REPORT ON THE IMPLEMENTATION OF THE 2010 PLAN FOR

NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT

AND ON THE 2011 DRAFT PLAN FOR NATIONAL
ECONONUCANDSOCIALDEVELOPMENT

Fourth Session ofthe Eleventh National People s Congress

March 5,2011

National Development and Reform Commission

The final version of this report in Chinese will be approved at this session and
released by Xinhua News Agency.
Fellow Deputies,
The National Development and Reform Commission has been entrusted by
the State Council to report on the implementation of the 2010 plan and on the
2011 draft plan for national economic and social development for your
deliberation and approval at the Fourth Session of the Eleventh National
People's Congress (NPC), and also for comments and suggestions from the
members of the National Committee of the Chinese People's Political
Consultative Conference (CPPCC).

I. Implementation of the 2010 Plan for

National Economic and Social Development

Last year, the environment for China's economic and social development
was extremely complex, and there were various extremely severe natural
disasters and major challenges. Under the firm leadership of the Communist
Party of China (CPC), the people of all our ethnic groups thoroughly applied the
Scientific Outlook on Development. Based on the plan for national economic
and social development adopted at the Third Session of the Eleventh NPC, we
steadfastly implemented the package plan for responding to the global financial
crisis, accelerated the transformation of the pattern of economic development,
and consolidated the good momentum in economic and social development.
Overall, the plan for 20 I 0 was implemented well, and the main objectives and
tasks set forth in the Eleventh Five-Year Plan were successfully accomplished.
1. Steady and rapid economic growth was maintained
Economic performance was generally stable, with significant improvement
in quality and efficiency. GDP for the year was 39.8 trillion yuan, an increase of
10.3%, and 2.3 percentage points higher than the target. Primary, secondary and
tertiary industries grew by 4.3%, 12.2% and 9.5% respectively, and 0.3, 4 and
0.8 percentage points higher than targeted figures. Value-added of industry
amounted to 16 trillion yuan, up 12.1% and 4.1 percentage points higher than
the target. By strengthening regulation and overall coordination of supplies of
coal, electricity, oil, gas and transport, we were able to meet all the demands of
economic and social development and people's lives, demands from
disaster-stricken areas and major events, and demands placed on us at crucial
times. National revenue for 2010 was 8.3 trillion yuan, an increase of 21.3%.
The deficit was 50 billion yuan less than the budgeted amount. The broad
money supply (M2) increased by 19.7% and RMB loans totaling 7.95 trillion
yuan were granted in 2010. The performance of enterprises continued to
improve, and the profits of large industrial enterprises reached 3.88 trillion yuan
in January through November, a year-on-year increase of 49.4%.

Figure 1
GDP Growth in the Eleventh Five-Year Plan Period

Percent
16 r
14.2
14
11.9
12
9.6
10
9.6 9.8
8 9.2

o --~--~---~-~-~--~-
LI

2006 2007 2008 2009 Q12010 Q22010 Q32010 Q4 2010

Domestic demand continued to expand, and the driving forces of economic

growth became increasingly coordinated. Policies to stimulate consumer
spending achieved positive results and the country's consumption potential was
further unleashed. Retail sales of consumer goods totaled 15.6998 trillion yuan,
a year-on-year increase of 18.3%, and 3.3 percentage points higher than the
target. A total of 77.18 million home appliances, an increase of 130%, were sold
through the national program for subsidizing rural residents' purchase of home
appliances. A total of 18.06 million motor vehicles were sold, an increase of
32.4%. Appropriate growth was maintained in investment and the investment
structure was further improved. Fixed-asset investment across the country
amounted to 27.814 trillion yuan, up 23.8% from the previous year and
exceeding the target figure by 3.8 percentage points. The plan to increase
investment by four trillion yuan over two years was successfully completed.
Guidelines on encouraging and guiding the sound development of
nongovernmental investment were issued and implemented, which injected new
vitality into investment from nongovernmental sources. In 2010,
nongovernmental investment accounted for 51.1 % of total fixed-asset
investment in urban areas, 3 percentage points higher than the previous year.
Consumption contributed 3.9 percentage points to economic growth, investment

2
contributed 5.6 percentage points, and net exports contributed 0.8 percentage
points.

