Social programs developed faster than before. Steady progress was made in promoting education reform and development. In 2012, government spending on education reached the target of 4% of GDP, and the three-year safety renovation program for primary and secondary school buildings was basically completed. We continued to build dormitories for teachers at rural schools in remote areas and areas with harsh conditions, promote rural preschool education, and carry out the pilot project to improve nutrition for rural students receiving compulsory education. We promulgated and implemented the regulations on ensuring school bus safety. The tuition exemption policy for secondary vocational education was extended to cover all rural students. We basically solved the problem of ensuring children of rural migrant workers have access to compulsory education in cities where they live, and worked in an orderly manner to help these children take part in local high school and college entrance examinations. The retention rate of nine-year compulsory education was 92%, up 0.5 percentage points over the previous year, the gross enrollment ratio for senior secondary education reached 85%, up 1 percentage point, and regular undergraduate and graduate enrollment totaled 6.888 million and 590,000, respectively, all meeting the targets. We improved our ability to provide medical and health care services. The community-level medical and health care service system was further improved in urban and rural areas. We accelerated development of the emergency medical service system in rural areas, the prevention and control system for major diseases, health oversight institutions at the county level, and the children' s medical service system. We gradually tied in information about medical services, drug oversight, medical insurance, public health, and overall medical management. Training of general practitioners was intensified. Hospitals and health clinics provided 3.73 beds per 1,000 people, up 6.6% year on year. The public cultural services system continued to improve. We continued to extend radio and television coverage to villages. We supported ethnic minorities' capacity building in the press and publishing, and also supported development of prefecture-level facilities for public cultural services and facilities for preserving national cultural and natural heritage sites. We started implementing the fifth phase of the Tibet-Xinjiang Project to extend radio coverage in the western region. Museums, libraries, and cultural centers were opened to the public free of charge. The culture industry system further improved, and the culture industry as a whole grew in both scale and strength. We promulgated and implemented the plan for improving tourism infrastructure and the plan for carrying out the second phase of the project to develop tourist sites related to the early history of the CPC. Annual income from tourism totaled 2.59 trillion yuan, an increase of 15.2% over the previous year. Public sports venues of all kinds exceeded one million. The natural population growth rate, which met the target, was 4.95 per thousand.

Over the past year, the Central Committee of the Party and the State Council united with and led the people of all ethnic groups in China in implementing the Scientific Outlook on Development; accelerating the change of the growth model; correctly handling the relationships between ensuring steady and rapid economic development, adjusting the economic structure, and managing inflation expectations; and overcoming various difficulties and adverse effects. The national economy showed a good momentum of stabilized growth, improved structure, stable prices, and improved people's lives. These hard won achievements can be attributed to the broad vision and scientific policymaking of the Central Committee of the Party and the State Council, to the close cooperation and solid work of all regions and departments, and to the unity and hard work of the people of all ethnic groups in China.

At the same time, we are keenly aware that China still faces many risks and challenges in its development.

The world financial crisis is continuing to have a profound effect, the global economy is growing sluggishly, latent inflationary pressure is on the increase, developed economies are subject to high fiscal and financial risks, and protectionism in international trade and investment has intensified.

Domestically, unbalanced, uncoordinated, and unsustainable development remains a serious problem, and is very acute in some areas.

First, the foundation for economic turnaround is not firm. Consumption is unable to provide a very strong impetus to economic growth, enterprises are less able and willing to invest, and external demand will not change for the better in the near future.

Second, some enterprises have difficulties with their production and operations. The rising cost of factors of production and weak innovation capabilities have caused a profit squeeze among enterprises. The proportion of loss-making large industrial enterprises has increased by 2.2 percentage points over the previous year, and the difficulties of small and micro businesses have been even more severe.

Third, overcapacity is a serious problem. Traditional manufacturing industries, especially those that are energy intensive and have high emissions, are plagued by overcapacity, and some emerging industries are undergoing haphazard development, thus making it difficult to improve enterprises' performance and industrial competitiveness.

Fourth, it has become harder to promote steady growth of agricultural production and increase rural income. Arable land, fresh water, and other natural resources are highly strained, agricultural infrastructure is weak, and increases in rural residents' income from both agricultural and nonagricultural work may slow down. In addition, slowing economic growth and enterprises' difficulties will continue to affect employment over time. The imbalance between government revenue and expenditures is serious. Latent risks exist in the financial sector. The need to protect the ecological environment is pressing. Some cities are under pressure for housing prices to rebound. The problem of various kinds of wastefulness is staggering. Many issues concerning land expropriation, housing demolition, workplace safety, food safety, and income distribution have quite an impact on social harmony and stability.

We must take these problems very seriously and adopt measures to solve them.