We will promote improvement and upgrading of the industrial structure. We will keep to the new path of industrialization with Chinese characteristics and promote integration of IT application with industrialization. We will work to develop new- and high-technology industries, reinvigorate the equipment manufacturing industry, upgrade traditional industries and accelerate the development of service industries, particularly modern services. We will continue the major projects to apply high technologies in the production of new-type displays, broadband communications and network equipment, and biomedicine. We will get national new and high technology development zones to fully play their role in pooling resources, guiding development and boosting development in surrounding areas. We will promote domestic R&D and production of important equipment and key spare parts and components, with the focus on key areas such as large clean and highly efficient power generating units, high-grade digital machine tools and basic manufacturing equipment. We will give higher priority to geological work to improve prospecting for and exploitation of natural resources. We will strongly develop the modern energy and raw materials industries and better integrate the transportation system.

We will promote balanced development among regions. We will extensively promote the large-scale development of the western region, and launch a number of key projects and support the development of key areas on a priority basis. We will continue to protect natural forests, prevent and control desertification, and reverse and prevent the development of stony deserts, and will implement a follow-up policy to consolidate progress made in converting retired farmland to forests. We will implement the plan to reinvigorate northeast China, and support the development of advanced equipment manufacturing and modern agriculture and the economic transformation of areas depending on resources that are now exhausted. We will formulate and implement a plan to boost development of the central region and implement and improve relevant policies. We will encourage the eastern region to lead the country in development and improve its international competitiveness. We will give more support to old revolutionary areas, ethnic minority areas, border areas and poor areas to help them develop. We will adopt and implement a plan and policy for development priority zones.

4. Increasing efforts to conserve energy, reduce emissions and protect the environment, and ensuring product quality and safety.

This year is crucial for meeting the obligatory targets for energy conservation and emissions reduction set forth in the Eleventh Five-Year Plan, and we must increase our sense of urgency and intensify efforts to make greater progress.

First, we will implement the plan to close down backward production facilities in the electricity, steel, cement, coal and papermaking industries. We will also put in place a mechanism for closing down these facilities and improve and implement support policies and measures for shutting down enterprises. In addition, we will step up efforts to develop advanced production facilities in these industries in accordance with the plan.

Second, we will focus on energy conservation in key enterprises and construction of key projects. We need to accelerate work on the ten major energy conservation projects. We will increase the urban sewage treatment capacity and strive to reach the goal of 100% collection and treatment of sewage in 36 large cities within two years. Charges for discharging wastewater and for sewage treatment and garbage disposal will be appropriately raised. Building standards will be upgraded and strictly enforced to encourage the development of better wall materials and construction of energy-efficient buildings. We will make steady progress in reforming the urban heating system and public utilities.

Third, we will develop and apply advanced and appropriate technologies to save, replace and reuse resources and control pollution, and carry out projects to develop and demonstrate major energy conservation and emissions reduction technologies. We will energetically develop the energy conservation service industry and the environmental protection industry. We will develop clean and renewable energy sources such as wind power and solar energy.

Fourth, we will prevent and control pollution in key river valleys and regions, including the Huai, Hai, Liao and Songhua rivers, Tai, Chao and Dianchi lakes, the sources and routes of the South-to-North Water Diversion Project, and the Three Gorges Reservoir area. We will implement the master plan for protecting the environment of the Bohai Sea. National standards will have stricter limits for discharge of pollutants in key river valleys.

Fifth, we will intensify protection of rural drinking water sources, and work to control sewage and garbage pollution and industrial pollution in rural areas. We will also strengthen control of pollution from livestock and poultry farming and aquaculture as well as agricultural nonpoint source pollution.

Sixth, we will encourage and support the development of a circular economy and promote recycling and reuse of renewable resources. We will also promote cleaner production in all industries.

Seventh, we will strengthen efforts to protect, conserve and intensively use natural resources, including land, water, grasslands, forests and minerals, and take stern measures to combat illegal mining of mineral resources. We will effectively protect marine resources, use them wisely, and develop the marine economy. We will intensify China's basic research efforts in meteorology, earthquake science, and surveying and mapping to strengthen these areas.

Eighth, we will implement the national plan to respond to climate change to strengthen China's ability to respond to climate change.

Ninth, we will improve the mechanism for rewarding those who conserve energy and resources and protect the environment and punishing those who waste energy and resources and harm the environment. We will also employ statistical and monitoring systems for conserving energy and reducing emissions, and improve the auditing and supervision systems, increase law enforcement efforts, and tighten the accountability system for energy conservation and emissions reduction.

