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温家宝: Fellow Deputies,
This government has now been in office for a year. I now submit a report on its work on behalf of the State Council for your examination and approval and also for comments from members of the National Committee of the Chinese People's Political Consultative Conference.
一、一年来工作回顾 Review of the Past Year's Work
Last year was a significant and unusual year in the course of China's development. It was a year in which we made remarkable achievements in reform and opening up and in the modernization drive. In the face of a complex and volatile international situation, the unexpected outbreak of the severe acute respiratory syndrome (SARS) and frequent natural disasters, governments at all levels and the people of all our ethnic groups put into practice the guiding principles of the Sixteenth National Congress of the Communist Party of China (CPC) under the leadership of the CPC and the guidance of Deng Xiaoping Theory and the important thought of Three Represents. We braved difficulties and hardships in an indomitable and innovative spirit and made important advances in building a moderately prosperous society in all respects.
We won a great victory in the fight against SARS. The economy grew rapidly. China's GDP increased by 9.1% over the previous year and reached 11.67 trillion yuan. Per capita GDP passed the important benchmark of US$ 1,000, calculated at the current exchange rate. China's financial strength grew noticeably. Total government revenue was 2.17 trillion yuan, 278.7 billion yuan more than the previous year. Foreign trade expanded significantly. Total import and export volume was $851.2 billion, 37.1% more than the previous year, raising China from fifth to fourth place in the world.
We created more jobs than planned 8.59 million urban residents became employed and 4.4 million laid-off workers, reemployed. People's incomes increased. Urban per capita disposable income grew by 9% in real terms, and rural per capita net income rose by 4.3% in real terms. China's first manned spaceflight was a complete success. These achievements indicate that China's overall national strength has reached new heights. They have boosted the confidence and courage of all our people to continue forging ahead.
The work we did over the past year was mainly in the following six areas.
1. Taking resolute measures against SARS and concentrating our resources on the campaign against it.
China suffered from a disastrous SARS outbreak last spring. The Party Central Committee and the State Council gave top priority to protecting people's health and lives and promptly investigated SARS and took steps to prevent and treat it. We enforced the Law of the People's Republic of China on the Prevention and Treatment of Communicable Diseases, formulated the Regulations on Public Health Emergency Response, and classified SARS as a communicable disease. We reported the facts of the SARS situation exactly as they were and mobilized the general public throughout the country to control the outbreak.
The State Council and local governments established anti-SARS headquarters to coordinate human, material and financial resources and to make full use of primary-level organizations in both urban and rural areas, so as to ensure that prevention and treatment work was done quickly and orderly. We organized research on and made significant progress in diagnosing, treating and preventing SARS. We took such measures as providing free treatment for SARS patients among rural workers in urban areas to prevent the spread of SARS to rural areas.
During the difficult days of our anti-SARS campaign, leading cadres at all levels took to the frontlines, the people throughout the country united as one, all sectors of society pulled together, large numbers of medical workers faced danger fearlessly, and the Chinese nation withstood a severe test.
2.Exercising timely and appropriate control to promote stable and rapid economic development
We adhered to the policy of expanding domestic demand and continued to implement a proactive fiscal policy and a prudent monetary policy. We took measures to exercise macro-control over new developments as soon as they arose in the course of economic operation.
When the SARS outbreak hit, we worked unflaggingly to prevent and control it, while at the same time unswervingly promoting economic development. We concentrated on strengthening key areas, stimulating industrial production and ensuring unimpeded flow of goods and materials. In addition, we promptly adopted such supportive policies as reducing or exempting taxes and administrative charges on industries that were worst hit by SARS and granting soft loans to them. We also enacted measures for increasing employment and rural incomes. All this helped minimize the impact of the SARS outbreak on economic development
We provided guidance and control for investment, mainly through a combination of economic and legal means. We further rectified and standardized the order of the land market and screened development zones of all types to stop disorderly and unauthorized acquisition of farmland. We increased the deposit-reserve ratio for financial institutions to an appropriate level to bring the excessively rapid growth of credit under control. In exercising control, we did an appropriate amount of fine-tuning and dealt with problems individually.
