Full text: Report on China's economic, social development plan

    Second Session of the Twelfth National People's Congress

    March 5, 2014

    National Development and Reform Commission

Fellow Deputies,

The National Development and Reform Commission has been entrusted by the State Council to submit this report on the implementation of the 2013 plan and on the 2014 draft plan for national economic and social development to the Second Session of the Twelfth National People's Congress (NPC) for your deliberation and for comments from the members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).

I. Implementation of the 2013 Plan for National Economic and Social Development

In the face of the complex domestic and international situations in 2013, all regions and government departments adhered to the general work guideline of making progress while maintaining stability; to the policy of maintaining stable growth, making structural adjustments and advancing reform; and to the requirement that our macro policies be stable, micro policies be flexible and social policies meet people's basic needs in accordance with the policies and plans of the Central Committee of the Communist Party of China (CPC) and the State Council. They did all their work well on the basis of the Plan for National Economic and Social Development approved at the First Session of the Twelfth NPC. As a result, economic and social development got off to a good start and overall implementation of the plan was good.

1. The economy performed within a proper range.

We did not waver on our policy. We created new ideas and methods of control. As a result, economic and social development progressed and improved steadily.

First, the economy as a whole was stable. Preliminary assessments indicate that China's GDP reached 56.88 trillion yuan, an increase of 7.7% over the previous year and in full accord with the targeted figure. China's government revenue increased by 10.1% to 12.91 trillion yuan and the deficit was 1.2 trillion yuan. RMB loans for the year increased by 8.89 trillion yuan. At year' s end, the broad money supply (M2) rose 13.6%. Profits of industrial enterprises with annual revenue of 20 million yuan or more from their main business operations reached 6.28 trillion yuan, an increase of 12.2% over the previous year. Demand for coal, electricity, petroleum, gas, and transport was satisfactorily met in critical areas and at important times.

Second, domestic demand continued to be the main driving force of growth. Retail sales of consumer goods totaled 23.78 trillion yuan, an increase of 13.1%. A number of new forms and areas of consumption were very vigorous, and the value of e-commerce transactions exceeded ten trillion yuan, an increase of more than 25%. China's total investment in fixed assets amounted to 44.71 trillion yuan, an increase of 19.3%. Private investment increased by 23.1% and accounted for 63% of the investment in fixed assets (excluding investment by rural households), 1.8 percentage points higher than the previous year. The contribution of domestic demand to economic growth reached 104.4%.

Third, overall price levels were basically stable. Consumer prices for the year rose 2.6%, within the targeted range. The work of purchasing, storing and releasing important commodities and of adjusting their imports and exports proceeded in good order. Trials of a policy-based insurance system for the market prices of hogs and vegetables were energetically carried out. We intensified inspection of prices and fees and law enforcement against monopolistic pricing, and handled 34,400 cases of pricing violations for the year and assessed fines totaling 3.125 billion yuan.

2. Progress was made in structural adjustment.

We stressed priorities, supported some areas while restricting others, and strove to raise the quality and returns of development and promote industrial upgrading in order to enhance the sustainability of economic development.

First, industrial structural adjustment proceeded steadily. Significant achievements were made in technological innovations and fostering emerging industries. R&D expenses accounted for 2.09% of GDP, hitting the targeted figure. The lunar lander Chang-e 3, the Shenzhou-10 manned spacecraft, the deep-sea manned submersible Jiaolong and other major innovative achievements captured the world's attention. Strategic emerging industries developed quickly, such as energy conservation and environmental protection, next-generation information technology, new energy, high-end equipment manufacturing, and new materials; and we began to put the 4G mobile communications system to commercial operation on a large scale. Value added of high-tech manufacturing industries grew by 11.8%, 2.1 percentage points higher than in industrial enterprises with annual revenue of 20 million yuan or more from their main business operations. We moved faster to transform and update traditional industries and worked harder to solve the problem of excess production capacity. We issued a notice to keep industries with a serious problem of overcapacity from expanding blindly. We issued guidelines and accompanying policies and measures for solving the serious problem of excess production capacity, and put great effort into resolving the problem of overcapacity in the steel, cement, electrolytic aluminum, plate glass and shipbuilding industries. We optimized the environment for developing the service sector. We issued policies and guidelines to spur the development of information consumption, elderly services and health services, issued a plan for developing a nationwide network of logistics parks, and continued to carry out comprehensive trial reforms in the service sector. Value added of the service sector increased by 8.3%, and it accounted for 46.1% of GDP, surpassing secondary industry for the first time. Basic industry developed quickly. There were 5,586 kilometers of new railway lines put into operation, of which 1,672 kilometers were high-speed lines. There were 70,300 kilometers of new highways put into service, of which 8,260 kilometers were expressways. We also put into service 110 berths for 10,000-ton class or larger ships and added ten new civilian airports. Power generation was stable, and the output of raw coal, crude oil and natural gas rose by 0.8%, 1.8% and 9.4%, respectively. The mix of energy sources was further improved, and energy generated from non-fossil fuels accounted for 9.8% of primary energy consumption, an increase of 0.4 percentage points over the previous year.

Second, the integration of urban and rural development proceeded in an orderly fashion. We conscientiously implemented the policy of boosting agriculture, benefiting farmers and increasing rural prosperity, and more than half of the central government budget allocated for investment was spent on agriculture, rural areas and farmers. Overall agricultural production capacity increased, and total grain production reached 602 million metric tons, the tenth consecutive year of growth. The supply of meat, eggs, milk, fruits, vegetables and fish was stable. Advances in agricultural science and technology contributed 55.2% to agricultural development, a rise of 0.7 percentage points over the previous year. The percentage of the rural population with access to safe drinking water reached 88.5%; 211,000 kilometers of rural power lines and 210,000 kilometers of rural roads were either built or upgraded; 800,000 rural households began using methane gas; and 2.66 million dilapidated rural homes were renovated. Grain silos with a capacity of 4.4 million metric tons and 114 wholesale markets for agricultural products were built. The central government made comprehensive arrangements for actively and prudently carrying out a new type of urbanization, and the state plan for new urbanization was basically completed. A total of 53.73% of the population in China were permanent urban residents, an increase of 1.16 percentage points over the previous year.