Tenth, we will enhance public awareness of the importance of a culture of conservation and encourage the entire nation to participate in building a resource-conserving and environmentally friendly society. Resource conservation and environmental protection must continue from generation to generation to make our mountains greener, waters cleaner and skies bluer.

We will intensify efforts to ensure product quality and safety.

First, we will accelerate efforts to formulate or update national standards for product quality and safety. This year, we will complete the formulation or updating of more than 7,700 national standards for the safety of food products, drugs and other consumer goods to put in place a sound system of standards for product safety. All requirements and testing methods for the safety and quality of food and other consumer goods will comply with international standards. China's exports will meet both international standards and the laws and regulations on technical standards of the importing countries.

Second, we will improve legal guarantees for product quality and safety. We need to promptly enact or revise laws and regulations pertaining to product quality and safety, and improve the mechanism for effectively coordinating administrative law enforcement and criminal justice to increase punishment for enterprises that violate such laws and regulations. Third, we will improve the oversight and control systems for product quality and safety. We will follow to the letter the regulations for issuing production permits and mandatory certificates and for registration and record keeping to strictly control market access. We will raise the requirements for production permits and tighten market access for products related to people's health and safety. We need to strengthen quality and safety oversight for essential products such as food and drugs, and strictly control the quality of exports and imports. We will diligently follow the accountability system for product quality and safety. It is imperative that the people feel confident about the safety of food and other consumer goods and that our exports have a good reputation.

5. Deepening economic reform and opening wider to the outside world.

It has been 30 years since China introduced the reform and opening up policy, which has brought about great historic changes to the country. However, China is still in the primary stage of socialism and will remain so for a long time to come. To further promote unfettered development of the productive forces, promote greater social fairness and justice, and attain the magnificent goals of building a moderately prosperous society in all respects and modernizing China, we must continue to unswervingly implement the reform and opening up policy. We will concentrate on the following areas this year.

We will advance the reform of SOEs and improve their ownership structure. We will continue to adjust state-owned assets and reorganize SOEs. We need to deepen the reform to convert SOEs into stockholding corporations. We will improve corporate governance, carry out policy-mandated closures and bankruptcies, separate SOEs' secondary businesses from their core businesses, and convert the former into independent companies. We will expand the experiment of setting up a budget system for managing state capital. We will deepen the reform of monopoly industries by introducing competition and strengthening government regulation and public oversight of them. We need to strictly standardize procedures for transforming SOEs into stock companies and for transferring ownership of state-owned assets to prevent their erosion. We will protect the legitimate rights and interests of workers. We will advance the reform of collectively owned enterprises and develop diverse forms of collective and cooperative economic operations. We will conscientiously implement the policies for encouraging, supporting and guiding the development of individual-proprietorship businesses and private companies in the nonpublic sector of the economy. In particular, we will help them solve problems related to market access and financial support.

We will deepen reform of the fiscal and taxation systems and accelerate improvement in the public finance system. We will reform the budget system and tighten budgetary management and oversight. We need to improve and standardize the system of transfer payments, raise the volume and proportion of general transfer payments and increase spending on public services. We will energetically push ahead with the reform of fiscal systems at and below the provincial level. The new Law on Corporate Income Tax will be comprehensively enforced. We will reform the system of resource taxes and fees, and improve the compensation systems for use of resources and for damage caused to the ecosystem. We will carry forward the trial VAT reform and formulate a plan to carry out the reform nationwide.

We will speed up reform of the financial system and strengthen financial oversight. We will continue deepening reform of the banking industry, focusing on the introduction of a shareholding system in the Agriculture Bank of China and the reform of the China Development Bank. A deposit insurance system will be set up. We will accelerate rural financial reform and strengthen the role of the Agriculture Bank of China, the Agricultural Development Bank of China and the China Postal Savings Bank in serving agriculture, rural areas and farmers. We will continue to deepen the reform of rural credit cooperatives and actively promote the development of new types of financial institutions in rural areas. We will improve the structure of the capital market, promote steady and sound development of the stock markets, strive to improve the performance of listed companies, and maintain an open, fair and equitable market environment. We will establish a market for growth enterprises, accelerate development of the bond market and steadily develop the futures market. We will deepen reform of the insurance industry, vigorously extend the scope of agricultural insurance, and successfully carry out trials of policy-supported agricultural insurance. We will take stern measures to combat violations of financial laws and regulations and guard against and defuse financial risks to maintain financial stability and security.

