created thanks to the strenuous efforts made by the Chinese people. This has greatly increased China's capacity to pay in external transactions and trading, and at the same time, it has also demonstrated China's economic strength.

However, the foreign exchange holdings appear as a form of borrowing on the accounts of banks. The foreign exchange reserves are not the money of fiscal resources.

The use of foreign exchange reserves should be mainly for external investment and international trade.

We have already introduced a diversified strategy in managing our foreign exchange reserves. As far as the current state is concerned, our holdings are generally safe.

We'll further open up China to the rest of the world to make full use of both domestic and international markets and resources. And we need to give full play to the role of foreign exchange reserves to make the usage of them not only follow the principles of safety, liquidity and good value, but also facilitate national development and the improvement of people's lives.

It is true that China is now the largest creditor of the United States, which is the biggest economy in the world. We have followed very closely its economic development. President Obama and his new administration have introduced a series of measures to tackle the international financial crisis, and we do have expectations about the effect of the measures. We have lent a huge amount of money to the United States, and, of course, we're concerned about the safety of our assets.

Thanks to China's reform and development over the years, we have accumulated a huge amount of foreign exchange reserves, which shows China's economic strength. In managing our foreign exchange reserves, the No. 1 principle we have followed is to fend off risks. We always adhere to the principle of safety, liquidity and good value with regard to our foreign exchange reserve management. We also have adopted a diversified strategy in this regard.

On the foreign reserves issue, first and foremost we need to ensure China's national interests. And at the same time we also need to take into account the overall international financial stability, and I think these two aspects are inter-related.

Tibet issue

The situation in Tibet is on the whole peaceful and stable, and the Tibetan people hope to work and live in peace and stability.

Both the Chinese Constitution and the Law on Regional Autonomy by Ethnic Minorities have provided for the freedom and rights of people in Tibet and their freedom of religious belief.