Third, development in different regions became better balanced. In the western region, construction on transportation, water conservancy, energy and other major infrastructure projects was strengthened; construction began on 20 key projects, with a total investment of 326.5 billion yuan; and the pace of development and opening up of inland and border areas was accelerated. We deepened the execution of the strategy to invigorate northeast China and other old industrial bases, launched pilot programs to relocate and upgrade old urban industrial areas as well as independent industrial and mining areas, and introduced the Plan for Transforming and Upgrading Old Industrial Bases Nationwide and the Plan for Sustainable Development of Resource-Dependent Cities. In central China, the city clusters gathered in the middle reaches of the Yangtze River and the Central Plains Economic Zone are having a greater magnet effect, and construction on demonstration zones posed to carry on relocated industries proceeded smoothly. In the eastern region, industrial transformation and upgrading picked up speed and the pilot project to develop the marine economy proceeded in an orderly way. The plan to develop functional zones was implemented thoroughly. Smooth progress was made in cooperation between regions and pairing assistance. We continued to increase support to old revolutionary base areas, ethnic minority areas, border areas and poor areas. We smoothly carried out the plan for development and poverty alleviation in contiguous areas with acute difficulties. Post-earthquake recovery and reconstruction efforts in Yushu were brought to closure and post-earthquake recovery and reconstruction efforts in Lushan, Sichuan Province, and Min and Zhang counties, Gansu Province, registered steady progress.

Fourth, efforts were accelerated to conserve energy, reduce emissions and protect the environment. We issued and implemented the National Strategy for Adaptation to Climate Change, the Strategy and Near-term Action Plan for Developing the Circular Economy, the Guidelines on Accelerating Development of Energy-Efficient and Environmentally Friendly Industries, and the Action Plan for Preventing and Controlling Air Pollution. We worked to conserve energy and reduce emissions in key areas and enterprises and made steady progress in comprehensively improving the water environment in key watersheds and areas. We pushed ahead with ecological projects to protect virgin forests, control the sources of dust storms affecting Beijing and Tianjin, prevent the spread of stony deserts, and return marginal farmland to forests and grazing land to grasslands, and afforested 6.09 million hectares of land. Targets of energy conservation and environmental protection were basically attained: energy consumption and carbon dioxide emissions per unit of GDP dropped 3.7% and 4.36%, respectively; emissions of sulfur dioxide, chemical oxygen demand, ammoniacal nitrogen, and nitrogen oxides dropped 3.48%, 2.93%, 3.14%, and 4.72%, respectively; water consumption per 10,000 yuan of value-added by industry decreased 5.7%; and the percentages of urban sewage treated and urban household waste safely handled reached 87.9% and 85.8%, respectively. We played an active and constructive part in international talks and communication and cooperation on responding to climate change.

3. Reform and opening up were intensified.

We comprehensively advanced economic structural reform and created sound systems and mechanisms for maintaining stable growth and carrying out structural adjustments.

First, we obtained significant results in reforming administrative systems. We smoothly advanced institutional reform of the State Council, thoroughly reformed the system of government review and approval, eliminated or delegated 416 items that required review and approval, and implemented strict measures to control the issuance of new administrative permits for items. We unveiled and implemented the guidelines on government purchase of social services. We accelerated reform of the registration system for registered capital. Initial steps were taken to establish a registration system for immovable property.

Second, we deepened reform of the fiscal, tax, and financial systems. A pilot project was carried out across the country to replace business tax with VAT in the transportation industry and some modern service industries. We reduced the tax burden of businesses by more than 140 billion yuan for the year. We raised VAT and business tax thresholds for small and micro businesses, benefiting more than six million businesses. We lifted controls on interest rates on all loans. The trial for implementing the National Equities and Exchange Quotations was extended to all parts of the country. Trials of securitizing credit assets were expanded. We introduced guidelines on reforming IPO and better protecting the rights and interests of small and medium-sized investors. We created new corporate bonds as well as new review and approval methods.

Third, we made positive progress in reforming the investment system. We revised the list of investment projects requiring government examination and approval and reduced the investment projects subject to central government examination and approval by 60%. We improved management of subsidies and discounts for investments from the central government budget, and delegated the authority to grant subsidies and discounts for 31 types of such investment projects that cover a wide range of areas, are large in number, or require less funding individually. We deepened reform of the investment and financing system for the railway industry. We arranged a third-party assessment of the implementation of the Guidelines on Encouraging and Guiding the Sound Development of Private Investment, and implemented and improved policies and measures to encourage the sound development of private investment.

Fourth, we constantly improved the pricing mechanism for resource products. We introduced a new pricing mechanism for refined oil products, promulgated pricing policies to support the upgrading of the quality of processed oil, and adjusted city gate prices for consumption of natural gas by nonresidents. We raised the surcharge on electricity generated from renewable energy sources and the prices for electricity generated by environmentally friendly facilities; improved the pricing mechanisms for on-grid electricity generated from nuclear, hydro and photovoltaic power; and successfully abolished the dual-pricing system for coal used to generate electricity.

Fifth, we actively advanced rural reforms. We basically completed the work of determining, registering and certifying rural collective land ownership nationwide, and extended the trials of determining and registering contracted rural land-use rights to 105 counties, county-level cities and districts. We carried out trial reforms of state-owned forestry farms in seven provinces.

Sixth, we made steady progress in social reforms. We issued guidelines for implementation on deepening reform of the income distribution system. We launched a pilot program of insurance against major diseases for rural and non-working urban residents in 28 provinces, autonomous regions and municipalities directly under the central government, and carried out trials on comprehensive reform in over 1,000 county-level public hospitals. The first two groups of publishers of newspapers and periodicals that do not cover current political affairs basically completed their trial reform to become businesses. The food and drug oversight and supervision systems improved.

In addition, we continued to deepen reform of state-owned enterprises (SOEs) and key industries. We launched comprehensive coordinated trial reforms to develop modern agriculture in the Sanjiang and Songnen plains of Heilongjiang Province, and arranged third-party assessments and self-assessments of 11 national experimental zones for comprehensive coordinated reforms.

We opened further to the outside world. China's total imports and exports increased by 7.6%, 1.4 percentage points higher than the previous year. Non-financial foreign direct investment actually utilized in 2013 totaled US$117.6 billion, up 5.3%. Foreign investment in service industries utilized exceeded half of their total for the first time. Foreign investment moved faster to the central and western regions. China's non-financial outward direct investment reached $90.2 billion, up 16.8%. The China (Shanghai) Pilot Free Trade Zone was opened. We helped reach an early harvest agreement in the WTO Doha Round of negotiations, and concluded free trade agreements with Switzerland and Iceland. We actively implemented the strategic concepts of establishing a Silk Road economic belt and a 21st century maritime Silk Road, and promoted balanced development of the Bangladesh-China-India-Myanmar Economic Corridor and the China-Pakistan Economic Corridor.

4. The people's living standards improved.

We increased investment and improved policies and measures to promote coordinated economic and social development.

First, employment remained stable on the whole. An additional 13.1 million urban jobs were created, and the urban registered unemployment rate stood at 4.05% at the end of 2013, exceeding expected targets. The policy for supporting college graduates in finding jobs or starting their own businesses was satisfactorily implemented, the employment assistance system for people having difficulty finding jobs was improved, and public employment service facilities continued to improve.