We will expand the breadth and depth of China's openness and make its economy more open. We will accelerate change in the pattern of foreign trade growth, improve the mix of exports, encourage the export of products with Chinese intellectual property rights and trademarks, and raise the quality, grade and added value of exports while maintaining steady export growth. We need to increase export of services and encourage foreign businesses to outsource services to China. We will energetically increase imports, with the focus on advanced technology and equipment, important raw materials, and key spare parts and components. We will improve the mix of industries using foreign investment and their geographic distribution, and steadily make service industries more open. We will limit or ban foreign investment in projects that are energy intensive or highly polluting, limit or ban foreign investment in some areas of resource exploitation, and correct illegal practices for attracting foreign investment. We will make innovations in the way we make investments and engage in cooperation overseas, and improve and implement policies and measures to support Chinese enterprises wishing to "go global." We will strengthen bilateral, multilateral and regional economic cooperation. We will continue to promote talks on free trade zones and honor the treaties we have signed. We are committed to an equitable international trade order.

In carrying out reform and opening up, we will accelerate the development of a modern market system, energetically develop modern logistics, intensify efforts to ensure orderly markets and promote the development of a credit system for individuals.

6. Paying closer attention to social development to ensure the wellbeing of the people and improve their lives.

We will continue to give priority to developing education.

First, we will make free compulsory education universally available in both urban and rural areas. We will continue increasing regular expenditures for rural compulsory education and raise the level of budgetary allocations. We will appropriately increase living allowances for poor rural students residing on campus. We will take steps to ensure that children from poor families and children of rural migrant workers in cities enjoy the same access to compulsory education as others. After running trials in selected areas, we will completely stop collecting tuition and miscellaneous fees from all urban students receiving compulsory education starting this fall. This is another major measure for promoting balanced development of compulsory education and equal access to education.

Second, we must vigorously develop vocational education. We will strengthen the basic conditions for vocational education and deepen reform of the systems for administering, running and investing in vocational education programs in order to turn out high-quality skilled personnel.

Third, we must raise the quality of higher education. We will improve the structure of academic disciplines and develop high-quality universities and key disciplines. Regular institutions of higher learning will continue to favor students in the central and western regions in expanding their enrollments. To successfully provide education of various kinds and at different levels, we must focus on the following three tasks. One, we must ensure that all students receive a well-rounded education, and promote educational reforms and innovations. We will deepen the reform of curricula, methods of instruction, the systems of examination and enrollment, and the system for evaluating educational quality, and lighten the study load of primary and secondary school students. Two, we must improve the quality of teachers, especially in rural areas, and improve and implement the system of wages, allowances and subsidies for teachers. Three, we must increase investment in education. This year, central government allocation for education will increase from last year's total of 107.6 billion yuan to 156.2 billion yuan, and local governments will also increase their spending. We will further standardize the collection of education-related fees. We will standardize nonpublic education programs and encourage their development. China cannot modernize if education is not made universally available and if its quality is not improved. We must ensure that our children receive a good education, provide education that satisfies the needs of the people and improve the overall quality of the population.

We will promote the reform and development of health care. Efforts will be focused on four areas:

First, we will accelerate the establishment of a system to ensure access to medical care for both urban and rural residents. We will expand the number of urban workers covered by basic medical insurance, and extend the trial of basic medical insurance for urban residents to over 50% of China's cities. We will fully implement the new type of rural cooperative medical care system in all rural areas. Within two years, we will raise the standard for financing from 50 yuan to 100 yuan per person per year, with central and local government contributions to be raised from 40 yuan to 80 yuan per person. We will improve the urban and rural assistance program for medical care.

Second, we will improve the public health service system. We will prevent and treat major diseases, implement policies and measures to increase the number of diseases covered in the state plan for immunization against communicable diseases, and provide free treatment for more people suffering from diseases such as AIDS, tuberculosis and schistosomiasis. We need to work harder to prevent and treat endemic, occupational and mental diseases. We must do a good job in work related to the health of women and children. We will implement a policy of granting allowances to rural women in the central and western regions giving birth in hospitals. We will improve the mechanism for ensuring adequate funding for public health services.

Third, we will continue development of the medical service systems for urban and rural areas. We will focus on improving the county, township, village three-tier rural health service network and the urban community-based medical and health service system. We will train more general practitioners, nurses and rural doctors and encourage high-caliber health workers to work in village and community clinics. Trial reform of public hospitals will be carried out. Measures will be formulated and implemented to support the development of traditional Chinese medicine and the folk medicines of ethnic minorities.

