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Full Text: Report on China's Economic and Social Development Plan

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Contents

I. Implementation of the 2011 Plan for National Economic and Social Development

II. Overall Requirements and Major Objectives for Economic and Social Development in 2012

III. Major Tasks and Measures for Economic and Social Development in 2012

As this is an important year for linking the efforts we have already made in implementing the Eleventh Five-Year Plan and the efforts we are going to devote in implementing the Twelfth, successfully completing all the work for economic and social development this year is of great significance for consolidating and expanding upon our achievements in responding to the global financial crisis, promoting scientific development, and accelerating the transformation of the pattern of economic development. In order to successfully complete the objectives and tasks for economic and social development, we need to adhere to the general principle of making progress while maintaining stability and concentrate on the following ten tasks in line with the requirements of keeping economic growth stable, bringing price rises under control, carrying out economic restructuring, improving the people's wellbeing, implementing reform, and promoting social harmony.

1. We will strengthen and improve macro-control to make it more targeted, flexible, and future-oriented.

We will steadfastly take all factors into account, balance all targets and tasks, and correctly handle the relationship between maintaining steady and robust economic growth, restructuring the economy, and keeping the overall price level basically stable; and when exercising macro-control, we will give priority to addressing prominent conflicts and problems arising in the process of economic and social development and to effectively guarding against hidden risks in economic activities, and have a good grasp of the intensity, tempo and focus of macro-control. We will continue to implement a proactive fiscal policy and a prudent monetary policy. In implementing the fiscal policy, we will improve the policy for structural tax reductions, keep the fiscal deficit and government bonds at appropriate levels, make an effort to optimize the structure of government expenditures, and give more support to areas concerning the people's wellbeing. This year, national revenue is budgeted at 11.36 trillion yuan with a year-on-year increase of 9.5%, and national expenditures are budgeted at 12.43 trillion yuan, up 14.1%; and the fiscal deficit is set at 800 billion yuan, 50 billion yuan less than last year. This figure includes a central government deficit of 550 billion yuan and 250 billion yuan in bonds that will be issued on behalf of local governments. When carrying out the monetary policy, we need to consider both economic growth and trends in prices; and finely adjust supplies of money and credit and maintain a reasonable growth in financing from all sources, in line with the requirements of maintaining proper scale and making prudent yet flexible adjustments. We will work hard to improve the credit structure, and give more support to key national projects under construction or expansion and low-income housing projects, as well as to enterprises and small and micro ones in particular that are encouraged in industrial policy and have market demand. We will tighten post-loan supervision and ensure that loans better serve the real economy. We will continue to strictly control loans to industries that are energy-intensive, highly polluting or have excess production capacity. We will create a sound mechanism to prevent, oversee and manage systemic financial risks and coordinate the efforts to address them, strengthen the monitoring of cross-border flow of capital, and promote standardization of informal credit. The broad money supply (M2) is expected to increase 14% in 2012, up 0.4 percentage points from last year. We will strengthen coordination and cooperation among the fiscal, monetary, investment, industrial, pricing, land and environmental protection policies, strive to create a synergy of macro-control, and make our macro-control more scientific and effective.

2. We will vigorously expand domestic demand, and maintain steady and robust economic development.

1) We will work hard to maintain growth in consumer demand. Total retail sales of consumer goods in 2012 are expected to increase 14%. We will intensify efforts to increase the income of low earners, steadily raise minimum wages of workers and basic pensions for enterprise retirees, and improve the salary system for government agencies and public institutions. We will vigorously develop the infrastructure for the distribution of goods in rural areas and small and medium-sized cities, as well as for culture and tourism, sports and fitness, and broadband networks. We will improve the policy for encouraging consumption of products that conserve energy or water and are environmentally friendly, and give priority to meeting the demand for loans from buyers who purchase general commodity housing units as their first homes. We will further study the issue and formulate a long-term policy to sustain the growth in consumption. We will energetically develop tourism, and this year, tourism revenue is projected to reach 2.475 trillion yuan, up 10%. We will effectively implement the system of paid vacations, encourage consumption in the areas of culture, tourism, fitness, domestic services, medical and health care, and elderly services, and vigorously develop online shopping and other new consumption formats. We will increase consumer credit. We will tighten oversight and control of product quality and safety, and inflict harsher punishments for illegal practices in the production and distribution of food and drugs.

