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Report on the Work of the Government [Full Text]

(Xinhua)
Updated: 2008-03-19 10:39

During the past five years we established and put into practice the Scientific Outlook on Development, worked hard on economic development, deepened reform and opening up, ensured the well-being of the people, improved their lives, and promoted social harmony. We made great efforts and accomplished a great deal.

1. Improving macroeconomic regulation to promote steady and rapid economic development.

We endeavored to make macroeconomic regulation more proactive, responsive and effective, with the focus on resolving major problems affecting economic operation. Over the past few years, we tightened controls on the supplies of land and credit, raised market access requirements, adjusted financial and monetary policies as needed, improved industrial policies and the land policy, adjusted the economic structure, shored up weak links and effectively regulated economic operation to address problems such as overheated growth in fixed asset investment, excessive supplies of money and credit, excessively large trade surplus, and weakness in agriculture, the foundation of the economy, which could cause economic development to become unstable, unbalanced and unsustainable. In response to changes in the economy, we have repeatedly made timely adjustments in the required reserve ratio and the benchmark interest rates for savings and loans in financial institutions and rescinded or reduced export tax rebates for resource products and products whose production is energy intensive or highly polluting. These macroeconomic regulatory measures produced significant results, and China's economy maintained steady and rapid development throughout the five-year period, without experiencing major fluctuations.

We adopted a series of major measures related to institutions, policies and investment to increase grain production and rural incomes as a matter of priority and strengthen agriculture as the foundation of the economy. We completely rescinded the agricultural tax, livestock tax and tax on special agricultural products throughout China, reducing the burden on farmers by an average of 133.5 billion yuan per year. In addition, we set up a subsidy scheme for agriculture, instituting direct subsidies for grain producers, subsidies for superior crop varieties, subsidies for the purchase of agricultural machinery and tools, and general subsidies for agricultural production supplies and providing incentives to major grain-producing counties and subsidies to counties and townships with serious financial difficulties. Investment in agriculture and rural areas was greatly increased. Central government allocations for agriculture, rural areas and farmers reached 1.6 trillion yuan over the past five years, including nearly 300 billion yuan that was used for developing rural infrastructure. Local governments also substantially increased their input. During the five-year period, an additional 6.667 million hectares of farmland was equipped with water-saving irrigation facilities, methane gas was made available to 16.5 million more households, 1.3 million kilometers of rural roads were built or upgraded, and safe drinking water was provided to an additional 97.48 million rural residents. A system for the prevention and control of major animal diseases was set up, and the spread of highly pathogenic avian influenza was prevented. These measures greatly encouraged farmers to grow more, gave a strong impetus to the development of a new socialist countryside and brought historic changes to rural China to the great satisfaction of hundreds of millions of rural people. Agricultural development played an important role in ensuring the overall stability and development of China's economy and society.

We formulated the Outline of the National Program for Long- and Medium-Term Scientific and Technological Development, which contains comprehensive plans for the development of science and technology in China from 2006 through 2020 and calls for the launching of a number of major projects. This will have an important and far-reaching impact on efforts to strengthen China's capacity for independent innovation and make it an innovative country. Work in basic research and research in leading-edge technologies was intensified; a number of major innovations such as high-performance computers, third generation mobile communications, and super-hybrid rice were achieved; and a number of products that are competitive and carry Chinese intellectual property rights were developed. The central government spent 340.6billion yuan on science and technology over the past five years. China's total investment in research, experimentation and development rose from the 128.8 billion yuan of 2002 to 366.4 billion yuan in 2007, with its share in the GDP rising from 1.07% to 1.49%. Major progress was made in developing a system for technological innovation in which enterprises play a key role. The capacity of scientific and technological innovation to sustain and boost economic and social development was markedly increased.

We formulated and implemented a series of industrial policies and special plans designed to improve and upgrade the industrial structure. Development of new and high technology industries in information, biology, aerospace, new energy sources, new materials and oceanography was accelerated. Efforts to boost the equipment manufacturing industry produced significant results. Development of modern service industries such as tourism, banking and distribution was accelerated. Great progress was made in the development of infrastructure and basic industries, marked by the completion of or smooth progress on a number of major projects. The Qinghai-Tibet Railway was opened to traffic a year ahead of time; the Three Gorges Project is fully playing its designed role in flood prevention, power generation and shipping; the projects to send electricity and gas from China's western region to the eastern region are fully operational; the project to divert water from southern China to northern China is progressing smoothly; and construction has been started on a number of major projects such as the Xiluodu Hydroelectric Plant, Hongyanhe Nuclear Power Plant, Beijing-Shanghai high-speed railway, a ten million-ton capacity oil refinery and a million-ton capacity ethylene plant. Major progress has been made in the prospecting and development of the Puguang Gas Field and the Nanpu Old field. Newly added power-generating capacity over the five years totaled 350 million kW, equivalent to all the capacity added between 1950 and 2002. A total of 192,000 kilometers of highways were built, including 28,000 kilometers of expressways. A total of 6,100 kilometers of new railway lines went into operation. An additional 568 berths that can handle ships larger than 10,000 tons were completed. The number of telecommunications users was increased by 494 million. All of the above measures effectively improved the capacity of the energy, transportation and communications sectors and strengthened the basis for further economic and social development.

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