Fourth, we will set up a national system for basic drugs and a system for ensuring drug supply to ensure the quality and adequate supply of basic drugs and hold down prices. This year the central government will allocate 83.2 billion yuan to support the reform and development of health care, an increase of 16.7 billion yuan over last year, with the focus of spending on facilities at the urban community and village level.

Last year the State Council commissioned a study of the issue of how to deepen reform of the system of pharmaceuticals and health care. A preliminary plan has been produced and will soon be publicized to solicit opinions from the general public. The basic goal of the reform is to maintain the public service nature of public medical and health care services and set up a basic medical and health care system to provide people with basic medical and health care services that are safe, effective, convenient and affordable. We must resolutely carry out this reform to provide everyone with access to basic medical and health services and improve their health.

We will improve work related to population and family planning. We will adhere to the current policy of family planning, keep the birthrate low, improve the health of newborns and adopt a full range of measures to address the gender imbalance in babies. We will fully implement the special assistance system for families that comply with family planning regulations, extend the coverage of the reward system for rural families that comply with the regulations, implement the "lower birthrate equals faster prosperity" project in more areas, and raise the level of rewards and assistance. We will improve services for the floating population and tighten supervision of them to ensure that they comply with the family planning policy.

We will attach great importance to programs for the elderly, effectively protect the rights and interests of women and minors, and show concern for people with physical and mental disabilities and support programs benefiting them.

We will strive to expand employment. We will strictly enforce the Employment Promotion Law and the Labor Contract Law. We will continue to follow a vigorous employment policy, adhere to the principle of expanding employment by encouraging business startups, strengthen job training and training in how to start a business, encourage people to find jobs on their own or start their own businesses, and support the establishment of small enterprises. We will speed up development of a human resources market with uniform standards for both urban and rural areas, improve the public employment service system, and promote the creation of an employment system that treats urban and rural workers equally. We will strengthen job placement guidance and services for college graduates. We will deepen reform of the job-placement system for people leaving military service. We will improve the aid system for job seekers, carry out policies to find more jobs for people with physical and mental disabilities, and create a permanent mechanism to help zero-employment families find jobs. We will urge all types of enterprises to sign labor contracts with their employees in accordance with the law and abide by them. We will improve the handling of labor disputes and oversight for worker protection measures and severely punish illegal employment practices. Providing adequate employment opportunities in China, which has the largest population in the world, is a daunting challenge. We must redouble our efforts to increase employment, a matter that is crucial to people's well being.

We will increase urban and rural incomes. The key is to adjust the distribution of the national income, deepen reform of the income distribution system, gradually raise the proportion of the national income received by individuals and raise labor's of the primary distribution of income.

First, we will increase rural incomes through a variety of channels, ensure that rural migrant workers in cities get paid in full and on time, and appropriately increase allowances for the poor population.

Second, we will raise the wage scale for enterprise employees and create a mechanism to ensure they get regular wage increases and ensure that they are paid regularly. We will urge enterprises to establish a system for collective bargaining for wages, improve the system of wage guidelines, and improve and comply with the minimum wage system. We will reform the method of supervising SOE payroll and strengthen oversight of wages paid by enterprises in monopoly industries.

Third, we will raise the level of basic old-age benefits for retirees from enterprises every year for three years beginning Jan. 1 this year.

Fourth, we will deepen reform of the salary system for civil servants and continue efforts to standardize their subsidies and allowances. We will accelerate reform of the income distribution system in government-affiliated institutions. Fifth, we will institute a system of annual paid vacations for employees. In addition, we will further improve consumption policies, broaden the range of services available in the market, stabilize consumer expectations and increase immediate consumption. Only by appropriately spreading the fruits of economic development among the people can we win their support and maintain social harmony and stability.

We will improve the social safety net. We will follow a policy of expanding the number of people covered, guaranteeing people's basic needs and pursuing multi-level and sustainable development of the system.

First, we will expand the number of people covered by the social security system and improve collection of contributions to insurance funds. The focus of efforts will be on extending coverage to more rural migrant workers in cities, employees in the nonpublic sector of the economy and urban residents without fixed employment. Efforts will be made to provide basic medical insurance for retirees from closed or bankrupt enterprises and employees of enterprises with financial difficulties.