Second, personal income increased. Urban per capita disposable income rose by 7% in real terms and rural per capita net income increased by 9.3% in real terms. Rural income growth surpassed urban income growth for the fourth consecutive year, the number of rural residents living in poverty decreased by 16.5 million, and the gap between urban and rural incomes continued to narrow.

Third, social security coverage expanded. We accelerated the coordination of basic old-age insurance and basic medical insurance in urban and rural areas in an overall manner, further standardized the subsistence allowance systems for urban and rural residents, and established temporary assistance systems in 26 provincial-level administrative areas. We improved the mechanism that increases social assistance and social security benefits to offset the effects of inflation. By the end of 2013, 346 million urban residents had joined the basic old-age insurance system, and 474 million rural residents had joined the new type of rural old-age insurance system, an increase of 20.83 million and 10.82 million, respectively. Basic old-age pensions for enterprise retirees increased by 10%. Annual government subsidies for basic medical insurance for non-working urban residents and the new rural cooperative medical care system were raised from 240 yuan to 280 yuan per person.

Fourth, education developed steadily. We continued to promote preschool education in rural areas, intensified the standardization of compulsory education schools, and steadily improved the basic conditions of poorly built and run schools providing compulsory education in poor areas. We effectively implemented the policy to grant children who live in urban areas with their rural migrant worker parents the same eligibility to go to secondary school or college as local students after receiving compulsory education. The ratio of rural students admitted to key colleges and universities is on the increase. The retention rate of nine-year compulsory education was 92.3%, up 0.5 percentage points over the previous year; the gross enrollment ratio for senior secondary education reached 86%, up one percentage point; and regular undergraduate and graduate enrollment totaled 6.998 million and 779,000, respectively, including 611,000 full-time graduates.

Fifth, the medical and health care services systems continued to improve. We strengthened the development of the public health services system, the medical services system, the family planning services system, centers for training general practitioners, and programs to make medical and health care services information-based. We increased annual per capita spending on basic public health services from 25 yuan to 30 yuan. Hospitals and health care institutions had 4.55 beds per 1,000 people, up 7.3%. The natural population growth rate was 4.92 per thousand, which met the planned target.

Sixth, the public cultural services system constantly improved. We steadily pressed ahead with cultural projects to benefit the people such as the extension of radio and television coverage to all villages and the enjoying of national cultural information resources together, and continued to implement special projects to develop facilities for preserving national cultural and natural heritage sites. The Tourism Law and the National Tourism and Recreation Program were introduced and revenue from tourism totaled 2.95 trillion yuan for the year, an increase of 14% over the previous year. We increased funding for recreational sports, and built 51,800 sports venues for the year.

Seventh, construction on government-subsidized housing picked up speed. Last year we basically completed work on 5.44 million government-subsidized housing units in urban areas and began construction on an additional 6.66 million units, with both numbers exceeding the planned figure.

In the face of complex situations at home and abroad, we maintained steady economic development and overall social harmony and stability. These hard won achievements can be attributed to the good policymaking and correct leadership of the CPC Central Committee and the State Council, the concerted efforts and vigorous implementation of all regions and government departments, and the arduous work and joint efforts of the people of all China's ethnic groups.

As we look at these achievements, we are also keenly aware that we still face a number of conflicts and difficulties in economic and social development. The world economy continues to recover slowly and is still beset with instability and uncertainty. Domestically, unbalanced, uncoordinated and unsustainable development remains a serious problem, and the foundation for steady economic growth is not yet firm.

First, the impetus for economic growth is not strong. There are few new growth areas of consumption, our ability to make new investment is weak, and the export situation remains grim.

Second, the task of improving and upgrading the economic structure is still arduous. The problem of overcapacity is serious in some industries. The transformation of scientific and technological results into productive forces is insufficient. Some enterprises are experiencing difficulties in their production and operations.

Third, problems hindering steady agricultural development are prominent. Resource and environmental constraints have tightened; infrastructure for irrigation and water conservancy is still weak; the existing production management system falls short of the development needs of modern agriculture; and agricultural production is not profitable.

Fourth, the problems of consumption of resources and environmental pollution are prominent. The tasks of conserving energy and reducing emissions are arduous; in particular, smog frequently engulfs large areas of China and seriously affects people's lives and health.

Fifth, hidden fiscal and financial risks cannot be overlooked. The debt burden of some local governments and industries is heavy, some enterprises are too deeply in debt, the nonperforming assets of financial institutions have risen, and liquidity risk management has become more difficult. In addition, the problem of structural unemployment is prominent, housing prices in some large cities are rising too fast, and there are risks and hidden dangers in the real estate market. There are also prominent problems concerning food and drug quality, workplace safety, income distribution, and land expropriation and resettlement.

We must take these problems very seriously and adopt measures to resolve them.

II. General Requirements and Major Targets and Policies for Economic and Social Development in 2014

The year 2014 is the first year for implementing the decision of the CPC Central Committee to comprehensively deepen reform and a crucial year for fulfilling the targets and tasks set in the Twelfth Five-Year Plan. We need to thoroughly implement the guiding principles of the Eighteenth National Party Congress and the second and third plenary sessions of the Eighteenth CPC Central Committee, accord with the policy decisions and arrangements of the Central Committee and the State Council, adhere to the general work principle of making progress while maintaining stability, carry out reform and innovation in all areas of economic and social development, maintain continuity and stability in our macroeconomic policy, strive to invigorate the market, accelerate the shift in the growth model and structural adjustment, intensify development of the basic public services system, work hard to ensure and improve people's wellbeing, genuinely raise the quality and returns of economic development, and promote sustained, sound economic growth and social harmony and stability.

In view of these requirements and after consideration of what is needed versus what is possible, we have set the following main targets for economic and social development in 2014.

- Keeping economic growth within a proper range. GDP is projected to grow by around 7.5%. This target has been set on the basis of overall consideration of the need to implement reform, promote adjustment, improve people's wellbeing, and guard against risks. On the one hand, development still holds the key to solving all our country's problems. To move economic structural adjustment forward, stabilize and increase employment and ensure and improve people's wellbeing, we must keep the economy growing within a reasonable range. We must rely on development even more to further reduce poverty and finish building a moderately prosperous society in all respects. On the other hand, there are quite a few favorable conditions for us to maintain steady growth this year. Our efforts to comprehensively deepen reform will give fresh impetus and vitality to economic development, policies and measures introduced earlier to keep growth stable will continue to have an effect, and consumption, investment and external demand will all provide support for our economic growth. At the same time, it is inappropriate to set a growth rate that is too high. China is now in a crucial stage of hastening the shift in the growth model and the job of industrial transformation and upgrading is heavy. The growth rate of around 7.5% is an economic growth target that is flexible and guiding. Local governments should properly set their own growth rates in line with their actual conditions, and must not seek faster growth or compete with each other to have the highest growth rate.

