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In the last decade, China's economy grew at an average rate of 10 percent per year, while its GDP climbed to 47 trillion yuan ($7.45 trillion) in 2011 from 10 trillion yuan ($1.59 trillion) in 2002.
In 2010, China overtook Japan to become the world's second largest economy. Its share in the world economy has risen to 10 percent in 2011 from a mere 4.4 percent in 2002.
"No other country in mankind's history has registered steady development and transformation on a scale and pace comparable to China," said Lin Shangli, Vice President of Shanghai-based Fudan University. "The secret to China's success lies in its leadership and the effectiveness of its strategy and policies."
However, China's economy has also suffered from problems and difficulties. At the beginning of 2004, it showed clear signs of a new round of overheating characterized by oversupply in the industrial sector. Sharp increases in China's demand for natural resources and raw materials have turned China into a big importer, resulting in soaring prices in both domestic and international markets.
By adopting macroeconomic control policies that combined the adjustment of credit policies and industrial restructuring, the government put a lid on surging investment in fixed assets, overexpansion of some industries and runaway bank loans.
At the end of 2004, Hu said during a speech that macroeconomic control policies had made it clearer that China had paid enormous costs in resources exhaustion and increasing pollution for its rapid economic growth. "We must give up the old path of extensive growth, achieve breakthroughs in technological and institutional innovation and blaze a new path to industrialization," Hu said.
Over the last five years, the Chinese Government has increased its budget for improving energy efficiency and reducing pollution. From 2007 to 2011, more than 338 billion yuan ($53.61 billion) was spent for this purpose, and 170 billion yuan ($26.96 billion) would be spent this year.
The Chinese Government also spent about 15 billion yuan ($2.38 billion) in 2011 to speed up industrial restructuring and technological upgrades. A considerable number of heavily polluting factories were shut down.
During the annual session of the National People's Congress, China's top legislature, in March, China lowered its GDP growth target to 7.5 percent after keeping it at around 8 percent for seven consecutive years.
By setting a slightly lower GDP growth rate, China hopes to achieve high-quality development over a longer period of time.
As the core of the Scientific Outlook on Development puts the people first, the Chinese Government has made multiple efforts to modify its spending to meet the requirements specified by the ideology.
Between 2009 and 2011, the Chinese Government invested 450.6 billion yuan ($71.46 billion) in the country's medical care services. By the end of 2011 more than 95 percent of China's population had been covered by the healthcare insurance system.
The annual government subsidy for urban and rural residents' insurance was increased from 80 yuan ($12.69) per person in 2008 to 240 yuan ($38.06) in 2012. The government also invested 63 billion yuan ($9.99 billion) between 2009 and 2011 in the construction and improvement of 33,000 hospitals at local levels.
Since the fall semester of 2008, all students in China have been exempted from tuition and incidental fees for their nine-year compulsory education, while rural children have enjoyed free schooling since the spring semester of 2007.
Government invested in more programs to distribute the fruits of the country's economic growth to economically disadvantaged groups, especially farmers.
In 2006, China rescinded the agricultural tax that had been collected from farmers in the country for more than 2,600 years. In August 2007, the Central Government published a circular requiring local governments to establish a minimum living standard system covering all rural residents.
In 2011, the per-capita net income of rural residents grew at its most rapid rate since 1985, faster than that of urbanites.
Also in that year, the Chinese Government dramatically lifted its official poverty line to an annual per-capita income of 2,300 yuan ($364.77) in rural areas, a significant increase from the 1,274 yuan ($202.05) standard set in 2010. The new line boosted the population of farmers eligible for government poverty-relief subsidies to 128 million, or 13.4 percent of the rural population and nearly 10 percent of the nation's total population.
Money has also been spent on affordable housing. In 2011, the central budget allocated 171.3 billion yuan ($27.17 billion) on government-subsidized housing projects, more than twice the amount spent in 2010. Construction on 4.32 million housing units for low-income residents has been completed, with another 10.43 million units under construction.
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