Second, we will push ahead with the reform of the social security system. We will improve the system of basic old-age insurance for enterprise employees, combining contributions from various sources in society with personal employee retirement accounts, and expand the trial of fully funding personal accounts for old-age insurance. In addition, we will accelerate the implementation of overall planning for old-age pensions at the provincial level and work out nationwide rules for transferring social security accounts from one region to another. We will standardize and expand enterprise retirement systems that pay annuities. We will explore ways to reform basic old-age insurance in government-affiliated institutions. We will soon work out an old-age insurance system suitable for rural migrant workers in cities, and encourage local governments to carry out experiments with a rural old-age insurance system. We will accelerate improvement in unemployment insurance, workers' compensation and maternity insurance.

Third, we will finance social security funds in various ways, strengthen their oversight, ensure their security and maintain and increase their value.

Fourth, we will improve the social assistance system. We will focus on improving the systems of basic cost of living allowances for both urban and rural residents and setting up a mechanism for adjusting the level of assistance in line with economic growth and price changes. We will improve the temporary assistance system, vigorously develop social welfare programs and encourage and support the development of charity programs. We will do a good job providing assistance to entitled groups and helping demobilized military personnel return to civilian life. We will improve the work of disaster prevention, reduction and relief. A total of 276.2 billion yuan will be appropriated this year in the central government budget to accelerate development of the social security system, 45.8 billion yuan more than last year. Establishing a sound social safety net for both urban and rural residents to ward off uncertainties for them has a direct impact on economic and social development and is a major task in the effort to build a moderately prosperous society in all respects.

We will promptly establish a system for ensuring housing for people. The general guiding principles for this work are as follows. 1) Taking into consideration the fact that China has a large population and relatively little land available for building housing, we need to foster a scientific and rational model for housing development and home ownership. We will vigorously work to build environmentally friendly buildings that conserve energy and land, increase the supply of small and medium-sized condominiums, and guide people to obtain housing they can afford. 2) We must ensure that the government and the market both play their due roles. The government's role is mainly to formulate plans and policies for housing and ensure that there is an appropriate supply of land, ensure that land is used intensively and oversee land use. Priority will be given to development of housing for low- and middle-income families. Demand for housing among high-income families will be met largely through the market. 3) We need to strengthen regulation and oversight of the real estate market, standardize and maintain order in the market and promote sustained, steady and healthy development of the real estate industry.

The following four measures will be adopted this year:

First, we will improve the system of low-rent housing, accelerate construction of low-rent housing, expand the supply of housing, and step up construction and tighten management of affordable housing to ease the housing difficulties of low-income urban residents. A total of 6.8 billion yuan will be allocated from the central government budget for the low-rent housing program this year, 1.7 billion yuan more than last year, and local governments will also increase funding in this area. In addition, we will work energetically to improve the living conditions of rural migrant workers in cities.

Second, we will increase the supply of low- and medium-price, small and medium-sized condominiums, establish a mechanism for making investments and raising funds in various ways, and help middle-income families meet their housing needs through a variety of channels. We will improve the supply structure of urban land to provide more land for building small and medium-sized condominiums.

Third, we will use a combination of tax, credit and land supply measures and improve the housing accumulation fund system to increase supply of reasonably priced housing, curb demand for high-end housing and prevent overheating in housing prices. Fourth, we will strengthen market oversight and strictly enforce the requirements for market access and the conditions for going out of business for real estate firms. We will investigate attempts to control the land and housing market through hoarding and speculation in land and housing and deal with violations in accordance with the law. In addition, we will improve planning and management of rural housing development and the safety of housing for the rural poor. We must unswervingly promote reform of the housing system and construction of housing for the benefit of the people.

7. Deepening the reform of the cultural management system and promoting the vigorous development and enrichment of culture.

