5. Putting the people's interests first and striving to ensure and improve their wellbeing

We made expanding employment the top priority in ensuring and improving people's wellbeing and pursued a proactive employment policy. Over the past five years, we allocated 197.3 billion yuan of employment funds to help targeted groups obtain employment and to improve vocational training and employment services. As a result, 28 million university graduates and 8.3 million urban residents having difficulty finding jobs found employment. All this kept the overall employment situation stable.

We made comprehensive progress in developing the social security system: A new old-age insurance system for rural residents and an old-age insurance system for non-working urban residents were established, and the basic old-age insurance system now covers both urban and rural residents. A total of 790 million people are now covered by different old-age insurance schemes. Basic pensions for enterprise retirees rose from an average of 700 yuan per month in 2004 to 1,721 yuan at present. We extended social security coverage to retirees of closed or bankrupt enterprises, employees of enterprises with operating difficulties, employees of state-owned enterprises who suffered work-related injuries in the past, and uninsured retirees of collectively owned enterprises.

We deepened reform of the medical and health care systems, established a new type of rural cooperative medical care system and a basic medical insurance scheme for non-working urban residents. A basic medical insurance system that covers the whole population is taking shape, and over 1.3 billion people are now covered by different medical insurance schemes. We improved community-level medical and health care services, and established a system for using basic drugs and implemented it in community-level medical institutions. Steady progress was made in the trial reform of public hospitals. People's health further improved, and the average life expectancy reached 75 years.

The systems for aiding needy rural and urban residents with subsistence allowances, medical care, education and legal assistance were improved. We reformed and improved systems for providing social security to orphans, helping and protecting homeless children, and giving childless and infirm rural residents assistance in the form of food, clothing, medical care, housing, and burial expenses.

We promulgated and implemented new programs for the development of Chinese women and children, and protected their legitimate rights and interests in accordance with the law.

We established a sound government-subsidized urban housing system and extended it to cover 12.5% of the country's urban households by the end of 2012.

Historic achievements were made in developing the social security system. We strengthened and made innovations in social management, put in place a sound emergency response system, encouraged urban and rural communities to fully play their self-governance and service roles, and maintained social harmony and stability.

6. Deepening reform in key areas and enhancing the vitality of economic and social development

We lost no opportunity to carry out reform and achieved great progress in a number of key areas.

We vigorously reformed the fiscal and taxation systems, improved the system of transfer payments and established a mechanism for ensuring basic funding for county-level governments across the country. County- and township-level governments became more capable of providing basic public services. We put in place the basic framework of a system of budgets for public finances, government-managed funds, state capital operations and social security funds, and all extrabudgetary funds were placed under budgetary management. We unified the corporate tax systems for domestic and overseas-funded enterprises, implemented VAT reform, reformed pricing of refined oil products and related taxes and fees, carried out pilot projects to replace business tax with VAT, and reformed the resource tax system. This strengthened the role of the fiscal and taxation systems in accelerating the change of the growth model.

We comprehensively deepened reform of the financial system. Specifically, we smoothly completed the transformation of large state-owned commercial banks into joint-stock companies and carried out reform of policy-based financial institutions in an orderly way. We made notable achievements in reforming rural credit cooperatives, implemented new oversight and supervision standards in the banking industry, launched the ChiNext stock market, and introduced stock index futures and securities margin trading. We deepened reform of the insurance industry and opened it wider. We improved the mechanism for setting the RMB exchange rate, made steady progress in making interest rates more market-based and promoting the RMB's convertibility under capital accounts, established a macroprudential policy framework, and expanded the use of the RMB in cross-border trade and investment. China's banking, securities and insurance industries became significantly more resilient to risks and internationally competitive, and they underpinned our successful response to the global financial crisis.

Reform of state-owned enterprises deepened, their performance improved and their competitiveness was significantly enhanced. We formulated the Guidelines on Encouraging and Guiding the Sound Development of Nongovernmental Investment and rules for their implementation, and the environment for the development of the non-public sector of the economy improved. We adopted a system for compensating for ecological damage and carried out trials for trading pollution discharge and carbon emission rights. We carried out function-based reform of public institutions.

7. Unswervingly opening wider to the outside world and comprehensively improving the performance of the open economy

We actively responded to drastic changes in the external environment, promptly introduced policies and measures to stabilize external demand, and implemented the strategy of diversifying markets. During the past five years, China's import and export volume grew by an annual average of 12.2% and rose from third to second place in the world. China has become the largest exporter in the world, and its international market share increased by over two percentage points over 2007. China's import and export mix improved, and its status as a trading power was further strengthened.

Over the past five years, we utilized US$ 552.8 billion of foreign investment, considerably improved the structure and distribution of this investment, and made much better use of it.

We quickened the implementation of the "go global" strategy and encouraged enterprises of various types to invest and operate overseas. Non-financial outward direct investment increased from $24.8 billion in 2007 to $77.2 billion in 2012, growing at an average annual rate of 25.5%. This turned China into a major overseas investor country.

Opening up vigorously stimulated China's economic development and structural improvement, brought in advanced foreign technologies and managerial expertise, and increased employment and workers' income, and also made an important contribution to global economic recovery.