2) We will continue to improve the investment structure. In 2012, total fixed-asset investment is expected to increase 16% nationwide. We will allocate investment funds of 402.6 billion yuan from the central government budget, an increase of 20 billion yuan over last year. We will give priority to ensuring funding for projects under construction or expansion that have been approved by the state; begin construction on the major projects in the Twelfth Five-Year Plan in an orderly manner; increase investment in low-income housing projects, education, health, and water conservancy, as well as in Xinjiang, Tibet, and Tibetan ethnic areas in Sichuan, Yunnan, Gansu and Qinghai provinces; and focus our support on infrastructural development in areas such as agriculture, rural areas and farmers, energy conservation and emissions reduction, environmental protection and ecological improvement, independent innovation and economic restructuring, and social programs and social administration. We will intensify supervision and inspection of major projects, particularly government- and state-invested ones, and improve the quality of and returns on investment. We will improve relevant measures for encouraging and guiding nongovernmental investment and rules and regulations for their implementation, and support nongovernmental investment in such areas as railway, public utilities, finance, energy, telecommunications, education and medical care. We will strictly control reckless expansion of industries that consume large quantities of energy and resources, are highly polluting or have excess production capacity, as well as the construction of office buildings and other facilities for Party and government agencies.

3) We will strengthen regulation of supplies of coal, electricity, oil, gas and transport. We will improve the coordination of coal production and transportation with demand; strengthen the demand-side management of electric power; guarantee steady supply of oil and gas; exercise overall coordination in transportation; and ensure that adequate supplies reach key areas at crucial times to meet the demands of key organizations and the people in work and living. We will increase efforts to analyze, study, and estimate economic activities and the energy situation in particular, improve the emergency response mechanism, and increase our ability to respond to emergencies. We will work harder to develop facilities for coal transportation and electricity transmission, start construction as quickly as possible on the coal transportation route from western Inner Mongolia to central China, and increase the coal transport capacity of existing railways. In 2012, raw coal output is expected to be about 3.65 billion tons, an increase of 3.7%; crude oil output will be 204 million tons, the same as last year; electricity production will hit 5.05 trillion kilowatt-hours, an increase of 7.5%; and the volume of rail freight transport will be 4.16 billion tons, an increase of 5.8%. Furthermore, we will enhance our ability to ensure adequate supply at home through international markets.

3. We will adopt comprehensive measures to address both the root causes and symptoms of problems, and keep the overall price level basically stable.

1) We will ensure adequate market supply. Top priority in keeping prices stable will be given to stabilizing the prices for agricultural and sideline products. We will effectively implement the systems whereby provincial governors are responsible for the "rice bag" (grain supply) and mayors are responsible for the "vegetable basket" (non-staple food supply). We will work hard to ensure coordination in the production, transport and sale of important commodities, particularly daily necessities, improve the government and commercial reserve systems, do a good job in purchasing, stockpiling and releasing major agricultural products, and adjust imports and exports appropriately. We will continue to strictly control intensive processing of corn.

2) We will reduce distribution costs. We will formulate and implement a comprehensive plan to reduce distribution costs. We will continue to implement the green channel policy of waiving all tolls for the transportation of fresh farm products; carry out measures to support public benefit-oriented wholesale markets for agricultural products and farm produce markets; open more low-price shops in large and medium-sized cities; support construction of grain and edible oil storage facilities; and actively develop cold-chain logistics for agricultural products and modern grain logistics. We will move faster to phase out tolls on government-financed Grade II highways in the western region, and standardize collection of fees and charges in farm produce markets and by large retail enterprises. We will expand trials of a tax on the income of logistics enterprises after deductions, effectively implement tax policies on the use of urban land by major commodity storage facilities, and adjust and improve VAT policies for the wholesale and retail of some agricultural products. We will accelerate the development of direct supply of agricultural products from farmers to stores, schools and wholesale markets.

3) We will enhance our regulation capacity. We will improve the contingency plan for adjusting prices of important commodities including grain, hogs, edible oils, chemical fertilizers and thermal coal. We will accelerate the establishment of a policy-supported insurance system for basic vegetables, and improve the reserve system for winter and spring vegetables. We will properly handle the timing, tempo and intensity of government regulatory price adjustments. We will set up a sound system of price adjustment funds, and implement and improve the mechanism for coordinating social assistance and social security benefits with price rises to ensure basic living conditions for low-income people. We will formulate laws and regulations on overseeing and reviewing costs of government-set prices, on standardizing enterprise pricing, and on business service fees and charges.

4) We will strengthen market oversight. We will carry out intensive inspections of prices and fees concerning farmers, enterprises and people's livelihood; standardize telecommunications services and tighten oversight of their charges; review the implementation of thermal coal contracts; clean up funds and fees concerning coal; inspect fees charged by commercial banks; rectify unauthorized fines and charges in transportation; and continue to intensify law enforcement actions against price fixing. We will severely deal with all price irregularities.

4. We will unwaveringly do a good job in work related to agriculture, rural areas and farmers, and promote steady development of agriculture and sustained increase in rural incomes.