We will further implement and improve the policies and measures to reform the cultural management system, promote cultural innovation, strengthen cultural improvement work, safeguard the basic cultural rights and interests of the people, and promote a flourishing cultural market to meet the people's ever-increasing and varied cultural needs. We will continue to educate the people in the latest advances in adapting Marxism to Chinese conditions, foster a common ideal of socialism with Chinese characteristics among the people, strongly promote a national spirit centered on patriotism and a spirit of the times centered on reform and innovation, and extensively promote education in the socialist concept of honor and disgrace. We will develop a culture of harmony, carry out the program for improving civic morality and foster civilized social conduct. Particular attention will be paid to cultivating ideals and ethics among young people. Extensive campaigns will be launched to encourage civilized behavior. We will maintain the orientation of serving the people and socialism and fully adhere to the principle of letting a hundred flowers blossom and a hundred schools of thought contend. We will develop philosophy and the social sciences. We will promote the vigorous development of the press and publishing, radio, film and television, literature and the arts. We will encourage the production of excellent cultural works. We will increase government funding to accelerate development of a system of public cultural services for the whole society and to promote development of basic public benefit cultural programs, particularly the building of more cultural facilities in urban communities and villages. We will accelerate development of multipurpose community centers in towns and townships. We will work on the projects to set up a national shared databank of cultural information and resources, extend radio and television coverage to all villages, and set up reading rooms and show movies in rural areas. All public museums, memorial halls and exhibition centers of a nonprofit nature will stop charging admission fees this year or next year. We will improve the policy for developing the culture sector and speed up development of bases for the culture industry and clusters of cultural industries with regional features. We will strengthen efforts to develop and manage Internet culture. We will ensure order in the cultural market and continue to combat pornography and illegal publications. We will strengthen protection of our national cultural heritage. We will expand cultural exchanges with other countries. We will step up development of public sports facilities in both urban and rural areas, launch extensive public fitness programs and raise the level of competitive sports.

The 2008 Olympics and Paralympics will be held in Beijing. All sons and daughters of the Chinese nation are looking forward to them, and they will be of great importance in promoting China's economic and social development and increasing friendship and cooperation between Chinese people and the peoples of other countries. We will prepare for and organize the Games well, strengthen cooperation with the international community, and create an excellent environment to ensure that the Games are a unique, well-run sporting event.

8. Stepping up development of socialist democracy and the socialist legal system and promoting social fairness and justice.

We will deepen reform of political institutions and advance socialist political standards. We will expand people's democracy, improve democratic institutions, diversify its forms and expand its channels, and we will carry out democratic elections, decision-making, administration and oversight in accordance with the law to ensure the people's rights to stay informed about, to participate in, to express views on, and to oversee government affairs. We will develop democracy at the community level, improve the system of governance by the people at the community level, expand the scope of their autonomy, strengthen urban and rural communities, and make the running of governments, villages and factories more transparent. We will bring into play the positive role of civic organizations in expanding public participation in government affairs and voicing the concerns of the people to improve the ability of society to govern itself.

We will fully adhere to the rule of law as a fundamental principle. We will step up the drafting of proposed legislation by the government and improve the quality of such legislation. The drafting of such legislation this year will focus on improving people's lives, promoting social development, conserving energy and resources, and protecting the ecosystem. In the course of doing so, we need to seek views from many sources. In principle, we will release drafts to the public to solicit their opinions when formulating all administrative rules and regulations that bear on the interests of the people. We will appropriately delineate and adjust the powers and duties of administrative law enforcement agencies, and strengthen oversight and fully implement the responsibility system for administrative law enforcement. We will improve the system of government administration in accordance with the law at the municipal and county levels. We will ensure that administrative charges are collected in a standardized way and reform and improve the mechanism for ensuring adequate funding for the judicial system and for law enforcement. We will improve the filing and inspection procedures for laws, rules, regulations and regulatory documents. Systems of administrative review and administrative compensation and reparation will be improved. We will ensure that people have adequate access to legal services and assistance. We will increase publicity and education concerning the law in order to create a good social environment in which the people conscientiously study, abide by and apply the law.

We will improve public administration. We will increase efforts to improve civic organizations and improve the system of public administration at the community level. We will do a good job handling complaints in the form of letters and visits from the public and improve the system for handling complaints. We will improve the mechanism for mediating social tensions and properly handle problems among the people to protect their legitimate rights and interests. We will improve the public security system for the prevention and control of crime, maintain law and order through a full range of measures and launch intensive campaigns to ensure public security. We will reform and intensify community policing in both urban and rural areas and improve services for and management of the floating population. Focusing on addressing serious public security issues and improving conditions in areas with poor public order, we will work to prevent crime and crack down on crime and illegal activities in accordance with the law to protect people's lives and property and ensure social stability. We will redouble our efforts to safeguard national security. We will strengthen efforts to ensure workplace safety. We will work harder to prevent serious and major accidents by addressing their root causes. We will consolidate and build upon progress in bringing coalmine gas buildup under control, improve coalmine safety and shut down coalmines that do not meet safety standards. We will continue to carry out campaigns to address safety problems in key industries and areas. We will work harder to identify and eliminate hidden perils, and improve the system for controlling major hazards and monitoring major sources of danger and the system for forecasting, giving early warning, preventing, responding to and mitigating disasters. We will tighten oversight for workplace safety in accordance with the law and rigorously investigate industrial accidents and prosecute those responsible for them.

