2. We will strengthen employment work and the social safety net.

We will continue to put expansion of employment high on the government's agenda for economic and social development. We will follow fiscal, tax and banking policies that promote employment and actively support the efforts of individuals to start their own businesses or find work for themselves. The focus of our employment work will be on finding employment for people who have been laid off and are still unemployed and those who worked at enterprises that are now bankrupt. We need to actively help zero-employment households and people who have difficulty finding employment find jobs, improve guidance and services for university graduates and promote the reform of the way discharged military personnel are assisted in returning to civilian life. We will develop harmonious labor relations, fully implement the labor contract system and protect the lawful rights and interests of workers.

We will step up development of the social safety net. This year's central government budget includes allocations totaling 201.9 billion yuan for strengthening the social safety net, an increase of 24.7 billion yuan over last year. We will continue to improve the basic old-age pension system for enterprise employees and proceed with the expansion of trials to fully fund personal old-age pension accounts. We will improve the system of basic medical insurance and the system of unemployment, workers' compensation, and pregnancy and maternity insurance for urban workers. We will accelerate the establishment of a social safety net targeted at rural migrant workers in cities, with the focus on signing them up for workers' compensation insurance and medical insurance for major diseases. We will step up efforts to formulate methods for transferring social security accounts of workers moving from one region to another. We will further expand coverage for social security, particularly coverage for people employed in the non-public sector such as those working in overseas-funded or private enterprises and urban residents with flexible employment. We will collect and build social security funds through a variety of channels. We will improve the methods for collecting and managing social security premiums to raise the collection rate. We will strengthen oversight and management of social welfare funds such as social security funds and matching fund programs for housing and strictly prevent their misuse. We will energetically develop social welfare programs.

We will improve the urban and rural social welfare system. We will improve the urban basic cost of living allowance system, the urban and rural subsidized medical care system, and the assistance system for urban vagrants and beggars. We will set up a nationwide basic minimum cost of living allowance system this year for rural residents, which is another major measure in the work to resolve issues related to agriculture, rural areas and farmers and build a harmonious society. All local governments should set reasonable eligibility requirements to receive such allowances and a reasonable level for allowances based on local conditions. Areas with financial difficulties will receive appropriate assistance from the central government budget. Setting up a basic cost of living allowance system for all urban and rural residents has great and far-reaching significance for promoting social fairness and building a harmonious society. We will continue to effectively implement preferential treatment policies to appropriately resolve the practical difficulties of entitled groups. We will conscientiously do the work of preventing and mitigating disasters, providing relief for victims of disasters and helping them get back on their feet. We will support the development of charity programs. We will ensure that urban and rural residents, especially the poverty-stricken population, enjoy the benefits of public finance.

3. We will strengthen production safety and improve market order.

We must resolutely work to reduce the occurrence of large-scale major accidents and improve production safety throughout the country. We will closely follow a principle of "safety first with emphasis on prevention and overall control," improve the production safety system, implement a responsibility system to ensure safe production, increase funding for production safety work, and strengthen education and training in production safety. We will bring the problem of coalmine gas buildup under control, remedy safety problems in some coalmines and shut down others. We will carry out a campaign to improve safety in key industries and fields. We will improve public safety in schools and crowded places. We will tighten oversight for production safety in accordance with the law and investigate and prosecute cases involving industrial accidents to the full extent of the law.

We will address both symptoms and root causes to thoroughly improve market order. We will accelerate development of a credit rating system. We will improve the market management system and strengthen market oversight. We will crack down on the production and sale of counterfeit goods, false advertising, commercial fraud, pyramid schemes, including pyramid schemes in disguised forms, tax evasion, tax fraud, smuggling and sale of smuggled goods. We will carry out extensive campaigns to ensure food safety and fully restore order to the pharmaceuticals market to ensure food and drug safety for the people.

4. We will further develop socialist democracy and the socialist legal system.

Developing democracy and improving the legal system is a basic requirement of the socialist system. The most important aspect of building a harmonious society is strengthening democracy and the legal system to promote social fairness and justice. We will actively yet prudently proceed with reforms in the political system and accelerate the development of democracy with Chinese characteristics. We will improve the system for safeguarding the people's democratic rights to ensure that the people are able to manage state affairs, economic and cultural affairs, and the affairs of society in accordance with the law. We will strengthen self-governing local organizations in urban and rural areas. We will expand democracy at the community level, improve the system for transparency in government, factory and village affairs, and ensure that people are able to directly exercise their democratic rights in accordance with the law. Governments at all levels should continue to make decisions scientifically and democratic ally, improve the collective decision-making system, the expert advisory system, the system of public notices and hearings and the decision accountability system for major issues, and ensure that citizens can exercise their right to stay informed of, to participate in, to express opinions about and to oversee government affairs.