1) We will improve our capacity to ensure adequate supply of agricultural products. We will make proper arrangements to effectively implement the plan to increase China's grain production capacity by 50 million tons, strengthen our overall grain production capacity, and keep the areas sown to grain stable. We will implement policies for supporting the production of major agricultural products, including crops, livestock and poultry. We will strengthen fishery administration and improve fishing ports. In 2012, the grain-growing area is expected to reach over 106.67 million hectares with a total output of more than 500 million tons, and the total output of cotton, oilseeds, sugar crops and meat will reach 6 million tons, 32.8 million tons, 126 million tons and 81 million tons, respectively.

2) We will accelerate innovation in agricultural science and technology. We will continue to carry out the project to cultivate superior varieties and breeds and the crop protection project, and develop the animal epidemic prevention system and the system for quality inspection of agricultural products. We will move faster to research and spread the use of superior varieties and breeds as well as highly-efficient water saving techniques and other advanced technologies, and comprehensively carry forward reform and development of the system to expand the use of agricultural technology at county and township levels, so as to raise agricultural productivity.

3) We will strengthen agricultural infrastructure construction. We will continue to harness large rivers and lakes including the Yellow River, the Huai River and the Tai Lake; accelerate the implementation of major water conservancy projects such as the first phase of the eastern and central routes of the South-to-North Water Diversion Project; strengthen construction of key water source projects; and intensify efforts to harness small and medium-sized rivers, reinforce aging reservoirs and sluices, and develop a system for monitoring, forecasting and giving early warning of geological disasters from mountain torrents and adopt comprehensive measures to prevent and control such disasters. We will energetically proceed with projects to develop large irrigated areas and carry out water efficiency retrofitting, demonstrate synergy between water-saving irrigation techniques and high-efficiency agriculture, upgrade large irrigation and drainage pumping stations, and improve farmland. We will intensify efforts to develop, improve, and reclaim rural land and develop on a large scale basic farmland that meets high drought and flood resistance standards. In 2012, we plan to allocate 68.3 billion yuan from the central government budget for investment in water conservancy projects, 3.2 billion yuan more than last year.

4) We will improve working and living conditions in rural areas. We will step up the implementation of projects to provide safe drinking water in rural areas, vigorously develop renewable energy sources in rural areas, intensify efforts to upgrade rural power grids and build rural roads, actively advance projects to renovate dilapidated rural houses, and make steady progress in projects to build permanent homes for nomadic families. In 2012, we will ensure safe drinking water for another 60 million rural residents, raising the percentage of the rural population with access to safe drinking water to 81%, and build or renovate an additional 200,000 kilometers of rural roads.

5) We will implement and improve our policies to strengthen agriculture, benefit farmers and make rural areas prosperous. We will further raise the minimum purchase prices of wheat and rice on average by 7.4 yuan and 16 yuan per 50 kilograms, respectively, purchase and stockpile corn, soybeans, canola seeds, cotton, sugar and hogs on a temporary basis as needed, and implement and improve the price policy for purchasing sugar crops. We will increase subsidies for purchasing agricultural machinery and general subsidies for purchasing agricultural supplies, improve the policy of subsidies for purchasing improved crop varieties, and increase reserves of chemical fertilizers in the off-season. We will vigorously develop rural secondary and tertiary industries, particularly agricultural product processing, and increase support for specialized farmers' cooperatives. We will attach importance to solving difficulties that rural migrant workers, particularly the new generation of them, have in securing employment, social security, pay, housing and children's schooling, and guide those rural migrant workers who are eligible for urban household registration in settling in cities in an orderly way.

5. We will accelerate economic restructuring, and make development more sustainable and cost-effective.

1) We will accelerate the cultivation and development of strategic emerging industries and high-tech industries. In 2012, a total investment of 7.5 billion yuan from the central government budget will be allocated to support independent innovation and the development of strategic emerging industries. We will put in place a sound mechanism for industrial technology innovation led by enterprises; implement the plan to develop strategic emerging industries and the plan to improve independent innovation capacity; formulate and promulgate a guiding list for key products and services of strategic emerging industries; organize the implementation of a number of major industrial innovation programs as well as application and demonstration projects; work harder to implement the venture capital plan for emerging industries; and intensively carry out national pilot projects for innovative cities. We will improve development and sharing of information resources and become better able to ensure information security. We will implement the National Broadband Internet Agenda; launch a project to increase broadband speed and a promotional plan for the commercial use of next-generation Internet; push forward demonstrations on using the Internet of Things; and develop national pilot programs and demonstrations for IT promotion in areas such as medicine and health, and workplace safety. In 2012, spending on R&D as a percentage of GDP will reach 1.92%.