We expanded support for agriculture, rural areas and farmers and made plans in a timely fashion to ensure the continued enthusiasm of major grain producing areas and grain producers. We strengthened coordination of economic operation and took measures to increase supply and rationally guide the growth of demand, thus alleviating transport difficulties and shortages of coal, electricity, petroleum and important raw and processed materials.
We stepped up the strategic restructuring of the economy and put greater efforts into a number of key projects vital to economic growth and economic restructuring. In particular, we sped up the launching and construction of water control, energy and transport projects. The second phase of the key water control project at the Three Gorges on the Yangtze River was completed successfully and work on the third phase began.
The eastern section of the pipeline for transmitting natural gas from the west to the east was completed. Laying of track proceeded smoothly on the Qinghai-Tibet Railway trunk line. Transmission of electricity from the west to the east was increased. Construction of the eastern and central routes of the south-to-north water diversion project began. Large-scale development of the western region continued. Implementation of the strategy to revitalize northeast China and other old industrial bases was begun.
3. Accelerating the development of social undertakings on the basis of an overall consideration of all issues
The spread of SARS exposed problems arising from disparities between economic and social development. We promptly made necessary adjustments to the government's priorities and investment to stimulate the development of social undertakings. The central government spent 85.5 billion yuan in 2003 on education, health, science and technology, culture and sports, 12. 4% more than the previous year. Treasury bonds worth 16.3 billion yuan were issued to support the development of social undertakings, an increase of nearly 200%.
We improved the national public health system, focusing on epidemic prevention and control and on rural areas. The National Plan for Developing an Information System for Public Health Monitoring and the National Plan for Developing a System for Medical Rescue and Treatment in Public Health Emergencies were formulated and implemented. A system was set up for early warning and response for public health emergencies.
Public health infrastructure was improved, with the focus on networks spanning provincial, city (prefecture) and county levels for disease prevention and control. The central government worked with local governments to build more rural health and medical institutions. Pilot projects for a new cooperative medical care system and medical assistance system were initiated in rural areas.
The State Council issued the Decision on Further Strengthening Rural Education. Increased financial support was extended to rural education from the central budget and treasury bonds. Priority was given to subsidizing rural teachers' salaries in the central and western regions, renovating dangerous primary and secondary school buildings, carrying out pilot projects in modern distance education and aiding needy students. Many cities began to make schooling available for the children of migrant rural workers, and the governments of those cities took over primary administrative responsibility.
Great progress was made last year in basic research, strategically important hi-tech research, and industrial application of new and high technologies. The State Council began formulating a national medium- to long-range program for scientific and technological development. It organized many experts to participate in feasibility studies and a number of important research results have already been obtained.
Reform of the cultural system and the development of cultural undertakings were vigorously promoted. Efforts were intensified to rectify the cultural products and services market. Fresh achievements were made in amateur and competitive sports.
Population and family planning work was further strengthened. Fresh progress was made in the areas of land and resources administration, environmental protection, forestry development and ecological improvement.
4. Caring for people's well-being, creating more jobs and administering social security work well
We consider it highly important to protect the vital interests of the people and help them, especially the needy, in solving problems in their work and daily lives. Governments at all levels conscientiously implemented a series of measures drawn up by the Party Central Committee and the State Council for increasing employment and reemployment and increased their efforts, capital spending and policy support in this regard.
The central government allocated an additional 4.7 billion yuan of subsidies for job creation. We increased our employment guidance and services for last year's college graduates, who were the first to be enrolled under the college expansion plan of 1999. By the end of last year, 83% of last year's graduates from regular institutions of higher learning had found jobs, 600,000 more than the previous year.
To continue ensuring the "two guarantees" (guaranteeing that the living allowances for workers laid off from state-owned enterprises and that the pensions of retirees are paid on time and in full) and the "three-stage guarantee" for laid-off workers, the central government spent 70 billion yuan in 2003, 19.9% more than the previous year; of this sum, subsidies for subsistence allowances for the urban poor increased from 4.6 billion yuan in 2002 to 9.2 billion yuan in 2003.
