From the perspective of social relations, there are complicated reasons for the large income gap between different social groups, but this problem is largely blamed on the outdated income distribution system and the government's poor efforts in income distribution regulations. As for the problem of education, many families find it is too expensive because the government hasn't taken on the full responsibility of compulsory education. When it comes to health care, the irrational distribution of medical resources, the incomplete health insurance system and the lack of an effective basic medical system make it almost inaccessible to ordinary people. Also, the poor operation of the market economy should be blamed on the incomplete credit mechanism and the lack of a feasible mechanism for penalizing bad credit. After a specific analysis, we find that many causes can be found to various problems, but as a whole, none of the problems should be attributed to the reform direction. Instead, to a large extent, these problems should be attributed to incomplete reforms and ineffective measures, so their solution relies on the deepening of reform and the promotion of development.

Innovation to development is as important as reform is. Since China adopted the policy of reform and opening up in the late 1970s, great changes have happened to the country's sci-tech development levels and the technical composition of the industrial structure, with the quality of labor being greatly improved. However, on the whole, against the background of fast sci-tech development, increasingly limited resources and deteriorating eco-system, and fierce international competition featuring innovation and technological updating, the poor innovative capability is increasingly becoming the bottleneck for China's future development. As we know, during the current international division of labor, China is playing the role of manufacturer and processor of primary industrial products, providing resources and simple mechanical products to the international market. When trading with other countries, we have to offer a large quantity of tangible materials and resources in exchange for knowledge and technology-based products from developed countries. If China remains such a player for long, it will soon run out of its mineral resources and also damage the ecological environment.

China is now the major material producer rather than the producer of skilled labor. The demand for rapid development has thrown China into this situation. Thus, how to avoid the fate predicted by the theory of international division of labor is a realistic problem facing the Chinese. To enhance its independent innovative capability is the urgent demand for the acceleration of the transformation of the economic growth model. This is needed to strengthen China's national comprehensive strength and competitiveness and for the country's economic security in the face of tough international competition.

Road of peaceful development

China's rising status on the world stage puts this question before the international community: What road will China pursue to achieve its development, what responsibilities will it shoulder for the world community and will it act as a force to maintain world peace and prosperity? Premier Wen reiterates that China pursues a road of peaceful development. The essence of the peaceful development is that China tries to achieve its own development by maintaining a peaceful international environment and also tries to promote world peace thorough its own development. China mainly depends on its own strength, reform and innovation for its development and at the same time it sticks to the opening-up policy. China carries out exchanges and cooperation with the rest of the world on the basis of equality and mutual benefit, with a view to achieving win-win cooperation and common development.

Why is it necessary to take the road of peaceful development and to strive for a harmonious world? From the internal perspective, it lies in the socialist nature of the state and also China's independent foreign policy of peace. It is also an inevitable choice for China to cope with the variable international situation as well as various challenges and risks it may meet in the international environment.

Why is it possible for China to pursue the "road of peaceful development"? As far as the domestic environment is concerned, after years' of effort, China has found a road of coordinated and sustainable development. In terms of its relationship with other countries, China upholds the principle of "peace, development and cooperation" and pursues the independent foreign policy of peace.

Premier Wen's explanation of the theory of "the road of peaceful development" reveals the historical necessity for China to follow this road. It is also a solemn commitment by the Communist Party of China, the Chinese Government and the Chinese people to the rest of the world.