- Focusing on raising the quality and returns of economic development and promoting industrial upgrading. We will accelerate development of modern service industries, and the share of value-added by the service sector in GDP will continue to rise. Our R&D spending will account for a higher proportion of GDP, the transformation and upgrading of traditional industries will be accelerated, and strategic emerging industries will enjoy healthy development. A new type of urbanization will proceed in an orderly way, and development in different regions will become better balanced. Positive ecological progress will be made. Energy consumption per unit of GDP will drop more than 3.9%; carbon dioxide emissions per unit of GDP will fall 4%; the emissions of sulfur dioxide, chemical oxygen demand, and ammoniacal nitrogen will all drop 2%, and nitrogen oxides emissions, 5%. Water consumption per 10,000 yuan of value-added of industry will decrease 5.2%. Accelerating economic transformation and upgrading is an onerous and pressing task facing us, and we must not sacrifice structural adjustment as well as natural resources and the environment for the sake of rapid growth. This combination of targets that has been put forward will guide all sectors to channel their energy into improving the industrial structure, pressing ahead with a new type of urbanization, better balancing development in different regions, and promoting ecological advancement; to remove major structural barriers; and to improve the quality and returns of economic development.

- Keeping prices basically stable. The rise in the CPI will be kept at about 3.5%. In setting this target, we have considered factors causing inflation and people' s ability to tolerate it, and have also left space for reform and structural adjustment. On the one hand, the present basic equilibrium between aggregate supply and aggregate demand, the year-to-year increases in grain output, and the ample supply of almost all products provide a good foundation and many beneficial conditions for keeping overall prices basically stable. On the other hand, there is some upward pressure on inflation this year, and there are both the carry-over effect of last year' s inflation and new factors causing inflation. At the same time, there is the need to move forward with the reform of prices of resource products. We will therefore need to work hard to attain this target.

- Giving high priority to improving people's wellbeing. More than ten million urban jobs will be added this year; the registered urban unemployment rate will be kept under 4.6%, and the survey-based unemployment rate in large cities will be kept at an appropriate level. Both urban and rural incomes will increase basically in step with economic growth. The social security system will be improved. Basic public services will be made more equally available. The natural population growth rate will be kept under 6.5 per thousand. Work on 4.8 million government-subsidized housing units will be basically completed in urban areas, and construction will begin on an additional seven million-plus units. This year' s target for urban job creation is one million more than last year mainly to better meet the needs of the urban workforce entering the job market for the first time and to respond to the fact that employment pressure will be considerable because more students will graduate from college this year. At the same time, we have the conditions to meet this target because as the GDP base increases and service sector growth speeds up, more jobs will be created with every percentage point growth in GDP.

- Maintaining basic balance in international payments. Total imports and exports will grow roughly 7.5%, and the trade in services will develop more rapidly. Overseas investment will increase steadily. Total foreign investment in China will remain stable and its structure will be improved. The policies for promoting steady import and export growth will continue to produce effects, which will help boost business confidence and maintain stable growth of foreign trade. However, at the same time, competition in the international market is escalating, investment and trade protectionism is clearly reasserting itself, and China's export situation remains grave. We are thus under considerable pressure to consolidate and expand external demand.

To achieve these targets for economic and social development and do our economic work well in 2014, we must seek progress while ensuring stability and carry forward reform and innovation. To this end, we will continue to implement a proactive fiscal policy and a prudent monetary policy, constantly improve our methods and tools of macro control, and make controls more forward-looking, targeted and balanced.

We will continue to implement a proactive fiscal policy. The national deficit for this year is projected to be 1.35 trillion yuan or 2.1% of GDP, an increase of 150 billion yuan over last year' s budget. Of this amount the central government deficit is 950 billion yuan, and the remaining 400 billion yuan is local government deficit in treasury bonds of the central government [xx please leave these xx alone for now]. Our policy priorities will be as follows:

First, we will improve the structural tax reduction policy by extending the trial of replacing business tax with VAT to more industries, extending preferential tax policies to more small businesses with low profits, and implementing fiscal and tax policies to encourage the development of annuities in business and industry retirement plans.

Second, we will improve the structure of expenditures. We will continue to focus on ensuring and improving people's wellbeing and give preferential treatment to agriculture, education, social security, health, environmental protection, and science and technology. We will strictly control our expenditures on official overseas visits, official vehicles, and official hospitality to cut administrative costs.

Third, we will use additional capital well, seek greater returns on assets on hand, develop a mechanism for clearing carryover funds on a regular basis, and use funds more through overall planning.

Fourth, we will strengthen management of local government debt, move faster to create a mechanism for local governments to borrow money mainly through issuance of government bonds, and work to put in place standardized, proper mechanisms for managing central and local government debts and giving early warning against debt risks.

We will continue to implement a prudent monetary policy. M2 is forecast to grow at around 13% this year. Our policy priorities are:

First, we will apply a combination of monetary policy tools, strengthen macro-prudential management, guide steady and appropriate growth in the supply of money and credit and the aggregate financing to the real economy, maintain proper liquidity, and create a stable monetary and banking environment.

Second, we will improve the allocation of financial resources, make good use of both existing and additional financial resources, and speed up the turnover of funds. We will encourage and guide financial institutions to increase their financial support for agriculture, rural areas and farmers, small businesses with low profits, and structural adjustments; and we will increase the ability of the financial services sector to serve the real economy and support industrial transformation and upgrading. We will diversify financial markets and products as well as market actors, and increase the proportion of direct financing.

Third, we will improve the mechanism for coordinating oversight and supervision efforts in the financial sector; tighten oversight over risks from credit, bonds, wealth investment products, interbank trading, trusts and similar businesses; and hold to the bottom line of making sure that no systemic or regional financial risks occur. We will keep a close watch on the cross-border flow of capital and prevent major shocks to economic and financial activities caused by the high-volume abnormal flow of capital. We will keep the RMB exchange rate basically stable at an appropriate, balanced level.

III. Major Tasks for Economic and Social Development in 2014

This year we will do our work well in the following nine areas:

1. Comprehensively deepen reform and expand opening up

1) Reform of the administrative system. We will abolish or delegate to lower-level governments more items requiring central government review and approval, and set up a system for listing all items for which government review and approval must be retained and release the list to the public. We will move faster to establish a mechanism of coordinating management between government bodies at both the same and different levels and improve methods of government supervision. We will continue promoting the industrial and commercial registration system in which the practice of issuing an operating permit before a license is replaced with the practice of license first, operating permit second. We will carry out reform of the system for the use of official cars. We will conduct trials to separate industry associations and chambers of commerce from administrative bodies.

2) SOE reform. We will correctly define the functions of different SOEs and reform natural monopoly industries. We will encourage non-public businesses to take part in SOE reform and vigorously develop mixed-ownership structures. We will improve the system for managing state-owned assets.