This allowed 22.35 million urban residents throughout the country to receive such benefits. In 2003, the central government began making annual allocations of special funds to help local governments assist ex-servicemen who are working in enterprises to solve their financial difficulties. Benefits were again raised for disabled revolutionary servicemen and other people who are entitled to special care by the government.
We further intensified efforts to alleviate rural poverty through development and we invested more to improve working and living conditions in underdeveloped areas. We made all-out efforts to fight disasters and ensure adequate disaster relief. Central budget funds totaling 8.03 billion yuan were spent on relief for people affected by floods, droughts, earthquakes or other disasters, up 63.9% over the previous year, and 2.79 billion yuan was invested in post-disaster reconstruction.
As a result, proper living arrangements were made for people in disaster-afflicted areas, production resumed and reconstruction proceeded in an orderly way. Governments at all levels took the problem of wage arrears for migrant rural workers very seriously, worked harder to resolve it and achieved initial results.
5. Pressing forward with institutional innovation and making significant progress in reform and opening up
Institutional restructuring of the State Council was accomplished smoothly on the basis of the plan approved at the First Session of the Tenth National People's Congress and the adjusted and newly set up bodies are now operating normally. Significant progress was made in establishing a macro-control mechanism, restructuring the management of state assets and establishing a mechanism for oversight and management of the banking sector.
We unified the mechanisms for administering domestic and foreign trade and improved monitoring systems for food and workplace safety. Institutional restructuring of provincial governments has been basically completed. The reform of the administrative examination and approval system was deepened.
Fresh progress was made in transforming state-owned enterprises into stock companies. Reforms of the electricity, telecommunications and civil aviation industries were accelerated. The economic returns of state-owned industrial enterprises and enterprises whose controlling stake was owned by the state increased substantially; they generated a total of 378.4 billion yuan in profits, 45.2% more than the previous year.
The reforms of the banking, securities and insurance industries progressed steadily. We formulated and implemented a pilot plan to transform state-owned commercial banks into stock entities. The system for examining and verifying the issuance of securities was reformed. Remarkable progress was made in transforming state-owned insurance companies into stock companies. After several years of deliberation, we began a pilot project for reforming rural credit cooperatives in eight provinces and municipalities directly under the central government.
The experimental reform of rural taxes and administrative charges was extended to cover the whole country. Policies and measures for promoting the development of the non- public sectors of the economy were further implemented. We deepened the rectification and standardization of the market order and cracked down on manufacturing and marketing of counterfeit and substandard goods, smuggling and other illegal and criminal activities. This improved the market climate and helped protect the legitimate rights and interests of both consumers and producers.
We worked conscientiously to fulfill the commitments we made for accession to the World Trade Organization (WTO). We continued to lower tariff rates and opened the service sector wider to the outside world.
We further relaxed control over who could engage in foreign trade. We formulated and put into effect a plan for reforming the mechanism for export tax rebates; this will gradually bring about a rational settlement of the longstanding problem of overdue export tax rebates.
We intensified our work dealing with anti-dumping investigations made against China and settling trade disputes. The import and export mix was further improved. China utilized $53.5 billion in foreign direct investment in 2003. State foreign exchange reserves reached $403.3 billion at the end of the year, $116.8 billion more than at the beginning.
The exchange rate for the Renminbi remained stable. Last year, we signed the Closer Economic Partnership Arrangement with both Hong Kong and Macao, thereby strengthening economic ties between the mainland and the two regions.
6. Improving the legal system and maintaining social stability
We put great effort into improving government legislation. The State Council submitted five bills in 2003, including a draft law on oversight and management of the banking sector and a draft amendment to the Foreign Trade Law, and enacted 28 administrative regulations, including the Provisional Regulations Concerning the Oversight and Management of State-owned Assets in Enterprises.
To solve problems in our handling of indigent migrants, we formulated and implemented the Measures for Assisting Vagrants and Beggars with No Means of Support in Cities together with supporting measures. The implementation of the Legal Assistance Regulations helped solve the difficulties people in financial straits faced in filing lawsuits.