We will promote all aspects of government administration by the rule of law. We will strengthen government-sponsored legislation, particularly legislation related to developing social programs, improving the social safety net, strengthening public administration, conserving energy and resources, and protecting the ecosystem. We will implement the administrative law enforcement accountability system to strengthen and improve administrative law enforcement. Law enforcement agencies must exercise their powers and carry out their duties in strict accordance with legally specified limits of authority and procedures. We will further improve administrative oversight. Governments at all levels and their employees must take the lead in observing the Constitution and other laws and handle affairs strictly in accordance with the law. They must conscientiously accept the oversight of the people's congresses and their standing committees and the democratic oversight of the CPPCC, and carefully listen to opinions from t he democratic parties, federations of industry and commerce, persons without party affiliation and people's organizations. They must accept the oversight of the news media and the general public. They must support supervision and auditing authorities in the independent exercise of their oversight duties in accordance with the law. We will tighten checks and oversight on the exercise of state power to ensure that the powers bestowed on us by the people are used for the benefit of the people. We will carry out an extensive campaign to raise public awareness of the law and do a good job in carrying out administrative reviews and providing legal services and assistance to the public. We will continue to reform the judicial administration system to ensure justice in the judicial system.

We will improve work related to ethnic groups, religions and overseas Chinese. We will fully enforce the Law on the Autonomy of Ethnic Minority Regions to consolidate and develop socialist ethnic relations based on equality, solidarity, mutual assistance and harmony. We will faithfully follow the Party's basic principle on work related to religions and conscientiously implement the Regulations on Religious Affairs. We will faithfully follow the Party's policy on overseas Chinese affairs and bring into full play the unique role of overseas Chinese nationals, returned overseas Chinese and their relatives in promoting reunification of the motherland and rejuvenation of the Chinese nation.

5. We need to safeguard social stability and harmony.

We must take safeguarding the lawful rights and interests of the people as the starting point and objective in correctly handling social problems in the new period and promoting social stability and harmony. We will improve the mechanisms for balancing interests, reporting on complaints, identifying and handling problems, and safeguarding the rights and interests of the people. We will earnestly carry out all policies that have a bearing on people's interests and act quickly to address complaints made by the people in accordance with the law and government policy. We will work hard to correct actions that harm the interests of the people in land expropriation and requisition, housing demolition, transformation of enterprises into stock companies and environmental protection. Government employees at all levels, especially senior officials, need to visit ordinary people in their communities and take the initiative to help them solve their problems. We will improve work in communities to strengthen their networks of services and management. We will improve the handling of people's complaints made in letters or through visits and improve the responsibility system for handling them. We will improve the crime prevention and control system in public security. We will intensify efforts to address serious public security issues and improve conditions in areas with poor public security. We will crack down on crimes in accordance with the law to safeguard national security and social stability.

V. Deepening Reforms and Opening Further to the Outside World

We will unswervingly promote reform and opening up and strive for breakthroughs in key areas and crucial links.

We will deepen the reform of SOEs.

First, we need to encourage greater investment of state capital in key industries and areas that are important to national security and comprise the lifeblood of the economy in accordance with the principle of increasing state capital input to some sectors and withdrawing it from others to ensure an appropriate flow of state capital. We will continue restructuring and reorganizing enterprises and support enterprises with the right conditions in their efforts to grow stronger and larger.

Second, we need to promote the reform to introduce the shareholding system in large SOEs, improve their corporate governance and mechanisms for controlling investment risk and for internal oversight and management, and develop a mechanism for personnel hiring and placement and for incentives and restraints that meet the requirements of a modern corporate structure.

Third, we need to improve the oversight system for state-owned assets. We will put in place a budget system for the management of state capital and standardize the way profits are distributed between the state and enterprises. We will carry out a pilot project to compile budgets for the management of state capital this year. We will standardize procedures for transforming SOEs into stock companies and for transferring ownership of state-owned assets to prevent their erosion and protect the lawful rights and interests of enterprise employees.