3) Reform of the fiscal and tax systems. We will take further steps to release the budgets and final accounts of governments and departments, increase the proportion of general transfer payments, and reduce special transfer payments. We will improve budgets for state capital operations and raise the proportion of profits from state capital operations central government enterprises should turn over to public finance. We will adjust the scope of, links to and rates of excise tax collection and reform the resource tax on coal. We will study how to properly share power between the central and local governments in a step-by-step manner.

4) Reform of the financial system. We will put in place a deposit insurance system, take steady steps to advance the reform of policy-based financial institutions and encourage the establishment of small and medium-sized private banks and other financial institutions, and improve the risk disposal mechanism for financial institutions. We will promote reform of the stock issuance system. We will further deregulate interest rates. We will promote the healthy development of Internet banking. We will try harder to form a market-based exchange rate mechanism, expand cross-border use of the RMB, and promote the RMB's convertibility under capital accounts.

5) Pricing reform of resource products. We will adjust the prices of on-grid wind power in good time, carry out price reforms of electricity transmission and distribution on a trial basis, and improve the mechanism for coupling the prices of coal to those of electricity and the mechanism for pricing electricity generated by pumped-storage plants. We will make timely adjustments to city gate prices for non-household natural gas equivalent to the amount used in 2012. We will establish a sound system of tiered pricing for household consumption of water and natural gas. We will raise fees for the discharge of major pollutants and the prices of water supplied to some water conservancy projects. We will improve the mechanism for setting rail fares.

6) Reform of the investment system. We will move faster to introduce regulations on government investment. We will revise the methods for reviewing and approving items to be funded by domestic enterprises and foreign capital as well as outbound investment projects. We will improve the way in which review and approval work is carried out, and simplify the process to make it more efficient and transparent. We will carry out the reform of the investment and financing systems for the railway industry.

7) Reform of rural systems. We will prudently carry out the trial reform of the rural land system, and quickly determine, register and certify contracted rural land-use rights and use rights of collective land for construction purposes. We will promote the transfer of contracted rural land-use rights in an orderly manner, and develop multiple forms of larger-scale operations. We will improve the land expropriation system and safeguard farmers' fair share of value added to land. We will improve the system of commercial agricultural services and expand the trials to provide commercial services for the whole process of agricultural production. We will improve reform of the collective forest tenure system and advance reform of state-owned forestry farms and areas. We will continue with the reform to relieve state-owned farms of social services.

8) Reform of and innovations in social programs. We will advance reforms in vocational education and in examination and enrollment, and encourage nongovernmental investment in education. We will expand the comprehensive trial reform of public hospitals, and consolidate and improve the system of using basic medicines and the new operating mechanisms of community-level medical and health care institutions. We will encourage cultural enterprises' acquisitions and reorganizations across regions, industries and forms of ownership, and allow nongovernmental capital to hold controlling shares in state-owned film and television studios and theatre troupes to transform them into businesses. We will press ahead with the trials to comprehensively reform services for the elderly. We will lift control of some service prices and charges in the process of reforming social programs. In addition, we will steadily push forward national integrated reforms on a trial basis.

We will vigorously implement the win-win strategy of opening up and raise our level of opening to the outside world.

1) Improving the import and export makeup. We will consolidate our traditional advantages in export; get the export of large equipment sets to stimulate the export of interrelated industries and services; and give exports greater support in credit insurance and financing. We will guide the upgrading of the processing trade. We will appropriately handle trade frictions. We will increase the import of technologies, resources, and products in short supply domestically. We will energetically promote trade in services.

2) Relaxing controls over market access for foreign investment. We will deepen reform of the system for managing foreign investment and explore ways to provide it with pre-establishment national treatment together with negative list management. We will move faster to open banking, education, culture, medical care and other services to foreign investment in an orderly way. We will encourage the China (Shanghai) Pilot Free Trade Zone to lead the way and explore new paths in reform. We will improve the security review system for businesses involving foreign capital. Non-financial foreign direct investment is expected to reach $121.7 billion in 2014, up 3.5%.

3) Supporting capable Chinese enterprises in going global more quickly. We will improve policies supporting outbound investment, reform and simplify foreign exchange controls, efficiently utilize foreign exchange reserves to support outbound investment, deepen outbound cooperation and investment in energy and resources and agricultural development, and guide advantageous industries to do business globally. China's non-financial outbound direct investment will amount to $99.2 billion in 2014, an increase of 10%.

4) Strengthening bilateral, multilateral and regional economic cooperation. We will open China's inland and border areas wider to the outside world, and holistically push forward the building of major international thoroughfares in the interior region of the country. We will work vigorously to build the Silk Road Economic Belt, the 21st Century Maritime Silk Road, the Bangladesh-China-India-Myanmar Economic Corridor and the China-Pakistan Economic Corridor, and strengthen infrastructure connectivity with neighboring countries. We will carry on with negotiations on establishing key bilateral free trade zones with the Republic of Korea and Australia and on entering into regional comprehensive economic partnerships.

2. Strive to expand domestic demand

We will fully tap domestic consumption potential. Total retail sales of consumer goods are expected to grow by 14.5% in 2014.

1) Enhancing people's ability to consume. We will properly adjust the distribution of national income, act promptly to formulate rules for deepening reform of the income distribution system, and strive to increase both urban and rural incomes, especially the income of low-income groups.

2) Energetically cultivating and developing new areas of intense consumption. We will implement China' s broadband strategy, support efforts to build 4G mobile communications networks and develop 4G businesses, and advance the delivery of telecommunications, radio and television, and Internet access over a single broadband connection. We will promote the development of e-commerce demonstration cities, expand the use of the Internet of Things, and stimulate information consumption. We will continue with the project to promote energy-efficient products beneficial to the people, and boost consumption of products which are energy efficient and environmentally friendly and which can be recycled. We will support nongovernmental initiatives to establish facilities providing services for the elderly and health services and vigorously boost consumption in these two areas. We will formulate guidelines on integrating the development of cultural creation and design services with that of relevant industries as well as on promoting tourism consumption, better enforce paid vacations, and promote sound development of consumption in cultural activities, tourism and sports.

3) Improving the consumption environment. We will strengthen both urban and rural circulation networks, accelerate the development of joint distribution channels in cities and delivery services in rural areas, and coordinate development of express delivery services and online retailing. We will put in place viable systems to supervise and control food and drugs as strictly as possible, carry out food safety programs, and give high priority to comprehensively improving food safety in key industries such as that of infant formula and meat products. We will improve and maintain market order and crack down on the production and sale of counterfeit and shoddy goods, price fraud, and other illegal behavior in accordance with the law. We will establish a sound social credit system and ensure that credibility information is commonly built and shared.

We will promote stable growth and structural improvement of investment. Total fixed-asset investment is projected to grow by 17.5% in 2014, 457.6 billion yuan of which will be allocated from the central budget.