Figure 2
Public Investment from the Central Government
from the Fourth Quarter of 2008 to 2010

Post-Wenchuan
earthquake recovery and
reconstruction (14.8%) Low-income housing, projects
to improve the wellbeing of
rural residents, and social
programs (43.7%)

Major infrastructure
projects (23.6%)

Independent irmovation,
economic restructuring, energy
conservation and emissions
reduction, and ecological
improvement (15.3%)

Overall price levels remained basically stable and markets were further
standardized. We implemented a number of measures to keep prices stable and
improve people's lives. We did a good job of stockpiling and releasing grain,
cotton, meat, sugar and other important commodities; increased the varieties of
fresh and live agricultural products that qualify for the toll-free policy and
extended the policy to all toll roads; improved the mechanism to adjust living
allowances for the poor in step with price changes, and therefore reduced the
impact of price rises on their lives; suspended or eliminated some charges and
fees, reduced the levels of others and lowered drug prices, thereby easing the
burden on enterprises and the people; and organized and launched campaigus to
rectify uureasonable charges and fees related to enterprises, electricity rates and
prices of agricultural products, and to crack down on violations of intellectual
property rights and on the production and sale of counterfeit or substandard
goods in order to create a well-ordered pricing and market environment. Overall,
annual CPI rose 3.3%, meaning the target for price control was basically
achieved.

3
 2. The agricultural foundation was consolidated
Production of grain and other major agricultural products increased steadily.
Despite severe droughts, low temperatures, scant sunlight, and serious floods in
various areas, annual national grain output totaled 546.41 million tons, an
increase of 15.59 million tons, up 2.9% from the previous year, and rising for
.,the seventh consecutive year. Oilseed output was 32.39 million tons, up 2.7%.
Livestock production was generally stable, the output of meat totaled 79.25
million tons, up 3.6%, and the output of aquatic products was 53.66 million tons,
up 4.9%. Due to bad climatic conditions in some areas as well as reduced
acreage, the output of cotton was 5.97 million tons, down 6.3%, and the output
of sugar crops was 120.45 million tons, down 1.9%.

Figure 3
Increases in Grain Output over Seven Consecutive Years

Millions of tons
560 546.41

540 528.709

2009 2010

We effectively implemented policies to strengthen agriculture and benefit

farmers. Annual central government spending on agriculture, rural areas and
farmers totaled 857.97 billion yuan, up 18.3% from the previous year. This
included 192.8 billion yuan of central budgetary investment used in agriculture
and rural areas, making up 49% of the total central budgetary investment. We
further intensified our efforts to protect fannland, improved over 1.3 million
hectares of rural land, and more than 300,000 hectares ofland was cultivated for
the first time, We fully implemented the plan to increase China's grain
production capacity by 50 million tons, and intensified development of cotton,
4
edible oil and sugar production bases as well as work on the crop protection
project, the animal epidemic prevention system and the project to cultivate
superior varieties and breeds. We formulated and carried out policies to
intensify the construction of small and medium-sized water conservancy
facilities, promote agricultural mechanization and ensure the production and
supply of vegetables. We completed all tasks included in the plan of reinforcing
reservoirs and started implementing the second round of projects to reinforce
dilapidated small reservoirs. We supported the construction of distribution
infrastructure such as wholesale markets for agricultural products, grain and
edible oils storage facilities, and cold-chain logistics for agricultural products.
Compared with 2009, the average minimum purchase prices for wheat and rice
increased by 3 yuan and 6 yuan per 50 kilograms respectively; we successfully
implemented a policy for temporarily purchasing and stockpiling soybeans and
canola seeds; and there were sufficient supplies of chemical fertilizers. The four
kinds of subsidies to grain growers amounted to 122.6 billion yuan.

Figure 4
Central Government Investment in Agriculture, Rural Areas and Farmers
in the Eleventh Five-Year Plan Period
l3illions ofynan
1.000
900
r 857.97
800 .