2) We will transform and upgrade traditional industries. In 2012, we will allocate 16 billion yuan of investment funds from the central government budget, one billion yuan more than last year, to support the revitalization of key industries and the upgrading of their technologies. We will press ahead with trans-regional, cross-industry and cross-ownership mergers and reorganizations in industries such as coal, steel, cement, non-ferrous metals, petrochemicals, equipment manufacturing, shipbuilding and motor vehicles. We will encourage and support development of the real economy. We will promulgate and implement the plan for allocation of the productive forces and restructuring in key industries. We will support the key projects of industrial restructuring. We will continue to eliminate backward production facilities in accordance with the law. We will give impetus to changing the way energy is produced and used, and accelerate the development of modern energy industry and a comprehensive transportation system. In 2012, we will put into operation 6,366 kilometers of new railway lines, open 100,000 kilometers of new highways to traffic, and put into service four new civilian airports; and hydroelectric power will increase 56 billion kilowatt-hours, and nuclear electric power, 10.7 billion kilowatt-hours.

3) We will accelerate the development of the service sector. In 2012, the value-added of the service sector is expected to increase 7.9%, reaching 22.81 trillion yuan. We will promulgate and implement the plan for the development of the service sector in Twelfth Five-Year Plan period, and study support policies on further advancing pilot projects on the comprehensive reform of the service sector. We will formulate the list for encouraging the development of emerging industries and new business models in the service sector. We will develop national demonstration zones for service industries. We will work hard to develop high-tech services such as information services, R&D and design, inspection and testing, energy conservation and environmental protection, and e-commerce, and energetically develop modern logistics and domestic services.

4) We will improve the environment for the development of small and medium-sized enterprises (SMEs). We will give priority to supporting development of the real economy, particularly small and micro enterprises encouraged in our industrial policy. We will promote the establishment of a number of public service platforms for these enterprises. We will conscientiously implement and improve all the preferential tax policies for supporting their development; improve mechanisms for the credit support, credit guarantees, interest subsidies and loan-risk compensation for them; and actively yet prudently develop financing tools such as private equity, joint bonds for small enterprises and venture capital.

5) We will promote balanced development among regions. We will fully implement the plan for the large-scale development of the western region in the Twelfth Five-Year Plan period, quickly formulate detailed rules for implementing the policies on the large-scale development of the western region, begin construction on a number of major projects in the region, actively push forward the construction of infrastructure, and promote the development of industries that can take advantage of local strengths as well as social programs. We will organize the implementation of the plan to reinvigorate Northeast China in the Twelfth Five-Year Plan period; make coordinated efforts to promote transformation and upgrading of old industrial bases and sustainable development of cities once dependent on now-depleted mineral resources; and study the issue and formulate policies and measures for reinvigorating the region in the new decade. We will introduce the guidelines on further implementing the strategy for energizing development of the central region, and focus on coordinating the development of agricultural modernization, the new type of industrialization, and urbanization. We will actively support the eastern region in its efforts to transform the economy; accelerate industrial upgrading and institutional innovation; participate in international competition and cooperation at a higher level; and actively promote the pilot project to develop the marine economy. We will actively promote development of key areas in accordance with the requirements set in the Twelfth Five-Year Plan. We will get the eastern, central and western regions to make use of their own comparative advantages in industrial development, guide industries to relocate to the central and western regions in an orderly manner, and establish new mechanisms and platforms for industrial cooperation between regions. We will fully carry out the plan on one-to-one assistance to designated areas, and do a good job in such assistance in terms of people's livelihood, industries, education and health, science and technology, and culture, as well as officials and human resources; support leapfrog development and long-term stability in Tibet, Xinjiang and Tibetan ethnic areas in Sichuan, Yunnan, Gansu and Qinghai provinces; and increase support for the development in old revolutionary base areas, ethnic minority areas, border areas, poverty-stricken areas, reservoir areas, and areas where displaced people have been resettled. We will give more people work instead of relief subsidies and relocate more people from inhospitable areas as a poverty relief measure, and give priority to the projects that have a direct bearing on poor people's basic working and living conditions and the development in contiguous poverty-stricken areas with particular difficulties. We will do a good job in post-disaster recovery and reconstruction in Yushu, Zhugqu and Yingjiang. We will fully implement the national plan for developing functional zones (FZs), and accelerate formulation and implementation of relevant support policies; quickly formulate policies of management tailored to each of them and measures for performance assessment; complete the compilation of provincial FZ plans; and promote the development of FZs. We will actively yet steadily proceed with urbanization. By the end of 2012, the national urbanization rate is expected to reach 52.07%, up 0.8 percentage points.

6. We will work hard to advance energy conservation, emissions reduction and environmental protection, and accelerate the building of a resource-conserving and environmentally friendly society.

1) We will strictly implement the accountability system for meeting targets. We will quickly formulate and roll out a plan for keeping the total energy consumption within reasonable limits. We will carry out evaluations of provincial governments' work in meeting energy conservation and emissions reduction targets. We will push forward performance management concerning energy conservation and emissions reduction, and improve the evaluation mechanism and the reward and punishment system.