1) Unleashing the potential of private investment. We will earnestly implement the Guidelines on Encouraging and Guiding the Sound Development of Private Investment. We will act promptly to review and revise administrative regulations, department regulations and normative documents on private investment; and work out market access rules that are clear and transparent, fair and equitable, and practicable. We will soon recommend a number of projects in banking, petroleum, electricity, railway, telecommunications, resources exploitation and public utilities which fall within our industry guidance and which are beneficial to industrial transformation and upgrading to guide and drive private investment.

2) Improving the structure of government investment. We will soon phase out investment in general competitive businesses in a progressive manner, properly reduce investment in for-profit infrastructural projects that can be funded by nongovernmental capital, reduce small, scattered investments, and halt funding for construction of Party and government office buildings and other facilities to free up resources for major projects that are of overall, fundamental and strategic importance. Investment from the central government budget will mainly go toward building of government-subsidized housing and its supporting infrastructure as well as rebuilding of rundown areas; the project to increase national grain production capacity by 50 million metric tons and improve rural livelihood; development of irrigation works, railways in the central and western regions and other major infrastructure; energy conservation, emissions reduction and environmental improvement; innovation and industrial upgrading projects such as those to develop and utilize major, core and key technologies; social programs and social management efforts such as education, medical care, old-age services, and food and drug safety; and development of ethnic minority and border areas.

3) Accomplishing major projects. On the basis of our intermediate assessment of the implementation of the Twelfth Five-Year Plan (2011-2015), we will move faster in carrying out the key tasks set forth in it and make steady progress in ongoing projects. We will work vigorously to prepare well for implementation of projects and build up reserve of major projects.

3. Promote steady agricultural growth

1) Steadily developing main agricultural products. We will more quickly implement the plan to increase China' s grain production capacity by 50 million metric tons, and build up regional and large-scale commercial grain production centers in contiguous areas. We will speed up innovation in and promotion of agricultural science and technology and increase yield per unit area. We will quicken the development of modern seed industry and agriculture mechanization. We will support Xinjiang in its efforts to become a quality cotton-producing center. We will continue to implement the national plan for developing the vegetable industry, and standardize large-scale breeding operations of hogs, dairy cattle, beef cattle and sheep raised for meat. We will strengthen prevention and control of animal epidemics. We will support the development of fishery administration and the building of fishing ports as well as the renovation of sea fishing boats. We will continue to build a system for inspecting and testing the quality and safety of agricultural products. Total grain output is projected to top 550 million metric tons in 2014.

2) Improving and strengthening the systems to support and protect agriculture. Investment from the central government budget will continue to favor agriculture, rural areas and farmers. The minimum purchase prices of wheat and rice will be raised by 6 yuan and 3.7 yuan per 50 kilograms, respectively. We will continue to implement the system of purchasing and stockpiling corn, canola seeds and sugar on an ad hoc basis. We will launch trials of guaranteed base prices for soybeans produced in northeast China and Inner Mongolia and cotton in Xinjiang. We will scale up funds for agricultural subsidies, and devote more of the added subsidy to the production of grain and other important agricultural products, new types of agricultural businesses, and major agricultural regions. Where conditions allow, we will carry out trial subsidy programs based on the actual area sown to grain or grain output, and use subsidies in a more precise and targeted way. We will improve the policy-based agricultural insurance system. We will increase rewards and subsidies to main commercial grain-producing provinces and major counties that produce grain, edible oil or pigs, support beef and mutton production, and improve the mechanism for subsidizing major grain-producing areas.

3) Strengthening agricultural and rural infrastructure development. We will implement the national master plan for building high-grade farmland, and strengthen construction of major water conservancy projects to protect key water sources, divert water, and develop large irrigated areas. We will harness rivers and reinforce reservoirs and sluices of theirs in disrepair, and build up the system for resisting floods, combating drought, and preventing and mitigating other disasters. We will formulate a general plan to control serious agricultural environmental pollution, intensify the treatment of heavy metal pollution in farmland and severe over-abstractions of groundwater, and work harder to prevent and control pollution from non-point agricultural sources. We will make drinking water safe in more rural areas, upgrade and renovate rural power grids, and build roads in counties, townships and villages. We will improve and develop biogas, rebuild rundown houses, and speed up telecommunications infrastructure development in the countryside.

4. Work hard to steadily carry out a new type of urbanization

In 2014, 54.6% of China' s total population will be permanent urban residents, and 37.1%, urban residents with household registration. (more)

1) Granting urban residency to rural people who have moved to cities in an orderly manner. We will holistically develop support policies concerning household registration, land, capital, housing and basic public services and grant urban residency in an orderly way to permanent urban residents who are able to have stable jobs and live in urban areas. We will work out measures to narrow disparity within cities. We will promote the equalization of basic public services in urban and rural areas.

2) Improving the structure and form of urbanization. The state will formulate and implement a plan for developing major city clusters, while localities will work out and implement plans for a new type of urbanization in light of the conditions of their respective regions, in order to develop cities of all sizes and small towns in a coordinated manner. We will develop new cities and districts in accordance with rules and procedures.

3) Making the development of cities more sustainable. We will get industries and employment to better sustain the development of cities, and provide better urban utilities and public service facilities to sustain greater population concentrations and provide better services.

4) Improving the institutions and mechanisms of urbanization. To foster an institutional environment conducive to the sound development of urbanization more quickly, we will carry out trial programs of different types in different regions and at different levels to establish a number of systems and mechanisms. These include a mechanism for sharing the costs of granting urban residency to rural people who have moved to cities and a diversified investment and financing mechanism for urban development.

5. Strengthen price regulation and controls

1) Guaranteeing supplies. We will properly manage the scale, timing and pace of purchasing, stockpiling and selling grains, edible oils, cotton, sugar, pork and chemical fertilizers. We will implement well the reserve system for winter and spring vegetables in major northern cities. We will speed up the building of storage and logistic infrastructure for grains, cotton and other staple agricultural products, vigorously develop cold chain logistics for agricultural products, and promote the renovation and upgrading of wholesale agricultural product markets. We will fully implement the system of provincial governors assuming responsibility for the "rice bag" (grain supply) and city mayors for the "vegetable basket" (non-staple food supply).

2) Improving the price control mechanism. We will earnestly implement the contingency plan for controlling the prices of hogs and continue with trial programs of policy-based insurance for these prices. We will scale up the trial program of policy-based insurance for the prices of basic vegetables, and establish a long-term mechanism to keep vegetable prices stable. We will consolidate and improve the system of price adjustment funds. We will build a price index system for main commodities and services.

3) Strengthening price regulation. We will inspect prices and charges in education, medical care, banking and other sectors. We will clear up and abolish charges that violate regulations. We will work harder to rid monopoly pricing.

4) Improving the mechanism coupling subsidies with prices. We will improve and activate in a timely manner the mechanism to increase social assistance and social security benefits when prices rise to alleviate the impact higher prices have on those in need.