700
600 .
500
I
400
300
200
100
o
2006 2007 2008 2009 2010
10 Central government investment in agriculture. o Increase over
rural areas and farmers previous year

Rural working and living conditions continued to improve. In 2010, we

provided safe drinking water to an additional 61.86 million rural residents and
to teachers and students at rural schools, making safe drinking water available to
71.3% of the rural population. An additional 300,000 kilometers of electric
power lines were installed in the countryside. Altogether, 96% of towns and

5
townships and 81% of villages are now connected to asphalt roads. We
supported the construction of 1,343 large and medium-sized methane projects,
providing methane to another 5 million households nationwide. We renovated
dilapidated houses for 1.2 million rural households, thereby m.eeting the planned
target. Another 100,000 stores were set up in the countryside under the project
to get retailers to open stores in more townships and villages, and a rural
network of chain stores began to take shape.

Figure 5
Iucreases in Population Who Benefited from the Safe Drinking Water Project
in the Eleventh Five-Year Plan Period

Millions
70
60.69 61.86
~
60

50

40
I 31.45 32.53
28.97 r-'--
~

30

20

10
.

o
2006 2007 2008 2009 2010

3. Economic restructuring was carried out vigor01!sly.

China's capacity for independent innovation increased. Good progress was
made in implementing 16 key state science and technology programs together·
with the March 1997 Program for Basic Research, the March 1986 High-Tech
Program and the National Key Technology R&D Program. Construction on the
Shanghai Synchrotron Radiation Facility, the National Center for Nanoscience
and Technology and other major science projects was completed and passed
acceptance inspection. The third phase of the Knowledge Innovation Program in
the Chinese Academy of Sciences was basically completed. Smooth progress
was made in carrying out major projects such as building 50 national
engineering centers, 32 national engineering laboratories and 56 key national
laboratories seated in enterprises in areas such as digital television and

6
 next-generation Internet, as well as manufacturing advanced-generation LCD
panels, large-scale integrated circuits and regional aircraft, Further progress was
made in the development of large aircraft. An additional 93 enterprise
technology centers received state recognition, 550 enterprises were now
included in the national pilot program to support innovative enterprises, and the
national pilot projects for innovation-oriented cities were carried out in 45 cities.
The calculating speed of the high performance Tianhe-l supercomputer, which
was developed independently, is ranked fIrst in the world.
High-tech industries developed more quickly. The value-added of the
high-tech manufacturing industry for the year rose 16.6%, up 8.9 percentage
points from the previous year. The output of major high-tech products increased
considerably, with output of integrated circuits growing by 57.4%, electronic
components by 30.1%, microcomputers by 35% and mobile telecommunication
handsets by 46.4%; and the sales of software came to 1.3 trillion yuan, up 30%.
Trade volume in the technology market exceeded 300 billion yuan. We
promulgated and implemented the Decision on Accelerating the Cultivation and
Development of Strategic Emerging Industries; actively moved forward with
seven projects to apply high technology to production, including the project to
promote modern practices in traditional Chinese medicine; built 18 national
high-tech industrial bases; and set up 13 venture capital funds.
Fresh progress was made in industrial restructuring. We continued to
implement the plan for restructuring and invigorating key industries, allocated a
fund of 20 billion yuan for invigorating such industries and upgrading their
technologies, and supported 5,051 technological upgrading projects. The
relocation of the Shougang Group was completed smoothly, and substantive
progress was made in reorganizing the Angang Steel Company Ltd. and the
Pangang Group Company Ltd. We promulgated and implemented guidelines on
accelerating the restructuring of the pharmaceutical industry. We completed all
tasks of closing down backward production facilities. We shut down such
facilities at thermal power plants with a total capacity of 12.1 million kilowatts,
2.1 million kilowatts more than planned; steel mills of 9.31 million tons, 3.31
million tons more than plarmed; iron foundries of 40 million tons, 15 million
tons more than plarmed; cement plants of 116.19 million tons, 66.19 million
tons more than plarmed; plate glass plants of 552,500 tons, 252,500 tons more
than plarmed; and paper mills of 4.72 million tons, 4.19 million tons more than
plarmed.
The service sector developed steadily. We launched trials of comprehensive
reforms in the service sector, used funds for guiding development of the service
sector to help accelerate the development of key areas and weak links of the

7
 sector, and promulgated and implemented guidelines on promoting development
of the energy conservation service industry. In 2010, the service sector
constituted 34.8% of the country's employtlJ.ent, and the value-added of the
sector accoUlJ.ted for 43% ofGDP.