We increased our efforts to maintain law and order by taking comprehensive measures, focusing on high-crime areas. We further improved public order by cracking down more severely on violent and other serious crimes. We steadfastly enforced laws in the interests of the people and maintained strict police discipline, and we concentrated on the problems of detention beyond the legally prescribed time limits and illegal use of coercive measures to protect the lawful rights and interests of citizens. We improved the overall quality of procurators and judicial and public security officers and made full use of the important role of public security organs and armed police units in safeguarding social stability.
In accordance with the Party Central Committee's instructions, governments at all levels last year encouraged a groundswell of study and practice of the important thought of Three Represents and the guiding principles of the Sixteenth National Congress of the CPC. Socialist political civilization and spiritual civilization were strengthened. New achievements were made in building a clean government and fighting corruption and in our work concerning ethnic, religious and overseas Chinese affairs. New steps were taken to modernize national defense and the armed forces. Our diplomatic work entered a new phase.
None of these notable achievements of the past year came easily. We attribute them to the Party Central Committee's broad vision and correct leadership and to the concerted efforts of the people of all ethnic groups. On behalf of the State Council, I would like to express our sincere gratitude to all our workers, farmers, intellectuals and cadres; to all those who work for the cause of socialism; and to the members of the People's Liberation Army, the armed police and the public security police. I would like to extend our heartfelt thanks to the people of all ethnic groups, to all democratic parties and mass organizations and to people from all walks of life for their trust in and support for the work of the government. I would also like to express our sincere thanks to all our compatriots in the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan as well as overseas Chinese who care about and support the development and reunification of our motherland, and to all our friends in other countries who care about and support China's modernization drive.
In reviewing our work of the past year, we are clearly aware that many difficulties and problems remain on our way ahead, that there are still quite a few shortcomings in the government's work, that there remain areas our people are not satisfied with, and that it will take a long time to fundamentally eradicate longstanding and deep-seated problems. Rural incomes have grown too slowly; the task of increasing employment and improving social security is arduous; development in different regions of the country is not balanced; the income gap is too wide among some members of society; and pressure on resources and the environment is mounting.
As economic growth has accelerated, a number of new problems have emerged. These include, among others, the excessively broad scale of investment, the serious problem of haphazard investment and low-level, redundant construction in some industries and regions, the strain between supply and demand in energy, transport and some raw and processed materials, the marked decrease in grain production, and the widespread illegal appropriation of farmland. The development of social undertakings lags behind, and people have strong complaints about the cost and availability of schooling and medical treatment.
Many low-income residents in both town and country lead relatively difficult lives. Serious crimes have occurred in some places. Frequent serious accidents that inflict heavy loss of life and property have taught us a sobering lesson. We are also clearly aware that some government officials have a subjective, formalistic and bureaucratic style of work, and they are wasteful, extravagant and fraudulent, and sometimes even corrupt. It will be an arduous task for the government to rectify itself and fight corruption.
We must not evade these difficulties and problems but instead face them squarely; we must work hard to resolve them and not let them grow. The government will shoulder heavy responsibilities for years to come. We must remain sober-minded, become more aware of potential problems and enhance our sense of historical responsibility. We must make up our minds to forge ahead in spite of difficulties and to work in a pioneering and creative spirit and in a down-to-earth manner. We must take on new tests with a fresh mental outlook and a new style of work, and we absolutely must not fail to live up to the expectations of the people.
II. Principal Domestic Tasks for 2004
The year 2004 is a crucial year for China's reform and development. The main ideas and principal tasks for the work of the government are: to take Deng Xiaoping Theory and the important thought of Three Represents as our guide; to comprehensively put into practice the guidelines of the Party's Sixteenth National Congress and the Third Plenary Session of its Sixteenth Central Committee; to make the most of the present important strategic opportunities while they last; to make development our top priority and adhere to the scientific viewpoint of development; to pay more attention to exercising macro-control, balancing the interests of all parties, putting people first, and promoting reform and innovation in accordance with the "five balanced aspects" (balancing urban and rural development, balancing development among regions, balancing economic and social development, balancing development of man and nature, and balancing domestic development and opening wider to the outside world); to concentrate on resolving prominent conflicts in economic and social development and acute problems concerning the vital interests of the people and properly balancing reform, development and stability; to promote all-round, balanced and sustainable development of the economy and society; and to coordinate the progress of socialist material, political and spiritual civilizations.