6. Improve and upgrade the industrial structure

1) Adjusting and improving the distribution of key industries. We will issue guidelines on adjusting the distribution of and relocating key industries, improve the industrial distribution in coastal, border and inland areas, and relocate high-polluting enterprises in cities to minimize their environmental impact. We will promote clustering and intensive development of industries and advance the transformation and upgrading of industrial parks and clusters.

2) Working hard to address the serious problem of overcapacity. We will firmly prohibit the addition of production capacity that breaches regulations, and make optimal use of existing production capacity by various means. We will step up the establishment and improvement of a permanent, market-based mechanism to address the serious problem of overcapacity. We will raise and strictly implement industry entry standards concerning energy consumption, environmental protection and workplace safety and abolish preferential policies to phase out outdated production capacity more quickly. We will implement a tiered electricity pricing policy for industries, such as those that produce electrolytic aluminum and cement.

3) Fully implementing the strategy of innovation-driven development. We project R&D spending to account for 2.17% of GDP in 2014. We will accelerate reform of the science and technology management system. We will increase government spending on basic research and research on cutting-edge technologies, technologies for the public good and key standard technologies. We will move faster to carry out major national scientific and technological projects and apply their advances to production. We will improve the policy that encourages national innovation demonstration zones to play their path-finding role. We will apply wide-reaching policies to encourage business innovation and start to create 100 innovative businesses. We will build up key scientific and technological infrastructure and advance knowledge innovation projects, and build a number of national engineering centers and laboratories for next-generation information technology, environmental protection and other key industries. We will vigorously develop strategic emerging industries. We will set forth policies and plans supporting development of cloud computing and civil space infrastructure, organize the implementation of innovation development and application demonstration projects in key industries, and promote industrial application of the Beidou Navigation Satellite System and other technologies developed by China. We will fully implement the venture capital plan for emerging industries, and integrate resources to set up pilot funds for investment in emerging industries in China. We will accelerate the growth of integrated circuits, the next-generation Internet, the mobile Internet, and the Internet of Things; strengthen the country's infrastructure for broadband and Internet security; build smart cities; and fully implement information technology projects beneficial to the people.

4) Strengthening basic industries. We will build railways, especially in the central and western regions, and guide urban rail transport to develop in an orderly way. We will move faster to extend incomplete national expressways, complete bottleneck sections of national highways, and build rural roads in contiguous areas with acute difficulties. We will speed up the building of high-grade waterways along the Yangtze and other rivers, upgrade the distribution of coastal ports, and promote the orderly development of civil aviation infrastructure. We will reasonably control total energy consumption, improve the energy mix, and encourage the development of wind and solar power, and start construction of a number of hydropower and nuclear power projects. We will strengthen exploration, exploitation and utilization of natural gas, coal seam gas and shale gas.

5) Accelerating the growth of the service industry. We will issue guidelines on speeding up the development of producer services to promote the adjustment and upgrading of the industrial structure. We will continue to carry out national trials for comprehensively reforming the service trade and establish demonstration zones for developing service businesses. We will vigorously develop key industries such as R&D, modern logistics, financial leasing, energy conservation and environmental protection services, and inspection and testing services. We will put forward a mid-to-long-term development plan for the logistics industry, and build demonstration logistics parks. The value-added of the service sector is expected to grow by 8.3% in 2014.

7. Ensure the development of each region has its own features and coordinates with the development of others

1) Continuing to fully implement the overall strategy for developing different regions. We will step up the formulation of a policy document that prioritizes the large-scale development of the western region, further strengthen infrastructure development, vigorously develop industries that can take advantage of local strengths, and launch a new round of efforts aimed at returning even more marginal farmland to forests and grazing land to grassland. We will issue guidelines on fully revitalizing the Northeast and other old industrial bases. We will holistically upgrade and renovate old industrial bases across the country and old industrial districts in cities, and transform and develop resource-dependent cities and independent industrial and mining areas. We will fully carry out the strategy to promote the rise of the central region; make the region an integrated transport hub and a center for producing grain, energy and raw materials and developing modern equipment manufacturing and new- and high-technology industries; and accelerate development of demonstration zones for industries relocated from the eastern region and industrial parks in the central and western regions. We will encourage the eastern region to develop first; support the building of major platforms such as Qianhai, Nansha, Hengqin and Pingtan; and continue with pilot programs to develop the marine economy.

2) Developing new economic support zones at a faster pace. We will build new economic support zones along the Yangtze River, promote economic integration in the Yangtze River Delta, deepen cooperation in the pan-Pearl River Delta, and support the integrated development of city clusters along the middle reaches of the Yangtze. We will promote faster growth of the Central Plains Economic Zone, and deepen cooperation between Liaoning, Jilin and Heilongjiang provinces and Inner Mongolia. We will coordinate development in the Beijing-Tianjin-Hebei region, and speed up the transformation and upgrading of the Bohai Sea region. We will encourage Yunnan and Guangxi to open to South Asia and Southeast Asia, and support northwestern China in westward opening up.

3) Making underdeveloped regions better able to develop. We will support the leapfrogging of Tibet and Xinjiang, and Tibetan ethnic areas in the provinces of Sichuan, Yunnan, Gansu and Qinghai. We will implement policies and programs supporting the revitalization of old revolutionary base areas, continue to implement the plan to help the poor by providing work-relief and relocating those in poverty-stricken areas, support the development of contiguous areas with acute difficulties, and give more pairing assistance to underdeveloped localities. This year, we will lift more than ten million people out of poverty.

4) Speeding up implementation of the functional zoning system. We will improve fiscal, investment, industrial, land, environmental and other support policies and the evaluation system for functional zoning. We will urge provincial-level administrative areas to issue and implement their functional zoning plans. We will launch functional zoning demonstrations.

8. Effectively promote ecological advancement

1) Intensifying institutional guarantees. We will introduce guidelines on speeding up ecological advancement and a policy document on better responding to climate change. We will carry out demonstrations for promoting ecological advancement. We will establish a sound mechanism for compensating for ecological damage. We will improve the system under which polluters pay for the pollution they cause and mineral exploiters compensate for their exploitation of mineral resources, and the system for holding responsible parties accountable for environmental damage and having them compensate for the damage they cause. We will enforce ecological red lines and an environmental credibility assessment system for enterprises.

2) Working hard to conserve energy and reduce emissions. We will intensify the responsibility and accountability system for meeting energy conservation and emissions reduction targets, and conduct assessments to control energy consumption and intensity. We will carry out key projects for conserving energy and reducing emissions; intensify efforts to conserve energy, reduce emissions, and enhance oversight in key areas such as industry, construction, transportation, and public institutions; launch an intensive campaign to get more than 10,000 enterprises to save energy and lower carbon emissions; and move faster to establish an online system to monitor energy consumption by major energy consumers. We will start implementing the top-runner system for energy efficiency and forcibly impose green building standards on the construction of buildings for public welfare and public buildings of 20,000 square meters or more. We will implement guidelines on accelerating development of the energy conservation and environmental protection industries. We will push forward the special science and technology action for energy conservation and emissions reduction. We will continue to get everyone to save energy and reduce emissions.