Figure 6
Value-added ofthe Service Sector in the Eleventh Five-Year Plan Period
Billions of yuan Percent
18,000 17,1005 50

16,000 14,803.8
14,000 r 13,134 40

12,000 11,135.19
1-
30
10,000 8,855.49
8,000
20
6,000 12
............. 9.6 9.5
4,000 14.1 ""'" 10
10.4
2,000

o ~ ~
o
2006 2007 2008 2009 2010
D Value-added of the service sector ..... Real growth rate
Infrastructure and basic industries became better able to meet demands
made on them. Nationwide, 4,986 kilometers of railway lines were put into
operation, raising the total to 91,000; 120,000 kilometers of highways were
opened to traffic, raising the total to 3.98 million; 500 kilometers of high-grade
inland waterways were opened to navigation, raising the total to 10,000; 125
deepwater seaport berths were put into service, raising the total to 1,774; and 9
new civilian airports were Pllt into service, raising the total to 175. Some 1.66
million kilometers of optical cables were installed, raising the total to 9.95
million kilometers; and 49.24 million broadband Internet access ports were
opened up, raising the total to 188 million. We intensified the construction of
key energy projects, energy bases, and storage and transportation facilities.
Eleven out of 13 large coalmining bases have already reached a production
capacity of 100 million tons. A number of clean-energy projects were completed
and put into operation; construction of the second phase of the state petroleum
reserves project was accelerated; and total power transmission capacity of the

8
 northern, central and southern routes of the project to send electricity from the
west to the east exceeded 78 million kilowatts. The annual output of raw coal
was 3.24 billion tons, up 8.9%; crude oil output was 203 million tons, up 7.1 %;
natural gas output reached 96.76 billion cubic meters, up 13.5%; and electricity
generation totaled 4.2065 trillion kilowatt-hours, up 13.2%.
Regional development became better balanced. We deepened the
implementation of the overall strategy for regional development, and
promulgated and implemented the national plan for development priority zones.
We smoothly introduced the guidelines on thoroughly implementing the
strategy for large-scale development of the western region; promulgated and
implemented the guidelines on promoting leapfrog development and long-term
stability of Tibet and Xinjiang as well as on accelerating the development of
Tibetan ethnic areas in Sichnan, Yunnan, Gansu and Qinghai; and approved the
establishment of the Liangjiang New Area in Chongqing. Construction began on
another 23 major projects for the large-scale development of the western region,
with total investment reaching 682.2 billion ynan.
We increased support for optimizing and upgrading the industrial structure
and developing modem service industries in northeast China, formulated the
guidelines on supporting the region in developing modem agriculture, and
further improved the policy framework for sustainable development of
resource-dependant cities.
We fully implemented the plan to energize the development of the central
region, accelerated the development of three different types of production bases
and a system of integrated transportation hubs in the region, and introduced the
guidelines on promoting the development of city clusters in the central region as
well as the plan to establish demonStration zones for relocating industries to the
central region in the city cluster along the Yangtze River in Anhui. The Wuhan
m.etropolitan area; the Changsha-Zhuzhou-Xiangtan city cluster; city clusters in
the central plains; the Poyang Lake Ecological Economic Zone; and the city
cluster around Taiyuan in Shanxi, all played a bigger role in driving the
development of their surrounding areas. Further progress was made in
relocating industries to the central and western regions.
We actively promoted upgrading of the industrial structure and independent
innovation in the eastern region; accelerated reform and opening up in Shenzhen
and other special economic zones, the Pudong New Area in Shanghai and the
Binhai New Area in Tianjin; promulgated and implemented the plan to stimulate
the development of the Yangtze River Delta; and launched the national pilot
program to develop the marine economy.
More support was given to old revolutionary base areas, ethnic minority