1. Strengthening and improving macro-control and maintaining stable and rapid economic growth
The basic focus of this year's economic work is to safeguard, guide and utilize the enthusiasm of all sides for accelerating development in order to achieve stable and rapid economic growth without drastic fluctuations. In setting a target for this year's economic growth of around 7%, the central government has taken into consideration both the need for continuity in macro-control and the relationship between the pace of economic growth and the conditions for its attainment, including supply and demand in energy, important raw and processed materials, and transport capacity, also taking into account the need to alleviate the pressure on resources and the environment.
This target also encourages all sides to focus on deepening reform, adjusting the economic structure and improving the quality and efficiency of economic growth and to devote more financial and material resources to promoting social development and strengthening weak links.
To ensure effective macro-control, we need to maintain consistency and stability in our macroeconomic policies while adjusting the intensity and focus of policy implementation at the proper time and to an appropriate degree in response to developments and changes in the economic situation. By "at the proper time," we mean seizing the opportune moment for introducing control measures by observing small clues that may indicate what is coming in order to forestall any possible trouble. By "to an appropriate degree," we mean that macro-control should neither be too loose nor too tight and that we must not apply the brakes too hard or apply control measures too rigidly.
We must adhere to the policy of expanding domestic demand and continue to implement a proactive fiscal policy and a prudent monetary policy. The issuance of construction treasury bonds is an interim policy adopted during a period of insufficient demand. Their scale should be reduced gradually as the increase in nongovernmental investment accelerates.
We plan to issue 110 billion yuan in construction treasury bonds this year, 30 billion yuan less than last year. As the issuance of treasury bonds is to be reduced year by year, it will be necessary to appropriately increase the investment from the central budget for regular construction annually in order to develop a regular government investment mechanism and stabilize the sources of funding. To begin with, we plan an increase of 5 billion yuan this year.
The general idea is to appropriately increase investment from the central budget for regular construction each year for several years while systematically decreasing the issuance of treasury bonds, and at the same time ensuring that the size of the deficit remains at the current level. We will adjust the way funds from construction treasury bonds are used, concentrating them on promoting economic restructuring and ensuring all-round social development. This year, funds from the sale of treasury bonds will be directed toward rural areas, social undertakings, the western region, northeast China and other old industrial bases, ecological improvement, environmental protection, and ongoing bond-financed projects.
We need to manage and use treasury bonds well and ensure the quality of the projects they finance and the efficient use of investment capital. We must continue to do our fiscal and taxation work well by working hard to increase revenue and reduce expenditure, collecting taxes in strict accordance with the law and guaranteeing funding for key items. We should make full use of the role of monetary policy, appropriately control the size of credit and optimize the credit structure to support economic growth while fending off inflation and financial risks. We will work to basically balance international payments and keep the exchange rate for the Renminbi basically stable at a proper and balanced level.
One important task for macro-control this year is to appropriately control the scale of investment in fixed assets and firmly halt haphazard investment and low-level, redundant construction in some industries and regions. Guided by market forces, we will use a comprehensive range of measures, mainly economic and legal means supplemented by any necessary administrative measures, to strengthen guidance and control. First, industrial policies and planning should be improved and the information release system for industries should be improved to correctly guide nongovernmental investment.
Second, we must quickly formulate and revise standards for admittance into industries and enforce market admittance strictly. Projects that do not meet standards for environmental protection, safety, energy consumption, level of technology or quality and have not yet been started should be blocked and those already under construction should resolve such problems, while those already completed should be upgraded within a specified time.
Third, land-use management must be improved in accordance with the law. No land should be approved for projects that fail to meet the requirements of the state's industrial policies and standards for admittance into industries. We should continue clearing up problems relating to development zones and rectifying and standardizing the land market.
Fourth, auditing and oversight of credit transactions must be strengthened. Financial institutions should not make any loans to new projects or rebuilding and expansion projects that do not meet the requirements for market access.