Fourth, we need to work quickly to solve longstanding problems in SOEs. We will continue to close down or force into bankruptcy depleted mines and enterprises that have long operated in the red with debts surpassing their assets, and actively yet prudently proceed with work of policy-mandated bankruptcy of enterprises. We will further separate core businesses from secondary businesses in enterprises, converting the latter into independent companies, and relieve enterprises of their obligation to operate social programs.

We need to speed up the reform of monopoly industries. We will further relax controls over market entry, introduce a competitive mechanism and diversify the investors in and ownership of monopoly industries. We will deepen reform of the electricity, postal service, telecommunications and railway industries and steadily proceed with the reform of public utilities such as water, gas and heat.

We will encourage, support and guide the development of individual-proprietorship businesses, private companies and other components of the non-public sector of the economy. We will conscientiously implement all policies and measures adopted by the CPC Central Committee and the State Council. We will encourage the non-public sector to participate in the reform of SOEs and to invest in public utilities, infrastructure, financial services and social programs. We will improve policies concerning banking, taxation and technological innovation to improve services for non-public enterprises. We must protect their lawful rights and interests in accordance with the law and strengthen guidance and supervision of them to ensure they operate in accordance with the law.

We will proceed with the reform of the fiscal and tax systems. The timing and conditions are now ripe for unifying the enterprise income tax rates for domestic and overseas-funded enterprises in order to level the playing field. This reform required the formulation of a new law on corporate income tax -- the Law on Corporate Income Tax of the People's Republic of China. The draft of the law will be submitted to you for your deliberation and approval. We will accelerate improvement of the public finance system, improve the system for transfer payments, reform the budget management system, formulate plans and measures to comprehensively implement VAT reforms, and establish a standardized non-tax government revenue system.

We will accelerate reform of the financial system.

First, we need to deepen the reform of state-owned banks. We will consolidate progress in the reform to change state-owned commercial banks into stock companies and continue the reform. We will promote the reform to introduce a shareholding system in the Agricultural Bank of China. We will further reform policy banks, with the focus on the reform of the China Development Bank.

Second, we need to speed up reform of the rural banking system. We will set up a system of rural financial organizations with a proper division of work, diversified investment and a full range of functions that will provide efficient services. We will make full use of the major role of the Agriculture Bank of China and the Agricultural Development Bank of China as the backbone of rural banking, continue to deepen reform of rural credit cooperatives and strengthen the role of the China Postal Savings Bank in serving agriculture, rural areas and farmers. We will appropriately adjust and relax the controls for establishing rural financial institutions with banking functions and encourage capital from various sources to invest in rural financial institutions. We will explore ways to develop new types of financial organizations suitable for rural areas and intensify efforts to make innovations in financial products and services available in rural areas to eliminate the difficulties that farmers encounter in obtaining loans.

Third, we need to vigorously develop the capital markets. We will promote the development of a multi-level system for capital markets and increase the amount and proportion of direct financing. We will steadily develop the stock market, accelerate development of the bond market and actively yet prudently develop the futures market. We will further strengthen basic market systems, proceed with reforms of the system for issuing stocks and bonds to make it more responsive to market conditions, effectively raise the quality of listed companies and strengthen market oversight.

Fourth, we need to deepen the reform of the insurance sector, expand insurance coverage and improve the services of insurance companies and their ability to handle risks.

Fifth, we need to open the financial sector to foreign competition and increase the degree of openness.

Sixth, we need to strengthen and improve financial oversight, improve the mechanism for coordinating oversight and effectively guard against and defuse financial risks in order to maintain China's financial stability and security.

We will promote growth of foreign trade. Promoting economic development and increasing employment through the growth of foreign trade is a principle we must follow for a long time to come. We must optimize the mix of imports and exports, change the pattern of China's foreign trade growth and strive to reduce our excessively large trade surplus. We will support the export of high value-added products and products with Chinese trademarks, expand the export of service products and agricultural products, limit the export of products whose manufacture is highly energy consuming or highly polluting, and promote the upgrading of the processing trade. We will increase imports of energy, raw materials, advanced technology and equipment, and key spare parts and accessories. We will strengthen management, inspection and quarantine work at foreign trade ports.

We will make good use of foreign capital. We will pay close attention to improving the overall quality of foreign investment coming into the country, optimize the mix of funds, and work to bring in more advanced technology, managerial expertise and high-caliber personnel. We need to encourage multinational companies to move their high-end manufacturing facilities and R&D centers to China and guide foreign investors to invest in the central and western regions, northeast China and other old industrial bases, and in areas identified in our industrial policy. We will actively seek to contract work being outsourced by the service industries in other countries and improve the development of China's service industries. We need to improve guidance and standardization for overseas businesses in mergers and acquisitions involving Chinese firms. We will improve the investment environment. We will standardize the way enterprises attract foreign capital and correct the problem of some localities granting preferential policies to potential overseas investors in disguised forms and assigning targets for attracting overseas investment to each level of government in violation of laws and regulations.