2) We will focus on key areas. We will implement the campaign to get 10,000 plus enterprises to save energy and lower carbon emissions, and carry out trials of an online system to monitor energy consumption among major energy consumers. We will promote energy efficiency labeling and certification of energy-efficient products. We will implement the green building agenda, expedite energy-saving renovation of existing buildings, and promote the development of new wall materials. We will do a good job in demonstrating and promoting new-energy vehicles. We will strongly support the development of public transportation, and provide incentives to scrap old motor vehicles. We will carry out the strictest possible system for managing water resources, and continue to intensively implement the campaign to get everyone to save energy and reduce emissions.

3) We will accelerate the development of key projects. We will intensify efforts to implement key projects for energy efficiency retrofitting, demonstration of industrializing energy-saving technologies, promoting energy-efficient products for the benefit of the people, energy performance contracting, and energy-saving capacity building. We will move ahead with the construction of urban facilities to treat sewage and garbage, and strengthen construction of desulphurization and denitrification facilities and oversight of their operations. In 2012, a total of 14.5 billion yuan of investment funds from the central government budget will be allocated for constructing facilities to treat urban sewage and garbage and building sewer lines; the percentages of urban sewage treated and urban household waste safely handled will reach 83% and 79%, respectively, up 0.4 percentage points and 1 percentage point.

4) We will energetically develop a circular economy. We will scale up the special fund for the development of a circular economy; accelerate the transformation of industrial parks to make their operations more circular; enhance the development of demonstration bases for recovering mineral resources from city waste; deepen the demonstration pilot projects of remanufacturing; promote the reuse of kitchen waste; and go ahead with the project to forge 100 demonstration bases and 100 key enterprises for comprehensive use of resources. We will work harder to demonstrate industrialization of clean production technologies and promote their application, and carry out projects to reduce production of major pollutants. We will push forward demonstration projects of seawater desalination. In 2012, water consumption per 10,000 yuan of value-added of industry will decrease 7.2% and the proportion of industrial solid waste that is comprehensively utilized will increase 1.02 percentage points.

5) We will strengthen policy guidance. We will intensify efforts to charge differential and punitive electricity rates, carry out trials to apply a premium rate to electricity generated by power plants having their flue gas denitrified, and appropriately raise fees on the discharge of nitrogen oxide and other pollutants. We will strictly implement the system for assessing and examining energy savings in fixed-asset investment projects; carry out trials for trading energy savings; vigorously support the development of non-fossil energy sources; and safely and effectively develop nuclear electric power.

6) We will strengthen ecological and environmental protection. We will vigorously press ahead with the prevention and control of heavy metal pollution, nonpoint source pollution in rural areas and water pollution in key watersheds, in particular major rivers and lakes, comprehensively utilize crop straw, and intensify efforts to clean up marine pollution. We will strengthen control of air pollution, and promote coordination between key areas in air pollution prevention and control efforts. We will continue to implement key ecological protection projects of consolidating the progress in returning cultivated land to forests, protecting virgin forests (the second phase), building forest shelterbelts, establishing a nature reserve to protect the sources of the Yangtze, Yellow and Lancang rivers in Qinghai province, and developing ecological shields in Tibet. We will enhance ecological improvement in key areas, including the upper and middle reaches of the Yangtze and Yellow rivers, the sources of dust storms affecting Beijing and Tianjin, karst areas being becoming stony deserts, the Loess Plateau, southern areas prone to slope failures, and chernozem areas in Northeast China. We will continue to push ahead the project to comprehensively restore the ecosystem of the Shiyang River and the project to rationally utilize water resources and protect the ecosystem in Dunhuang. We will press ahead with the work of restoring natural grasslands from grazing lands. We will promote legislation on ecological compensation mechanisms and implement the demonstration pilot projects of ecological conservation. We will intensify efforts to prevent and control geological disasters during flood season and in key areas. In 2012, we will bring soil erosion on areas of 50,000 square kilometers under control, and expand forest area by at least six million hectares.

7) We will work diligently to respond to climate change. We will implement the work plan on controlling greenhouse gas emissions for the Twelfth Five-Year Plan period, push forward with pilot projects and experimental zones for low-carbon development, explore ways to establish a carbon emissions trading market, quickly set up a statistical accounting system for greenhouse gas emissions, and implement a low-carbon campaign involving the whole society. We will take an active part in international cooperation in tackling climate change. We will conscientiously prepare for attending the United Nations Conference on Sustainable Development.

7. We will deepen reform in key areas and crucial links and improve the systems and mechanisms ensuring development in a scientific manner.

1) We will enhance overall guidance and comprehensive coordination of reform. We will implement the Guidelines on Priorities in Deepening Economic Restructuring in 2012, and push forward all types of experimental zones to carry out integrated, complete reforms.

2) We will further transform government functions, improve the macro-control system, balance the relationship between government and the market, and make better use of the basic role of the market in allocating resources.