9. Accelerating reform of the administrative system and intensifying government self-improvement.

Reform of the administrative system is an important link in deepening reform, an important part of the reform of political institutions, and an essential step in improving the socialist market economy. In reforming the administrative system, we should adhere to the following general principles and requirements: we must put people first and govern for the people. We should see to it that this reform proceeds in line with development of socialist democracy and the socialist market economy. Decisions must be made scientifically and democratically; the government must be run in accordance with the law, and administrative oversight needs to be strengthened. We need to make innovations in management and institutions and make full use of the initiative of both the central government and local governments. Efforts should be focused on changing functions, straightening out inter-departmental relationships, improving the structure and raising efficiency in order to develop an administrative system in which powers are commensurate with responsibilities, the division of work among departments is appropriate, decisions are scientific, enforcement is carried out smoothly and oversight is effective.

First, we must accelerate the transformation of government functions. This is central to deepening reform of the administrative system. We need to improve the division of responsibilities among government departments, ensure that all departments properly execute their functions and strive to build a service-oriented government. While improving regulation of the economy and the market, we must increase efforts to improve public administration and public services, safeguard social justice and order, and ensure equal access for all to basic public services. We will attach great importance to the role of civil organizations such as industrial associations and chambers of commerce in this area.

Second, we must deepen reform of government bodies. Our current plan for the reform of bodies of the State Council mainly centers on changing the way the government functions, appropriately dividing responsibilities among departments that exercise macroeconomic regulation, adjusting and improving bodies in charge of industrial management, and improving departments responsible for public administration and public services. The plan explores ways to establish larger departments that organically integrate the functions of smaller departments. To resolve the problem of overlapping responsibilities and of powers not being matched by responsibilities, the plan clearly defines the responsibilities and powers of each department, clarifies the relationship of responsibilities among departments, and improves the mechanism for interdepartmental coordination and cooperation. The plan will be submitted to you for deliberation and approval.

Third, we must improve the mechanism of administrative oversight. We need to use institutions to oversee the exercise of power, the handling of government affairs and the management of personnel. We will strengthen oversight of the exercise of administrative power and standardize procedures for administrative approval. We will strengthen the mutual oversight between higher- and lower-level authorities, get oversight bodies such as supervision and auditing departments to fully play their role, and conscientiously accept oversight by all sectors of society. We will adhere to the administrative accountability system and government performance management system. The competence of public servants will be strengthened. We will strictly enforce the law and the code of conduct for government employees and resolutely put a stop to non-compliance with government decrees and continued occurrences of banned practices. We will strive to make government affairs more open by enhancing the government information release system and improving the various types of administrative systems for transparency in government affairs to increase the transparency of government functions and create conditions to enable the people to oversee the government more effectively. Fourth, we will strengthen efforts to ensure clean government. We will attach even greater importance to combating corruption and encouraging integrity, and fight corruption unequivocally. We will effectively improve the system for preventing and punishing corruption in accordance with the principle of addressing both the symptoms and root causes of corruption and taking a dual approach that combines prevention and punishment, with the emphasis on prevention. In particular, we need to tackle the problems of excessive concentration of power and lack of checks on power. We will address fundamentals to improve regulations and institutions and standardize management of public resources such as transfer payments, development of land and mineral resources, government procurement and the transfer of state-owned assets. We will strengthen special campaigns to address people's pressing concerns related to problems concerning environmental protection, food and drug safety, workplace safety, land acquisition and expropriation, and housing demolition, to resolutely stop irregular practices that hurt public interests. We will strongly advocate hard work and plain living and firmly oppose extravagance and waste. We will prosecute all violations of the law and discipline, strictly curb bribery in business, resolutely bring corrupt people to justice and prosecute them to the full extent of the law.

Fellow Deputies,

China is a unified, multiethnic country. We must promote unity among all ethnic groups and make a concerted effort to achieve prosperity and development for all. We will follow and improve the system of regional ethnic autonomy, promote economic and social development of ethnic minorities and ethnic minority areas, and consolidate and develop socialist ethnic relations of equality, unity, mutual assistance and harmony. We will faithfully follow the Party's basic principles on work related to religions, adhere to the Regulations on Religious Affairs, and enable religious figures and religious believers to play a positive role in advancing economic and social development. We need to do a good job handling affairs related to overseas Chinese nationals in the new era and make full use of the role of overseas Chinese nationals, returned overseas Chinese nationals and their relatives in China's modernization and the great cause of peaceful reunification of the motherland.