We will guide and standardize the overseas investment and international cooperation of Chinese enterprises. We will improve fiscal, tax, credit, foreign exchange and insurance policies and measures to encourage strong, reputable and competitive Chinese enterprises with different types of ownership to go global. We need to strengthen guidance over and coordination among enterprises to avoid haphazard investment and cutthroat competition overseas. We will continue to conclude more contracts for overseas projects and labor services. We will effectively manage overseas economic and trade cooperation zones. We will promote the Doha round of trade talks under the WTO, actively participate in formulation of multilateral trade rules, and steadily promote the development of bilateral and regional free trade zones.

VI. Strengthening Government Reform and Improvement Efforts

The government must constantly work harder to reform and improve itself in order to function well under the new circumstances. We have defined three basic norms for the work of the government over the past few years, namely, scientific and democratic decision making, administration in accordance with the law and stronger administrative oversight. We have paid close attention to fully exercising the government's functions and worked to improve public administration and public services and establish sound mechanisms for responding to public emergencies. We have advanced the reform of the administrative examination and approval system. We have formulated and put into operation the Program for Advancing All Aspects of Government Administration in Accordance with the Law. Finally, we have strengthened supervision and auditing, thus intensifying efforts to combat corruption and build a clean government. The government has made important strides in reforming and improving itself.

In working harder to reform and improve the government, we must always put people first and run the government for the people, and take fulfilling, safeguarding and developing the fundamental interests of the overwhelming majority of the people as both our starting point and objective. We must proceed from China's actual conditions and fully integrate the leadership of the Party, the people's position as the masters of the country and the running of the government according to the rule of law. We must constantly improve the socialist market economy and promote comprehensive, balanced and sustainable economic and social development. We must make innovations in the systems and means of government administration, and increase transparency and public participation in government affairs. Our objective is to build a just, transparent, hard-working, efficient, honest, upright and clean government that follows a well-defined code of conduct, a government with which the people are satisfied.

For some time to come, we need to work to standardize government powers, adjust and optimize government structure and the division of responsibility, improve the methods used to administer government affairs and deliver services, actively take steps to make administrative affairs more open, accelerate the development of e-government and government websites, improve the overall quality of civil servants, comprehensively increase administrative efficiency and strengthen the public's trust in the government. All these efforts have one main purpose, namely, to transform the way the government functions. This year we will focus on the following three tasks.

One is to improve the macroeconomic regulatory system, continue the work of separating government administration from enterprise management, and deepen reform of the administrative examination and approval system to reduce the number of items subject to administrative examination and approval and improve efficiency.

Two is to improve public administration and public services, increase the government's ability to provide basic public services and strive to resolve the issues of greatest concern to the people. Three is to standardize administrative actions in accordance with the law, work hard to build a clean government and combat corruption, and improve the system for punishing and preventing corruption that combines education, regulation and oversight.

We will work vigorously to improve the government's work style. One important task we are now facing is to deal with the serious problem of extravagance and waste in some government bodies. Quite a few local governments, government offices and organizations compete with one another for lavishness and spend money hand over foot, which arouses strong public resentment. We must put a resolute stop to these unhealthy practices. We will strictly control the construction and expansion of government office buildings, absolutely stop the construction of more luxury government building projects, truly standardize official entertaining, plug up loopholes in management rules, and work to reduce government overhead and build a conservation-minded government.