3) We will adhere to and improve the basic economic system whereby public ownership is dominant and economic entities under diverse ownership forms develop side by side. We will further strategically adjust the public sector of the economy, promote the reform to introduce corporate and joint-stock systems in SOEs, and improve the budget and revenue-sharing systems for state-owned capital operations. We will study and formulate a plan for reforming the railroad system in accordance with the principle of separating government functions from enterprise management and state asset management. We will steadily roll out the trials of separating electric power transmission from distribution, promote the establishment of a new mechanism for ensuring that electricity generated from distributed energy sources has non-discriminative, impediment-free access to power grids, and formulate and roll out guidelines for reforming the rural electricity management system. We will expand the trials for integrating the telecommunications network, the radio and television broadcasting network, and the Internet. We will implement and improve policies and measures to promote the development of the non-public sector of the economy, and enhance the vitality and competitiveness of the non-public sector and SMEs in market competition, creating more jobs and stimulating economic growth.

4) We will steadily advance the reform of prices for resource products and environmental protection charges. We will accelerate the reform of prices for selling electricity to end-users, implement trials of progressive pricing for household electricity consumption, and improve the pricing mechanisms for electricity generated from nuclear power, hydropower and other renewable energy sources. We will actively yet prudently carry out reform of prices for electricity transmission and distribution and promote public bidding among power plants for the right to supply electricity to power grids. We will introduce a plan for reforming the prices of refined petroleum products when conditions are right. We will gradually balance the prices of coal and power and make the price ratio of natural gas to alternative energy sources reasonable. We will continue to carry out trials for emissions trading.

5) We will deepen the reform of the income distribution system. We will raise the proportion of individual income in national income, raise the proportion of remuneration in the primary distribution, and improve the system for adjusting primary and secondary income distribution. We will steadily raise minimum wages, and gradually extend the scope of collective bargaining for wages. We will establish a mechanism whereby the public share the proceeds from the sale of public resources. We will create conditions to increase people's income from property. We will take further steps to adjust taxes for high-income groups, expand the proportion of middle-income groups, and raise the incomes of low-income groups. We will ensure that income distribution is governed by proper standards, effectively protect lawful income, and resolutely ban illegal income. We will quickly reverse the trend of a widening income gap.

6) We will continue to deepen reforms in pharmaceutical and health care systems. We will formulate and implement the plan for deepening the reform of pharmaceutical and health care systems in the Twelfth Five-Year Plan period. We will improve the national basic medical insurance system, and keep participation rates in the basic medical insurance schemes for working and non-working urban residents and the new type of rural cooperative medical care system all at 95% in 2012. We will further increase government subsidies for the basic medical insurance scheme for non-working urban residents and the new type of rural cooperative medical care system. We will explore ways to establish a social security mechanism against major and critical diseases and actively develop commercial health insurance. We will push forward the reform of public hospitals with county-level hospitals as the priority, and deepen the comprehensive reform of community-based medical and health care institutions. We will accelerate the development of a general practitioner system. We will consolidate and improve the basic drug system, and implement the policy of centralized purchase of basic drugs and multiple sources of compensation for medical institutions.

7) We will accelerate reform of the fiscal and financial systems. We will increase the size and proportion of general transfer payments and better ensure funding for county-level governments. We will improve the management system for budget compilation and implementation. We will advance the trial of replacing the business tax with VAT and expand the trial as appropriate. We will rationally adjust the scope of collection and rate structure of sales tax; deepen the reform of resource taxes and levy price-based taxes on more resources; and study and formulate a reform plan for taxes on home ownership and the transfer of ownership. We will develop financial institutions to serve small and micro enterprises as well as agriculture, rural areas and farmers in light of actual conditions; make innovations in services; guide large and medium-sized banks in extending their service networks; and standardize development of micro-credit companies and county banks. We will deepen market-based reform of interest rates and reform of the RMB exchange rate regime. We will steadily make the RMB convertible for capital accounts in an orderly manner, and expand the use of the RMB in cross-border trade and investment. We will promote sound development of multilevel capital markets, improve the bonus system in joint-stock enterprises, especially listed companies, and stabilize and enhance market confidence. We will strengthen and improve financial supervision and regulation and effectively prevent and promptly dissolve potential financial risks.

8) We will deepen rural reforms. We will stabilize and improve the rural land contract relationships; steadily extend trials for registering contracted rural land-use rights; guide transfers of land-use rights which are legal, voluntary and compensated, in a standardized, orderly manner; and strengthen management of and services for these transfers. We will improve the system for construction and management of water conservancy projects. We will continue to advance comprehensive rural reforms, deepen the reform of tenure in collective forests, stabilize and improve the system in which pastureland is contracted out to individual households, and promote the reform of state-owned farms, forestry farms and forest regions.