9
areas, border areas and poverty-stricken areas. In 2010, the central government
arranged 5.5 billion yuan for investment in work-relief schemes and a fund of 2
billion yuan on the pilot project to relocate people from inhospitable areas as a
poverty relief measure. As a result, 870,000 people were relocated, 11 0,000
more than planned; and over 9.09 million rural residents were lifted out of
poverty, basically reaching the target.
4. Significant progress was made in energy conservation and environmental
protection and in responding to climate change.
We basically met the targets for energy conservation and emissions
reductions. In 2010, investment funds from the central government budget for
this purpose came to 33.3 billion yuan, an increase of 140% over the previous
year; and the central government provided 51.8 billion yuan in special funding
for conserving energy and reducing emissions, up 73%. We actively carried out
the ten major energy conservation projects, capable of generating energy
savings equivalent to 33.1 million tons of standard coal. We worked hard to
implement the project to promote energy-efficient products for the benefit of the
people, and nearly 30 million high-efficiency air-conditioners, over 1 million
energy-efficient motor vehicles, and 160 million energy-saving light bulbs were
put into use. We started to implement the pilot project to demonstrate and
popularize new energy vehicles. We actively developed national demonstration
bases for recovering mineral resources from city waste. We supported the
construction of urban sewage and garbage treatment facilities. For the whole
year, daily urban sewage treatment capacity increased by 19 million cubic
meters and daily urban household waste disposal capacity grew by 68,000 tons;
and 76.9% of urban sewage was treated and 72.5% of urban household waste
was safely handled, an increase of 1.6 and 1.2 percentage points year on year
respectively. In 2010, energy consumption per unit of GDP fell 4.01%; sulfur
dioxide emissions and chemical oxygen demand dropped 1.32% and 3.08%
respectively; water consumption per 10,000 yuan of value-added of industry fell
9.6%; and the percentage of industrial solid waste that was comprehensively
utilized rose by 2 percentage points. Over the past five years, energy
consumption per unit of GDP fell 19.06%, sulfur dioxide emissions and
chemical oxygen demand decreased 14.29% and 12.45% respectively, water
consumption per 10,000 yuan of value-added of industry decreased 36.7%, and
the targets set in the Eleventh Five-Year Plan were either basically met or
exceeded.

10
 Figure 7
Energy Consumption per Unit of GDP in the Eleventh Five-Year Plan Period

120

110
00.00
100

90 97.26
92.36
80 87.56
84.32
80.94
70

60

50

40
2005 2006 2007 2008 2009 2010

'Energy consumption per nnit of GDP equals 100 in 2005.

Figure 8
Sulfur Dioxide Emissions and Chemical Oxygen Demand
in the Eleventh Five-Year Plan Period

110

101.55
100
100 97.71
100 100.99
96.81 90.34
90 87.55

86.86 85.71
80

L.- ~ ~ ~ ~ ~

70

-
2005 2006 2007 2008· 2009 2010

Sulfur dioxide emissions --- Chemical oxygen demand

'Levels of SO, emissions and COD both equal 100 in 2005.

II
 New steps were taken in ecological and environmental protection. We
further consolidated progress previously made in returning cultivated land to
forests and grazing land to grasslands; completed the first phase of the project to
protect virgin forests; completely stopped commercial logging in natural forests
in the upper reaches of the Yangtze River and the middle and upper reaches of
the Yellow River; and protected and restored biodiversity. In 2010, an additional
5.92 million hectares of land was afforested, 6.667 million hectares of grazing
land was returned to grasslands, and soil erosion on 42,000 square kilometers of
land was brought under control through combined measures nationwide. We
promulgated and implemented a comprehensive national plan for water
resources. We vigorously carried out pollution control in the key watersheds of
the Huai, Hai, Liao and Songhua rivers; the Tai, Chao and Dianchi lakes; the
middle and upper reaches of the Yellow River; the Three Gorges Reservoir area
and its upper reaches; the Bohai Sea; and the Danjiangkou Reservoir area and
its upper reaches. We fully implemented the master plan for the comprehensive
cleanup of the water in the Tai Lake basin.

