Major strides were made in the field of independent innovation. Detailed provisions for the implementation of policies to support independent innovation were released. Preliminary deliberations were launched for 16 major science and technology projects. The central and local governments earmarked 126.038 billion yuan for science and technology, a year-on-year increase of 26.2%. National engineering research centers for projects such as medical ultrasound and fuel cells were established, and technology centers of 92 more enterprises received state recognition. A pilot project to nurture the first group of innovation-based enterprises was launched. Major innovation results were achieved in the demonstration project of the next-generation Internet and the development and manufacture of the Goodson-2 general purpose high-performance microprocessor chip. The Experimental Advanced Superconducting Tokamak, the first of its kind in the world, was developed.

The service sector enjoyed steady development. Its scale continued to expand, with a total added value of 8.2703 trillion yuan, an increase of 10.3%. Its structure and service quality were also improved. Transport capacity of the national transportation system was notably increased, evidenced by the following. An additional 93,700 kilometers of highways were built, including 4,325 kilometers of expressways; newly built railways opened to traffic totaled 1,605 kilometers, and double-track railways 705 kilometers; 252 berths were added or expanded at seaports, including 144 deepwater berths catering to tonnage exceeding 10,000; renovation and expansion work at Capital Airport of Beijing and Pudong Airport of Shanghai progressed smoothly; and five branch-line airports in the middle and western parts of the country, including Nyingchi Airport in the Tibet Autonomous Region, were put into operation. Development of service industries related to business and production such as logistics, banking, insurance and information services was accelerated. A variety of new businesses and new products emerged in the consumer service industry.

Fresh achievements were made in balancing regional development. Formulation of the plan for the large-scale development of the western region during the Eleventh Five-Year Plan period was completed, and 41% of investment funds from the central government budget and from the sale of treasury bonds for the year were spent in the western region. Construction was started on all 12 key projects designated early last year. Industries taking advantage of local characteristics and strengths enjoyed accelerated development, progress in returning farmland to forests was consolidated and pilot projects to promote subsistence grain farming in the western five provinces and autonomous regions were launched. In northeast China and other old industrial bases, progress was made in trials to transform the economies of cities reliant on natural resources, in addressing the problem of sinkholes in coal mining areas, and in turning shantytowns into proper residential areas and key enterprises strengthened their capacity for independent innovation and their production and manufacturing capacities. Implementation of the strategy for the rejuvenation of the central region was initiated. Guidelines for boosting development of the central region were issued, and support policies were clarified. The eastern region continued to lead development, and rapid progress was made in the trial reforms for comprehensive and sustainable development in the Binhai New Area of Tianjin and the Pudong New Area of Shanghai.

4. Work related to social programs and people's well-being was strengthened.

Progress was made in education development, which is a national priority. The goal of making nine-year compulsory education generally available and basically eliminating illiteracy among young and middle-aged adults was realized in an additional 83 counties. Reform of the mechanism to guarantee funding for compulsory education in rural areas got off to a good start, benefiting 52 million elementary and middle school students in 2006. Each elementary school student paid 140 yuan less on average, and middle school student 180 yuan. A total of 37.3 million students from poor rural families in the central and western regions received free textbooks and 7.8 million rural students living on campus were provided with living allowances. A fund of 4 billion yuan from the central government budget was invested to support the building of 2,858 boarding schools and facilities for providing modern distance learning at 85,800 elementary and middle schools. A further 2.85 billion yuan from the central government budget was allocated to fund the construction of 321 practice laboratories for vocational education, 28 demonstration vocational colleges, 478 secondary vocational schools and county-level vocational education centers. The secondary gross enrollment ratio reached 59%, and the tertiary gross enrollment ratio 22%.