Fifth, the taxation system must be tightened and the practice of introducing unauthorized tax privileges must be stopped and rectified.
On the basis of these measures we will strive to optimize the investment structure, keep the overall investment volume at a reasonable level and improve returns on investment. In order to take a new road to industrialization, we must base the national economy and society on IT and upgrade the industrial structure.
We will energetically promote the development of new and high technology industries capable of spurring economic growth and with proprietary intellectual property rights. We will accelerate the revival of the equipment manufacturing industry. We will energetically develop modern distribution, tourism, intermediary services and other aspects of tertiary industry, and gradually raise their proportion in the national economy.
To ensure stable and rapid economic development, we must alleviate the current disparities between supply and demand in energy, important raw and processed materials and transport capacity. On the one hand, we must increase the production of coal, electricity and processed oil while at the same time strengthen the regulation of economic activity to balance supply and demand in coal, electricity, oil, transport capacity and important raw and processed materials while meeting the needs of the people, important industries and key enterprises. We must speed up the development of large coal mines, important power generating facilities and power grids, the exploration and exploitation of petroleum and other important resources, and the construction of major transport trunk lines and hubs.
On the other hand, we must increase production and practice economy, with the emphasis on economizing. This is not only urgently needed to alleviate the current disparities between supply and demand, but is also a long- term strategy to alleviate the pressure on resources and the environment. The way the economy grows must change, and all industries must eliminate waste, reduce consumption of energy and raw and processed materials, and use resources more efficiently, to develop production and consumption patterns that conserve resources and build a conservation-minded society.
Balancing investment and consumption is an important aspect of this year's work for macro-control. Consumption occupies too small a proportion of China's GDP. This is not conducive to ensuring a stable increase in domestic demand, sustaining rapid economic growth and establishing a beneficial economic cycle. We must work hard to increase the incomes of both urban and rural residents and raise their purchasing power. Regulation of income distribution will be intensified to enable low- and middle-income people to consume more.
Consumption on credit must be expanded, consumption policies must be optimized and the consumption climate must be improved. To adapt to changes in consumption patterns, we need to expand the consumption of services and improve the production and supply structure. The reform measures we take should enhance consumer confidence, so as to create positive consumer expectations and increase immediate consumption. We should gradually reduce the rate of investment in relation to the rate of consumption.
2. Consolidating and strengthening the position of agriculture as the foundation of the national economy and increasing rural incomes and agricultural production
Solving problems facing agriculture, rural areas and farmers is a top priority in all our work. Once again, China's agriculture is in a crucial period of its development. This year we must take more direct and effective policies and measures to strengthen, support and protect agriculture and increase rural incomes in line with the need to balance urban and rural development.
First, the overall grain production capability must be maintained and increased. The strictest possible system for protecting farmland will be implemented and control over the use of farmland will be strengthened in accordance with the law. We will resolutely put an end to illegal acquisition and use of farmland and rectify unauthorized changes in the use of primary farmland.
Reform of the system for land expropriation and requisition will be accelerated, and the expropriation and requisition procedures and mechanisms for compensation will be improved to ensure that the compensation for expropriated or requisitioned land is appropriate. The acreage sown in grain crops will be expanded, and the yield per unit area increased. Support will be focused on increasing production in major grain producing areas. Projects to industrialize production of high-quality grains will be undertaken. We will make primary farmland capable of producing stable, high yields.
Second, we will promote strategic restructuring of agriculture and the rural economy. Great efforts will be made to develop high- quality, high-yield, cost-effective, eco-friendly and safe agriculture, to improve the quality of agricultural products and enhance their competitiveness. We will carry forward the development of industrial belts for producing competitive agricultural products and promote the industrialization of agriculture.
We will energetically develop animal husbandry and prevent and control the spread of the highly pathogenic bird flu and other animal epidemics. We will encourage the development of industries that process agricultural products and other non- agricultural industries in rural areas and expand intra-county economies. We will steadily carry out the process of urbanization. We will improve the employment environment for rural workers in cities, provide them with more and better training and create more jobs for them in various ways.