8. We will implement a more active opening up strategy and make our economy more open.

1) We will maintain steady development of foreign trade. We will continue to implement policies and measures on export tax rebates, export credit and export credit insurance; stabilize export growth; and optimize the export mix. We will continue to strictly control export of products whose production is energy-intensive or highly polluting. We will actively expand imports, improve import-related polices and measures on interest subsidies, credit and tariffs; and increase import of important resources, advanced technology and equipment, key spare parts and components, and agricultural products in short supply at home. We will vigorously develop service trade and service outsourcing. We will expand international exchanges and cooperation, promote negotiations on free trade zones, and properly handle trade frictions.

2) We will make better use of foreign capital and improve its performance. We will constantly expand external economic and technological cooperation, guide foreign investment toward high-end manufacturing, high-tech industries, modern services, new energy sources, energy conservation and environmental protection, and toward the central, western and northeastern regions. We will further open coastal areas, open the inland wider to the outside world, introduce guidelines on the development and opening up of border areas, promote development of cross-border economic cooperation zones, and support infrastructure connectivity with neighboring countries. We will improve the management system for foreign-invested projects, and make good use of the security review mechanism for mergers and acquisitions involving foreign capital. We will improve the unified management of foreign debts and use foreign loans more efficiently. In 2012, non-financial foreign direct investment is expected to reach US$120 billion, up 3.5%.

3) We will expedite the implementation of the "go global" strategy. We will push ahead with major bilateral investment and cooperation projects. We will improve the management system for Chinese investment overseas, innovate the way overseas economic and trade cooperation zones develop, and establish sound mechanisms for assessing overseas investment risks and responding to emergencies. We will continue to do a good job of providing aid to other countries. In 2012, China's non-financial direct investment overseas is expected to reach $66 billion, up 10%.

9. We will work hard to ensure and improve the people's wellbeing, and further raise the living standards of urban and rural residents.

1) We will implement the strategy of giving priority to employment. We will vigorously develop labor-intensive industries, SMEs, innovative science and technology enterprises, and service industries that can provide a large number of jobs. We will improve services and professional skills training for college graduates, rural migrant workers, urban residents who have difficulty finding jobs and other target groups to help them find jobs or start their own businesses, train and foster skilled personnel, and implement the policy for promoting entrepreneurship. We will establish a unified, standardized and flexible human resources market, push forward the development of a primary-level employment service system, and improve the mechanism for coordinating labor relations.

2) We will improve the social security system. We will turn over unified management of social security accounts to higher-level authorities and improve social security benefits, and increase subsistence allowances for urban and rural recipients and subsidies for entitled groups. We will actively yet prudently push forward the reform of the old-age insurance system for public institutions and the pilot project of medical assistance for major and critical diseases. We will enhance our ability to provide social security services. We will actively develop programs for the elderly, accelerate development of a social service system for them, and support the development of rehabilitation and nursing care facilities for people with disabilities and centers for recuperation from work injuries. We will increase government subsidies for medical insurance for non-working urban residents and the new type of rural cooperative medical care system to 240 yuan per person per year. In 2012, the new type of rural old-age insurance and the old-age insurance for non-working urban residents will cover all counties or county-level cities and districts of the country; the numbers of those covered by basic urban old-age insurance, basic urban medical insurance, unemployment insurance, workers' compensation, and the new type of old-age insurance for rural residents will increase 5.4%, 1.5%, 2.5%, 4.6% and 10.3%, respectively; and the number of service facilities for people with disabilities will reach 3,410, up 5.6%, and the number of nursing home beds per 1,000 elderly people will reach 22.1, up 10%.

3) We will press firmly ahead with the development of low-income housing projects. We will speed up the preliminary work; guarantee land supply; increase fiscal and financial support; encourage non-governmental sectors to participate in the construction of low-income housing projects and supporting facilities; and put in place sound mechanisms for investment in, financing for, and construction, operation, distribution and management of low-income housing, to ensure its quality and safety and equitable distribution. We will accelerate the renovation of run-down areas and dilapidated houses in rural areas and state-owned land reclamation zones and forest regions, and the construction of permanent homes for nomadic families. We plan to allocate 69 billion yuan of investment funds from the central government budget to low-income housing projects, an increase of 10 billion yuan over last year.

4) We will consolidate and build on the achievements made in real estate market regulation. We will continue to strictly implement and gradually improve policies and measures to curb speculative or investment-driven housing demand, improve measures for overseeing real estate prices, and encourage and support the development of small and medium-sized general commodity housing at low- and medium-price levels to rationalize housing prices. We will quickly study and establish a long-term mechanism to promote sound development of the real estate market.

10. We will comprehensively strengthen social development, and raise our capacity for providing public services and the level of public services.

