II. Overall Requirements and Major Objectives for Economic and Social Development in 2008

In pursuing economic and social development in 2008, we must fully implement the guidelines adopted at the Seventeenth Party Congress, hold high the great banner of socialism with Chinese characteristics, take Deng Xiaoping Theory and the important thought of Three Represents as our guide and thoroughly apply the Scientific Outlook on Development. We will focus our efforts on transforming the pattern of economic development and improving the socialist market economy. We will continue to strengthen and improve macroeconomic regulation, work vigorously to advance reform and opening up and strengthen the country's capacity for independent innovation, and work hard to improve the economic structure and quality of economic growth. We must intensify efforts to save energy, reduce emissions and protect the environment. More attention will be paid to enhancing people's wellbeing and promoting social harmony as we strive for sound and fast economic development.

In view of the above requirements and what is needed versus what is possible, and in conformity with the Outline of the Eleventh Five-Year Plan for National Economic and Social Development, we have set the following major objectives for economic and social development in 2008:

- Raising the quality of economic growth. We need to further improve the economic structure, accelerate the development of tertiary industry, increase the contribution of high-tech industries to the economy and increase R&D expenditures as a percentage of GDP to 1.6 percent. Energy consumption per unit of GDP, sulfur dioxide emissions and chemical oxygen demand should fall by a larger margin than last year. Government revenue and corporate profits are expected to grow steadily. On the basis of structural improvement, improved efficiency, lower energy consumption and environmental protection measures, China's GDP is expected to grow by about 8 percent in 2008. A major reason for introducing the above targets for economic development is to communicate to society the government's regulatory intentions and guide all sectors to focus their work and attention on transforming the pattern of development, improving the quality of economic growth, saving energy and reducing emissions in order to achieve both sound and fast development. All local authorities should set targets for local GDP growth at an appropriate level in line with local conditions and avoid blind competition and setting targets at each administrative level that are too high.

- Continuing to improve people's lives. Urban employment should expand by 10 million new jobs and the urban registered unemployment rate should stay at about 4.5 percent. The incomes of urban and rural residents should continue to increase fairly fast. Per capita net income of rural residents should increase by 6 percent or more in real terms. The new system of rural cooperative medical care should cover all rural areas and will receive more subsidies from the central and local government budgets. The number of rural people living in poverty should be reduced by 2 million or more. Fiscal guarantees to ensure adequate funding for compulsory education in rural areas will be strengthened. The program of free education for urban students taking compulsory education will be fully instituted. Natural population growth should stay within 7‰. The major factors taken into consideration in setting the above goals are: national economic growth has been steady and fast for several years in a row, the financial strength of the country has further increased, the performance of enterprises has markedly improved and the impact of the vigorous employment policy is becoming increasingly noticeable. In addition, the implementation of policy measures to promote increase in people's incomes, especially that of farmers, and strengthen the social safety net has made it necessary and created the conditions for us to further expand employment, increase the incomes of urban and rural residents and address issues affecting people's wellbeing such as education and medical care.