Improving national defense and the military is a strategic task in developing socialism with Chinese characteristics. We must balance economic development and national defense development to make China prosperous and the armed forces strong as we carry out modernization. We must always follow the guidance of Mao Zedong's military thinking, Deng Xiaoping's thinking on building the army in the new period and Jiang Zemin's thinking on strengthening the national defense and the army, truly implement the important guidelines of Comrade Hu Jintao on national defense and the army under the new circumstances, and take the Scientific Outlook on Development as an important guiding principle for developing national defense and the army. Our aim is to enable the army to fully carry out its historic mission in the new stage in the new century, enhance its ability to respond to security threats and accomplish a diverse array of military tasks, staunchly protect China's sovereignty, security and territorial integrity, and provide strong support for building a moderately prosperous society in all respects. We will strengthen efforts to improve the People's Armed Police Force to improve its ability to enforce the law, respond to emergencies, combat terrorism and safeguard stability. We will intensify national defense education to raise public awareness of the importance of national defense. We will improve the national defense mobilization system. We will strengthen unity between the military and the government and between the military and the people.

We will continue to unswervingly adhere to the principle of "one country, two systems," under which Hong Kong people administer Hong Kong and Macao people administer Macao with a high degree of autonomy, and act in strict accordance with the basic laws of the two special administrative regions. We will give full support to the governments of the Hong Kong and Macao special administrative regions in administering their regions in accordance with the law, and increase exchange and cooperation between the mainland and the two special administrative regions in economic and trade affairs, environmental protection, science and technology, education, culture, health and sports. We firmly believe that our compatriots in Hong Kong and Macao will be able to do even better in administering and developing their respective regions.

We will adhere to the basic principle of "peaceful reunification and one country, two systems" and follow all policies for developing relations between the two sides of the Taiwan Straits and promoting China's peaceful reunification under the current circumstances. We will pursue the goal of promoting peaceful development of cross-Straits relations, encourage compatriots on both sides to increase contacts and common understanding, actively promote cross-Straits economic and cultural exchanges, and work for the resumption of direct links of mail, transport and trade. We will implement and improve the policies and measures designed to benefit our compatriots in Taiwan and support economic development on the west coast of the Straits in Fujian Province and in other areas where Taiwan investment is concentrated. We will work for the early resumption of cross-Straits negotiations on the basis of the one-China principle to address major issues of concern to compatriots on both sides. We firmly oppose Taiwan independence secessionist activities, and will never allow anyone to separate Taiwan from the motherland in any guise or by any means. Any issue that concerns China's sovereignty and territorial integrity must be decided by all the Chinese people, including our Taiwan compatriots. The attempts of Taiwan independence secessionist forces to deny the reality that the mainland and Taiwan belong to one and the same China and to undermine peace in the Taiwan Straits are doomed to fail. Reunification of the two sides is inevitable in the course of the great rejuvenation of the Chinese nation. With the concerted efforts of all Chinese people at home and overseas, the great cause of China's reunification will surely be achieved!

In the coming year, we must continue to hold high the banner of peace, development and cooperation, follow an independent foreign policy of peace and a path of peaceful development, and adhere to the win-win strategy of opening up to promote the building of a harmonious world with durable peace and common prosperity. We will work hard to develop relations with developed countries, deepen good-neighborly relations and friendship with all neighboring countries, and redouble efforts to increase unity and cooperation with other developing countries. We will actively participate in multilateral diplomacy, work to find appropriate solutions to major hotspots and global issues, and safeguard the legitimate rights and interests of Chinese nationals and companies overseas. The Chinese government and people are ready to share development opportunities with people of all other countries and to work with them to address risks and challenges and advance the noble cause of the peace and development of humanity.

Fellow Deputies,

Looking back, we are encouraged by the achievements of the past five years. Looking ahead, we see an exciting future for China. Our great motherland has embarked upon a new historical course and the future holds even brighter prospects. Under the leadership of the CPC Central Committee with Comrade Hu Jintao as General Secretary, let us hold high the great banner of socialism with Chinese characteristics, follow the guidance of Deng Xiaoping Theory and the important thought of Three Represents, and comprehensively apply the Scientific Outlook on Development. Let us free our minds, carry out reform and innovation, and work diligently for greater achievements in the building of a moderately prosperous society in all respects!

(Xinhua News Agency March 19, 2008)