3) Energetically developing the circular economy. We will implement the Strategy and Near-term Action Plan for Developing the Circular Economy. We will build circular economy demonstration cities and counties, upgrade industrial parks to make their operations more circular, and more quickly make the recycling of renewable resources an industry. We will proceed with the trials of developing national demonstration centers for recovering mineral resources from urban waste and of recovering resources from kitchen waste and handling it safely, implement the project to develop the second group of 100 demonstration centers and 100 key enterprises that make comprehensive use of resources, and comprehensively utilize crop stalks in major areas that produce grain or cotton. We will bring order to mining and make it green. We will carry out pilot projects and demonstrations for seawater desalination.

4) Striving to improve the environment and ecosystem. We will intensify the implementation of the Action Plan for Preventing and Controlling Air Pollution, start by reducing PM10 and PM2.5 emissions, and strengthen coordination of air pollution prevention and control efforts with the focus on the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta. We will improve economic policies for upgrading refineries and refurbishing coal furnaces to ensure that flue gas is desulfurized, denitrified and dust free. We will continue to comprehensively improve the water environment in key water basins and areas, and formulate and implement a clean water action plan. We will strengthen control of soil pollution. We will speed up the development of urban sewage and garbage treatment facilities. We will protect and develop forest and grassland resources, and work to comprehensively control the sources of dust storms affecting Beijing and Tianjin, prevent karst areas from becoming stony deserts and improve the ecology of the Loess Plateau, the Qinghai-Tibet Plateau and other major regions. We will comprehensively practice cleaner production.

5) Responding to climate change by all possible means. We will thoroughly carry out pilot programs and demonstrations to encourage low carbon growth in provinces, regions, cities, industrial parks, and communities. We will research ways to establish a national market for the trading of carbon emission rights and a statistical accounting system for greenhouse gas emissions, and become better able to respond to climate change. We will implement the national strategy for adjusting to climate change. We will take a constructive part in international negotiations on climate change and continue to engage in international exchanges and pragmatic cooperation on responding to climate change.

9. Ensure and improve people's wellbeing

1) Implementing a more active employment policy. We will improve tax policies that support employment, implement all policies aimed at helping college graduates find jobs or start their own businesses, and provide good employment services to unemployed graduates. We will give stronger support for those experiencing employment difficulties, and work to reemploy those who lost their jobs due to the phasing-out of excess production capacity. We will strengthen vocational skills training and public employment services for rural migrant workers. We will become better able to provide community employment services.

2) Holistically developing the social security systems for both urban and rural residents. We will establish a unified basic old-age insurance system for rural and non-working urban residents, and raise the basic pensions for enterprise retirees. We will accelerate integration of the basic medical insurance systems for rural and non-working urban residents, increase medical insurance benefits, promote major disease insurance for rural and non-working urban residents, and make it possible for on-the-spot settlement of medical expenses wherever they are incurred. We will improve the subsistence allowance system for both urban and rural residents, and comprehensively establish a temporary assistance system. We will become better able to provide public services related to social security.

3) Developing social programs more quickly. We will promote the balanced development of compulsory education; improve the basic operating conditions of poorly built and run schools providing compulsory education in poor areas; give the children of rural migrant workers in cities the same access to education as local urban children; and continue to raise the proportion of rural students enrolled in key institutions of higher education. We will accelerate the establishment of an employment-oriented modern vocational education system. In 2014, plans call for enrolling 6.98 million undergraduate students and 802,000 graduate students in regular institutions of higher learning, including 632,000 full-time graduate students. We will strengthen the medical and public health services systems in urban and rural areas, improve the mechanism for responding to public health emergencies and preventing and controlling major diseases, and support nongovernmental capital in the running of medical institutions. We will promote the policy of allowing couples to have two children if either parent is an only child, and become better able to provide population and family planning services. We will implement the China Program for the Development of Women and Children and the National Plan for the Development of Children in Poor Areas. We will improve rehabilitation and nursing care facilities for people with disabilities. We will continue to implement cultural projects that benefit the people, quicken development of public cultural undertakings including the press and publishing, radio and television, and literature and art as well as the culture industry, and better preserve and make use of our cultural and natural heritages. We will promote the flourishing of philosophy and the social sciences. We will improve tourism infrastructure and actively develop tourism related to the early history of the CPC. We will improve the public service system for promoting national fitness.

4) Guaranteeing adequate housing and regulating the real estate market to a suitable degree. We will adhere to the principle of providing tailor-made guidance, progressing step by step and holding each level of government responsible for their decisions, and quickly solve the housing problem for people in the low-to-middle income levels. We will continue to construct government-subsidized housing in cities and towns; renovate rundown urban areas and rural homes; increase support for building supporting infrastructure; combine the operations of the parallel systems of low-priced rental housing and public rental housing into one; and strengthen the follow-up management of distribution and operational maintenance. We will implement policies for regulating the real estate market, and promote the establishment of a permanent mechanism for the healthy development of the real estate market.

5) Making innovations in social governance and public services. We will reorganize community public service resources; improve the platform for managing comprehensive community services; and promote the government's open and transparent procurement of social services. We will resolutely correct all actions harmful to people's interests.

We will continue to implement the Closer Economic Partnership Arrangement between the mainland and Hong Kong and Macao, and accelerate the liberalization of trade in services with the two regions. We will implement the central leadership's policies and measures for supporting Hong Kong's economic development and strengthening economic cooperation with Hong Kong to boost economic development and improve people's wellbeing in Hong Kong. We will support Macao in becoming a world center of tourism and leisure and in using the development of Hengqin as a pivot to diversify its economy. We will promote the institutionalization of the economic relations between the two sides of the Taiwan Straits, quickly complete the follow-up talks on the Economic Cooperation Framework Agreement across the Straits, and improve the level of economic, trade and industrial cooperation between the mainland and Taiwan.

Fellow Deputies,

Accomplishing all the work for economic and social development in 2014 is an arduous task and a great responsibility. We will unite even closer around the CPC Central Committee with Comrade Xi Jinping as General Secretary, hold high the great banner of socialism with Chinese characteristics, take Deng Xiaoping Theory, the important thought of Three Represents and the Scientific Outlook on Development as our guide, willingly accept the oversight of the NPC, and seek comments and suggestions from the CPPCC National Committee with an open mind. We will fortify our confidence, bestir ourselves, blaze new trails with a pioneering spirit, and surmount difficulties as we promote sustainable, sound economic development and social harmony and stability.