8. Effectively strengthening governance and deepening reform of the administrative system

We proceeded with the reform of government agencies and put in place the basic institutional framework for establishing larger government departments that integrate the functions smaller ones had performed. We always observed the following basic norms in exercising governance: making policy decisions scientifically and democratically, conducting administration in accordance with the law, promoting transparency in government operations, improving the oversight system and upholding integrity. We adopted new measures and made new progress in exercising government power according to due procedures and in building a service-oriented, accountable, law-based and clean government. We took the following steps to improve government decision-making procedures: making policy decisions scientifically and democratically in accordance with the law; soliciting opinions from the public; and conducting expert evaluation, risk assessment, legality review, and collective discussion.

We deepened reform of the system of review and approval by government bodies and eliminated or streamlined 498 items requiring such review and approval in two stages over the past five years. Departments of the State Council eliminated or streamlined 2,497 items requiring their review and approval, 69.3% of the original total.

We took major steps to increase transparency in government operations, with the focus on government budgets and final accounts, as well as on expenditures for official hospitality, purchase and use of official cars, and overseas trips for official purposes. This made it possible for the people to learn more about how the government functions, and thus more effectively oversee its operations.

Auditing oversight was intensified and became more effective. We comprehensively intensified efforts to fight corruption and build a clean government, and strengthened oversight and supervision of leading officials to ensure that they maintain personal integrity and are self-disciplined. We took steps to put in place a system of performance-based management of government officials, established and earnestly enforced the system of governance accountability focusing on leading government officials, and improved efficiency in governance.

Fellow Deputies,

Over the past five years, we implemented the Law on Regional Ethnic Autonomy, improved the policy system for supporting the development of ethnic minorities and ethnic minority areas, and infused new vitality into the cause of promoting unity and progress of ethnic groups in China.

We comprehensively carried out the policy on freedom of religious belief and managed religious affairs on a more law- and procedure-based basis.

We implemented the policy on overseas Chinese affairs in both letter and spirit, protected the legitimate rights and interests of overseas Chinese and those who have returned to China and their families; and we put their unique strengths to better use.

New progress was made in strengthening national defense and the armed forces. Major achievements were made in the revolution in military affairs with Chinese characteristics. The armed forces made coordinated and all-around progress in becoming more revolutionary, modernized and procedure-based. They deepened their military preparedness, greatly enhanced their ability to carry out their historic mission in the new stage in the new century, and accomplished a number of urgent, difficult, and hazardous tasks.

We strengthened our work related to Hong Kong, Macao and Taiwan. Hong Kong and Macao are thriving and stable, and their exchanges and cooperation with the mainland reached a new height. We achieved a major transition in relations between the two sides of the Taiwan Straits. Complete, direct and two-way links of mail service, transport and trade were established, and the Economic Cooperation Framework Agreement was signed and is being implemented. This extended cross-Straits exchanges to all areas and ushered in a new stage of peaceful growth of cross-Straits relations.

Major new progress was made in China's all-around diplomacy. We vigorously developed our relations with other major countries, enhanced mutually beneficial cooperation with our neighbors, and successfully established the China-ASEAN Free Trade Area. We spurred the development of the Shanghai Cooperation Organization and other mechanisms for promoting regional cooperation, and deepened our traditional friendship and cooperation with other developing countries. We actively participated in international cooperation on global issues like the global financial crisis and climate change and helped resolve international and regional hotspot issues. We thus fostered an international environment favorable for China's reform, development and stability and made a significant contribution to world peace, stability, development and prosperity.

Fellow Deputies,

Our achievements over the past five years did not come easily. We owe them to the broad vision and correct leadership of the Party Central Committee and the concerted efforts and arduous work of the whole Party and the people of all ethnic groups in China. On behalf of the State Council, I extend my sincere gratitude to all workers, farmers, intellectuals, officials, and members of the People's Liberation Army, armed police and public security police. I extend my heartfelt thanks to the people of all our ethnic groups, the democratic parties, people's organizations and leading figures in all sectors of society. I express my sincere thanks to our compatriots in the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan, as well as overseas Chinese. I also extend my sincere appreciation to foreign governments, international organizations and foreign friends that have shown understanding for and supported China's modernization drive.

We are keenly aware that we still face many difficulties and problems in our economic and social development. In particular:

-- Unbalanced, uncoordinated and unsustainable development remains a prominent problem.

-- There is a growing conflict between downward pressure on economic growth and excess production capacity.

-- Enterprises' operating costs are increasing and their capacity for innovation is weak.

-- The growth of government revenue is slowing down while fixed government expenditures are increasing.

-- There are potential risks in the financial sector.

-- The industrial structure is unbalanced.

-- The agricultural foundation is still weak.

-- Economic development is increasingly in conflict with resource conservation and environmental protection.

-- The development gap between urban and rural areas and between regions is large, and so are income disparities between individuals.

-- Social problems have increased markedly, and many problems in the areas of education, employment, social security, medical care, housing, the environment, food and drug safety, workplace safety, and public order affect people's vital interests. Some people still lead hard lives.

-- There are many systemic and institutional obstacles to developing in a scientific way.

-- The transformation of government functions has not been fully carried out, and some areas are prone to corruption.

Some of these problems have built up over time, while others have emerged in the course of economic and social development, and still others have been caused by inadequacies and weaknesses in our government work. We should have a strong sense of responsibility toward our country and people, work harder and solve these problems more quickly in order to meet people's expectations and never let them down.