Third, we will press ahead with the reform of rural taxes and administrative charges. All taxes on special agricultural products will be repealed except for tobacco, thus reducing the financial burden on farmers by 4.8 billion yuan annually. Beginning this year, the agricultural tax rate will be reduced by more than 1 percentage point per year on average, and agricultural taxes will be rescinded in five years.
The agricultural tax burden on farmers will be reduced by 7 billion yuan this year. The central government will appropriate 39.6 billion yuan this year from its budget for transfer payments to support the reform of rural taxes and administrative charges. We will accelerate reforms of county and township government institutions.
Fourth, we will deepen the reform of the grain distribution system. All controls over grain purchase and sales markets will be lifted. The reform of state-owned grain enterprises will be accelerated. Control and regulation of grain markets will be strengthened, and subsidies will be given directly to grain producers.
The state will appropriate 10 billion yuan this year from its grain risk fund to directly subsidize these producers in order to stimulate their enthusiasm for grain production. The prices of the means of agricultural production will be better monitored and controlled to protect farmers' interests.
Fifth, we will increase investment in agriculture and rural areas. Governments at all levels must invest more in agriculture, rural areas and farmers. This year, the central government will appropriate over 30 billion yuan for this purpose, at least 20% more than last year. Treasury bond funds should be invested mainly in the construction of six categories of small projects for rural areas (water-efficient irrigation, potable water supplies, roads, methane production facilities, hydroelectric plants and pasture enclosure) and in construction of water control projects, in order to improve the living and production conditions of farmers.
We will continue to aid the rural poor through development by increasing funding for poverty alleviation in various ways and giving people work in place of relief subsidies. Rural financial services will be improved. To assist rural residents expand production, rural credit cooperatives will extend more micro- credit loans to individual families and groups in rural areas.
Sixth, progress in agro-science will be accelerated. We will tackle agro-science problems with greater intensity and increase our ability to make advances in agro-science and hold them in reserve and find applications for them. We will strengthen the system for spreading the application of science and technology in rural areas. We will energetically promote wider application of advanced applied technology that can help increase production and improve productivity. We will expand both the size and scope of subsidies for developing seeds of high-quality crop varieties.
3. Coordinating economic development in different regions and promoting the development of the western region and the revitalization of northeast China and other old industrial bases
Promoting the coordinated development of all regions is of strategic importance to China's modernization drive. We need to steadfastly push forward with the development of the western region, revitalize northeast China and other old industrial bases, promote the development of the central region and encourage faster development in the eastern region so that the eastern, central and western regions can better interact, complement and support each other, and develop together.
We will continue to implement the strategy of developing the western region. On the basis of a conscientious review of our experience, we will improve our policies and carry out relevant measures to ensure positive and orderly progress. We will work in a down-to-earth manner to ensure successful implementation of such key ecological conservation projects as returning farmland to forests and animal breeding grounds to pastures, protecting natural forests, bringing sources of sandstorms under effective control and preventing karst areas from becoming stony deserts.
We will strengthen infrastructure development efforts, emphasizing major projects of key importance to the overall economy to increase the potential for economic development. At the same time, we will continue to pay adequate attention to the construction of smaller projects that will improve the living and production conditions of farmers and herdsmen.
Social undertakings will be promoted, with priority given to compulsory education, public health and primary-level cultural undertakings. We will encourage the development of economies with local characteristics and competitive industries and promote the development of key regions.
We will conscientiously implement the strategy for revitalizing northeast China and other old industrial bases, working to get off to a good start this year. We must carry out all the policies and measures of the central authorities, emphasizing innovation in institutions and mechanisms and opening wider both domestically and internationally.
We need to accelerate economic restructuring and technological progress, especially for key industries and enterprises, transform the resource-based economies of certain cities, and solve the problem of sinking land and cave-ins above exhausted mines in coalmining areas. We must uphold the principles of self-reliance and hard work and let cadres and the general public give full expression to their initiative and creativeness.
Accelerating the development of the central region is an important aspect of our endeavor to ensure well-balanced development of regional economies. The state is encouraging the central region to exploit its geographical and economic advantages to quicken the pace of its reform, opening up and development, modernize its agriculture, and build key areas for commercial grain production, strengthen its infrastructure development, expand its competitive manufacturing and new and high technology industries, and raise its levels of industrialization and urbanization.