Fellow Deputies,

Building a solid national defense system and a powerful people's army is a strategic task in socialist modernization. We must continue to take as our guide Mao Zedong's military thinking, Deng Xiaoping's thinking on strengthening the army in the new period, and Jiang Zemin's thinking on developing national defense and strengthening the army, and strictly follow the important guidelines of Comrade Hu Jintao on strengthening the army. We must comprehensively put into practice the Scientific Outlook on Development, effectively carry out the historic mission of the army in the new stage of the new century, continue to give high priority to raising the overall ideological and political standards of the army, energetically work for progress in military reform with Chinese characteristics, and ensure a high degree of stability, centralization and unity in the army in order to provide a solid and strong guarantee for China's security, unity and modernization. We must energetically carry out the transformation from military training based on mechanized warfare to military training for warfare under conditions of greater IT application to increase the troops' ability to fight a defensive IT war. We will intensify defense-related research and efforts to produce advanced weaponry and equipment. We will carry out development and reform of the military logistics system. We will continue to run the army in accordance with the law and high standards and work to raise its level of standardization. We must improve all aspects of the People's Armed Police to make it better able to enforce the law, respond to emergencies, combat terrorism and safeguard national stability. We will expand public education in national defense and improve the system for national defense mobilization. We will encourage government agencies and the public to support the army and give preferential treatment to families of service personnel and martyrs, urge the army to support the government and respect civilians, and support the army and the people in working together to promote cultural and ethical progress. We will consolidate and develop solidarity between the army and the government and between the army and the people.

Fellow Deputies,

We will continue to unswervingly uphold 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. We will strictly comply with the basic laws of the Hong Kong and Macao special administrative regions and give our full support to their chief executives and governments in administering the two regions in accordance with the law and in their efforts to promote economic development, improve the lives of their populations and strengthen harmony. We will increase exchanges and cooperation between the mainland and Hong Kong and Macao in the areas of the economy, trade, science, technology, education, culture, health and sports. Let us work together with people from all sectors of society in Hong Kong and Macao to safeguard the long-term prosperity and stability of the two regions.

We remain committed to the basic principle of "peaceful reunification and one country, two systems" and to all the policies for developing relations between the two sides of the Taiwan Straits and promoting China's peaceful reunification under the changed circumstances. We will unite with Taiwan compatriots in firm opposition to all forms of secessionist activities such as calls for Taiwan independence through legislation. We will firmly adhere to the main goal of promoting development of peaceful cross-straits relations, vigorously expand exchanges and cooperation between the two sides, promote resumption of direct links for postal, air and shipping services and trade, and make every effort with the utmost sincerity to seek peace, development and prosperity for the people on both sides. We will continue to step up dialogue and exchanges on the basis of the one-China principle with all political parties in Taiwan that advocate development of cross-straits relations. We will strive to resume dialogue an d negotiations between the two sides as soon as possible and work for greater peace and stability in cross-straits relations. We firmly believe that with the efforts of all Chinese people, including our Taiwan compatriots, complete reunification of China will definitely be realized!

Follow Deputies,

Taking both the international and domestic situations into consideration, during the last year we actively advocated the building of a harmonious world, promoted comprehensive development of our relations with other countries, and contributed to the development of all countries and the safeguarding of world peace.

We call for and promote the building of a harmonious world, which is in line with the trend of the times in the world today and reflects the common interests and aspirations of people across the globe. This embodies a firm commitment on the part of the Chinese government and people to work for world peace and progress. In order to build a harmonious world, there must be political equality and democracy, mutually beneficial economic cooperation, and cultural exchanges that promote common progress, and countries of the world must work together in friendly cooperation to address traditional and non-traditional global security threats and bring about lasting peace and common prosperity for the whole world. In the face of a complicated and fluid international situation, we need to hold high the banner of peace, development and cooperation, firmly adhere to the path of peaceful development, steadfastly pursue an independent foreign policy of peace, maintain friendly relations with other countries based on the Five Principles of Peaceful Coexistence, safeguard China's sovereignty, security and interests, ensure that China is able to take advantage of this period of important strategic opportunities, and create a favorable external environment for building a moderately prosperous society in all respects and accelerating socialist modernization.

We will vigorously develop exchanges and cooperation with other countries in the fields of the economy, trade, science, technology, culture, education and sports, increase understanding and friendship between our peoples, develop the image of China as a peaceful, democratic, culturally advanced and progressive country, safeguard the lawful rights and interests of Chinese nationals and corporations overseas, and respect and protect the lawful rights and interests of foreign nationals in China in accordance with the law.

We will work untiringly with the people of all other countries for a harmonious world with lasting peace and prosperity for all.

Fellow Deputies,

Looking ahead, we see the future holds bright prospects for our great motherland. Our mission is lofty and sacred, and our responsibilities are both arduous and glorious. Let us unite closely around the CPC Central Committee with Comrade Hu Jintao as General Secretary, hold high the great banner of Deng Xiaoping Theory and the important thought of Three Represents, fully put into practice the Scientific Outlook on Development and accelerate the building of a harmonious socialist society. Let us work together with one heart and one mind, blaze new trails, and energetically progress with reform, opening up and socialist modernization!