2) We need to reduce the issuance of long-term treasury bonds and appropriately arrange investment allocations from the central government budget. We plan to issue 50 billion yuan worth of long-term treasury bonds in 2007, 10 billion less than last year, and allocate 80.4 billion yuan from the central government budget for regular development projects, 25 billion more than last year, together for total central government funds for development projects of 130.4 billion yuan. In accordance with the requirement to improve the structure of expenditures, focus on key areas, shore up weak links and concentrate resources on accomplishing major tasks, the central government will allocate more development funds to certain areas than it did last year. These include efforts to directly improve rural working and living conditions, support for social programs such as elementary education and public health, and promoting the large-scale development of the western region. In addition, support for energy conservation, environmental protection and independent innovation will also be increased.

3) We need to maintain a reasonable growth rate in the money supply and improve the structure of loan portfolios. The broad money supply (M2) is expected to grow by 16% in 2007. We will make comprehensive use of a variety of monetary and credit tools to continue to improve liquidity management in the banking sector, guide financial institutions in controlling the pace of credit growth and keep the amount of long- and medium-term loans at an appropriate level. Lending to enterprises that consume large quantities of energy or cause serious pollution and poorly performing enterprises in industries with excess production capacity will be strictly controlled. We will increase financial support for agriculture, rural areas and farmers, small and medium-sized enterprises, independent innovation, energy conservation, environmental protection, social programs and underdeveloped areas.

4) We need to maintain overall price stability. We will strengthen monitoring and analysis of the overall price level as well as trends in the prices of major goods and services such as grain, cotton, petroleum, coal, steel and commercial housing. We will do a good job spot-checking market prices.

We need to continue to improve regulation of fixed asset investment.

1) We need to continue to restrict the development of industries that consume large amounts of energy and resources, seriously pollute the environment or have excess production capacity by maintaining strict control over availability of land and credit and market access. We need to appropriately raise and strictly enforce standards for approval of development projects in terms of land, environmental protection, energy conservation, technology and safety in accordance with the situation in each industry. We will build on our achievements in reviewing newly launched projects and rigorously control market access for new projects, paying particular attention to controlling the scale of urban development. We will strictly control building and expansion of office buildings of administrative organs and prohibit construction of luxurious office buildings and halls. We need to set up a mechanism to coordinate the actions of government departments in approving and managing new projects and work out a system for announcing and disseminating information on new projects.

2) We need to increase efforts to implement projects of major overall importance for long-term economic and social development and give more support to weak links in the economy such as agriculture, the service sector, social programs, energy conservation, environmental protection, independent innovation and underdeveloped areas. We will employ economic means such as subsidies, discount interest, tax and pricing to give full play to the role of government funding in properly guiding non-government investment.