Accelerating development of the eastern region will strengthen the country financially, materially, scientifically and technologically, thereby providing more support for the development of the central and western regions. The eastern region should continue making the most of its advantages, speed up efforts to upgrade its industrial structure and make its economy more oriented to the global market; areas where conditions are most favorable should take the lead in becoming basically modern.
The eastern, central and western regions should increase cooperation in various ways and gradually achieve common prosperity through balanced development. The government will continue to take measures to help old revolutionary base areas develop more quickly.
4.Continuing to implement the strategy of invigorating China through science and education and staying on the road of sustainable development
In the course of development, we will steadfastly give priority to education and devote more energy and financial resources to accelerating its development. We will adopt a fresh round of measures to implement the Action Plan for Reinvigorating Education, with the focus on compulsory education, particularly in rural areas.
This year we will begin to implement the plan to make nine- year compulsory education basically available throughout the western region and basically eliminate illiteracy among the adults there by 2007. The central government will spend 10 billion yuan on this work. The system for managing compulsory education in rural areas must be improved by shifting the main responsibility to county governments and increasing transfer payments from central, provincial and city (prefectural) governments for compulsory education in poverty-stricken counties.
The central government will contribute 6 billion yuan to carrying out the second phase of the plan for renovating dangerous primary and secondary school buildings in rural areas. Both central and local governments will increase their investment to develop modern distance education in rural primary and secondary schools. We will work to optimize the education structure, take energetic and steady steps to develop higher education, and put more effort into developing vocational education and continuing education.
Schools of all kinds and at all levels should fully implement the Party's education policy, emphasize competence-oriented education, deepen the reform of education and improve its quality. We will standardize and develop non-government funded education. Unauthorized collection of fees by educational institutions must be resolutely stopped to reduce the financial burden on students' families.
This year, we will continue to concentrate on formulating a medium- and long-range state plan for developing science and technology in order to define the strategy, objectives, tasks and policies in this field for the coming 15 years.
Institutional reform and innovation in the field of science and technology should be continued. We will accelerate the establishment of a national innovation system and construction of the science and technology infrastructure, and effectively strengthen basic research.
We will carry out a number of projects of major importance for overall economic and social development, promote the integration of science and technology with industry and encourage the application of new and high technologies in industrial production. We consider social and natural sciences equally important and will make full use of the important role of philosophy and social sciences in economic and social development.
We should conscientiously implement the strategy of reinvigorating China through human resource development. Training, recruiting and properly using talented people in all fields should provide substantial personnel and intellectual support for the modernization drive.
We will vigorously implement the strategy of sustainable development and successfully carry out all work related to population, natural resources and the environment in line with the need to balance development of man and nature. We will keep the birthrate low and improve the health of newborns. We will improve the infrastructure and service system for family planning at the primary level and strengthen the management of family planning among the floating population.
Work related to senior citizens should be carefully conducted. We will implement the national plans for ecological and environmental protection and conservation conscientiously and implement a strategy for developing forestry focused on ecological conservation. We will intensify law enforcement to strengthen ecological and environmental control and monitoring. We will strictly control the discharge of major pollutants and work hard to eliminate environmental pollution that seriously threatens people's health and safety.
We will energetically promote the recycling industry and clean production. We will protect our land and resources in accordance with the law and utilize them rationally. We will pay close attention to the development and protection of marine resources. We will better conserve our water resources and use them more economically. We will do a good job of disaster prevention and reduction.
5.Accelerating the development of health, culture and sports and promoting spiritual civilization
We have three priorities in the area of health this year. The first is to strengthen the public health system. We will try to establish within three years a fully functioning system for disease prevention and control and for emergency medical aid that covers both urban and rural areas in order to increase our ability to deal with serious epidemic diseases and other public health emergencies. We need to maintain a high degree of vigilance and take firm and effective measures to control SARS, AIDS, schistosomiasis and other serious communicable diseases.
The second priority is to