BEIJING -- China has experienced an extraordinary period over the past five years, when the Party guided the people to overcome hardships and attained achievements, Hu Jintao said in his report to the 17th National Congress of the Communist Party of China (CPC) on Monday morning.

"The five years since the 16th Congress was an extraordinary period," Hu said on behalf of the 16th CPC Central Committee.

In order to accomplish the arduous tasks of reform and development in a complicated and volatile international situation, he said, the Party led the people of all ethnic groups overcome difficulties and risks under the guidance of Deng Xiaoping Theory and the thought of Three Represents, creating a new situation in the cause of socialism with Chinese characteristics and attaining a new realm in adapting Marxism to conditions in China.

Hu reviewed that China's economic strength increased substantially, with the GDP expanding by an annual average rate of over 10 percent in the past five years.

Hu said that major breakthroughs were made in reform and opening up, people's living standards improved significantly, with the system of subsistence allowances for urban and rural residents basically in place, which guarantees basic living conditions for the poor.

Fresh progress was registered in improving democracy and the legal system, a new situation was created in cultural development, and social development proceeded in an all-round way, and the new undertaking to build the Party achieved solid progress, Hu said.

During the past five years, historic achievements were made in the development of national defense, and the armed forces were reduced by 200,000 troops, he said.

Meanwhile, Hu stressed that "the achievements still fall short of the expectations of the people and that there are still quite a few difficulties and problems on our way forward."

The outstanding problems and difficulties include:

-- The economic growth is realized at an excessively high cost of resources and the environment.

-- There remains an imbalance in development between urban and rural areas, among regions, and between the economy and society.

-- It has become more difficult to bring about a steady growth of agriculture and continued increase in farmers' incomes.

-- There are still many problems affecting people's immediate interests in areas such as employment, social security, income distribution, education, public health, housing, work safety, administration of justice and public order; and some low-income people lead a rather difficult life.

-- More efforts are needed to promote ideological and ethical progress.

-- The governance capability of the Party falls somewhat short of the need to deal with the new situation and tasks.

-- Some primary Party organizations are weak and lax. A small number of Party cadres are not honest and upright, their formalism and bureaucratism are quite conspicuous, and extravagance, waste, corruption and other undesirable behavior are still serious problems with them.

"We must pay close attention to these problems and continue our efforts to solve them," Hu said.