1) We will accelerate the reform and development of education. We will further increase funding for education, and in 2012, government spending on education nationwide as a percentage of GDP will reach 4%, with education accounting for about 7% of investment funds from the central government budget. We will give preference to schools in the central and western regions, rural areas, remote areas, and ethnic minority areas, and to weak urban schools when allocating compulsory education resources. We will consolidate the progress in making compulsory education universally available, continue to implement the project to ensure the safety of primary and secondary school buildings, promote standardization of compulsory education schools, make rational development plans for boarding schools, and increase construction of dormitories for teachers at rural schools in remote and hardship areas. We will work to set up a sound school bus management system. We will establish a sound long-term mechanism for ensuring that rural students receiving compulsory education have nutritious food in their schools. We will improve the infrastructure for vocational education as well as operating conditions for senior secondary schools in counties of ethnic minority areas where the educational infrastructure is weak. We will promote the development of preschool education in rural areas; improve the special education system; implement the project to alleviate poverty through education in contiguous areas with particular difficulties; support colleges and universities in the central and western regions in improving their conditions; and work to make education more IT-based. In 2012, the retention rate of nine-year compulsory education will reach 91.8% and the gross enrollment ratio for senior secondary education will reach 85%. Plans call for enrolling 6.85 million undergraduate students and 584,000 graduate students in regular institutions of higher learning.

2) We will improve the system for medical and public health services. We will strengthen health emergency response and prevention and control of major diseases. We will speed up the development of the children's medical service system, the major disease prevention and control system, and the community-based medical and health service system; and carry out the basic and major public health service projects. We will continue to develop the population and family planning service system, make the free cervical cancer and breast cancer screenings available to a larger number of women in rural areas, and extend the pilot project of free pre-pregnancy checkups to cover 60% of the counties or county-level cities and districts nationwide. In 2012, we will allocate 23 billion yuan of investment funds from the central government budget to support the development of medical and health care. The number of hospital and clinic beds per 1,000 people will reach 3.72, up 6%, and the number of general practitioners per 10,000 people will reach 0.89.

3) We will promote the great development and flourishing of socialist culture. We will promote the development of the system of core socialist values; deepen reform of the cultural system; and vigorously develop nonprofit cultural programs and improve the public cultural service system covering both urban and rural areas. We will continue to implement key cultural projects that benefit the people, including the national cultural information resource sharing project and the project to extend radio and television coverage to all villages. We will launch the project to build prefecture-level libraries, cultural centers and museums. We will strengthen the protection of all forms of cultural and natural heritage; promote the flourishing of philosophy and the social sciences; and actively develop the press and publishing, radio and television, and literature and art. In 2012, radio and television coverage will reach 97.26% and 97.92% of the population, respectively. We will promote restructuring of cultural industries and innovation in cultural science and technology; vigorously carry forward the fine traditional culture of the Chinese nation; implement a number of major cultural industry projects; develop and expand traditional cultural industries; quickly foster new forms of cultural businesses; and promote integrated development of cultural and other industries. We will improve the public sports service system and elevate the level of recreational sports.

4) We will strengthen and make innovations in social administration. We will compile and implement a plan for a national basic public service system; enhance the development of service platforms for primary-level social administration, which focus on urban and rural communities; and promote the sharing of public service information and social administration information. We will advance the development of a national credit system, and guide the standardized development of social organizations. We will improve the comprehensive system for natural disaster prevention and mitigation. We will enhance assessment and dynamic monitoring of social development situations and potential risk points; properly handle the legitimate and reasonable complaints and demands of the people; and do a good job in public order, workplace safety, food and drug safety oversight, and emergency response management, in order to safeguard social harmony and stability.

We will continue to increase exchanges and cooperation between the mainland and the Hong Kong and Macao special administrative regions in economy and trade, science and technology, education, culture, health and sports, and implement the preferential measures outlined in the Closer Economic Partnership Arrangements and their Additional Protocols. We will support Hong Kong in further consolidating and elevating its position as an international financial, trade and shipping center, and enhance cooperation between the mainland and Hong Kong in infrastructure development. We will support Macao in building itself into a world center of tourism and leisure and appropriately diversifying its economy. We will deepen economic and cultural cooperation and exchanges between the two sides of the Taiwan Straits, constantly improve the level of economic, trade and industrial cooperation between the two sides, and support the Western Taiwan Straits Economic Zone in playing its role in leading the way and exploring new paths for cross-Straits exchanges and cooperation.

Fellow Deputies,

To accomplish all the work for economic and social development in 2012 will be an arduous task and a great responsibility for us. We will unite even closer around the CPC Central Committee with Comrade Hu Jintao as General Secretary, hold high the great banner of socialism with Chinese characteristics, follow the guidance of Deng Xiaoping Theory and the important thought of Three Represents, thoroughly apply the Scientific Outlook on Development, accept the guidance and supervision of the NPC conscientiously, and seek comments and suggestions from the CPPCC National Committee members with an open mind. Let us forge ahead with confidence and a pioneering spirit and work hard to achieve the targets for economic and social development so that we can greet the coming Eighteenth National Congress of the CPC with outstanding achievements.

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