Figure 9
Area Afforested in the Eleventh Five-Year Plan Period

Millions of hectares
280

275

270

265

260

255

250

245

240

235
2006 2007 2008 2009 2010
Ill[] Total area afforested o Increase over previous year

The work of responding to climate change was further strengthened. We

effectively implemented China's National Climate Change Program, actively
made innovations in low-carbon technology, and smoothly carried out pilot
projects for low-carbon provinces and low-carbon cities. We successfully held

12
 the Tianjin United Nations Climate Change Conference, and actively engaged
and participated in international exchanges andcooperation in all areas.
5. Reform and opening up were further intensified.
New breakthroughs were made in reforming major areas and key links.
In terms of rural reforms, we launched the reform of tenure in collective
forests in an orderly manner and devolved the tenure of more than 80% of the
country's collective forests to rural households, and made steady progress in the
trial reform of state forestry farms and in restructuring state farms built on
reclaimed land.
In terms of enterprise reforms, the reform to institute a corporate system or
a stockholding system was carried out in over 70% of the central state-owned
enterprises (SOEs) and enterprises subordinate to them, and the pilot project for
standardizing boards of directors was extended to 32 central SOEs. We made
further progress in reforming the power industry, postal services and public
utilities. We also promulgated and implemented a number of supporting policies
to promote the development of the non-public sector and small and
medium-sized enterprises.
In terms of reforming the fiscal and taxation systems, we implemented the
reform to place county finances directly under the management of provincial
governments in 970 counties across 27 provinces; conducted trials in the
western region on the reform of resource taxes on oil and natural gas; and
extended the urban construction and maintenance tax and education surcharge to
foreign enterprises and nationals.
In terms of reforming the financial system, steady progress was made in
reforming the China Development Bank, policy-based financial institutions and
asset management companies; the Agricultural Bank of China was listed
successfully; stock index futures were launched; corporate bonds developed
steadily; the reform of the RMB exchange rate regime continued; and the RMB
was used more widely in cross-border trade.
In terms of reforming the prices of resource products, we made smooth
progress in trials of publicizing the costs of supplying water in cities and of a
comprehensive price reform of water for agricultural purpose; introduced a
punitive electricity rate on products exceeding limits of energy consumption per
unit of production; and set a unified rate for on-grid electricity generated from
agricultural and forest biomass.
In terms of reforming social programs, we deepened the five key reforms in
the pharmaceutical and healthcare systems; implemented the national system for
basic drugs in 60% of primary-level medical and health care institutions run by
the government; vigorously explored and constantly deepened the reform of

13
 p1,lblic hospitals in 16 state-designated trial cities and 37 province-designated
trial areas; and introduced the guidelines on further encouraging and guiding
nongovernmental capital toward medical institutions. We comprehensively
launched the national pilot program for restructuring the education system, and
thoroughly implemented the performance-based pay reform for compulsory
education schools. We pushed forward with the reform of the cultural
management system in an orderly manner, and basically completed trials on
turning provincial-level state-owned theatre troupes into corporations and the
transformation of for-profit publishing houses into enterprises. Positive results
were made in national pilot projects to carry out integrated, complete reforms.
The development level of the open economy was raised further. We adhered
to the strategies of diversifying markets and competing on quality; tightened
control over exports of resource products and products whose production is
energy-intensive or highly polluting; increased imports of raw materials in short
supply on the domestic market, energy-intensive products, advanced technology,
and key spare parts and components; and eased the trade imbalance. Total
import and export volume reached US$2.97276 trillion in 2010, an increase of
34.7%. Exports rose 31.3%, imports rose 38.7%, and the trade surplus was
down 6.4% from the previous year. We introduced the guidelines on better
utilizing foreign investment and guided foreign investments toward high-end
manufacturing, high-tech industries, modem service industries, new energy
sources, energy conservation and environmental protection industries, and the
central and western regions. Utilized foreign direct investment in 2010
(excluding the banking, securities and insurance sectors) totaled $105.74 billion,
up 17.4%. Disbursed foreign loans reached $20.5 billion, up 57%. We
vigorously implemented the "go global" strategy and made further progress in a
number of major outward investment projects. Non-financial outward direct
investment for the year amounted to $59 billion, an increase of 36.3%. Receipts
from overseas project contracting operations reached $92.2 billion, an increase
ofl8.7%.
6. Efforts to ensure and improve the people s wellbeing were
comprehensively strengthened.
Urban and rural incomes continued to grow. Urban per capita disposable
income and rural per capita net income reached 19,109 ynan and 5,919 ynan
respectively, up 1,934 yuan and 766 ynan, or 7.8% and 10.9% from the previous
year in real terms after adjusting for inflation, and 1.8 and 4.9 percentage points
higher than the target figures. This is the first time since 1998 that rural income
growth has surpassed urban income growth.

14
 Figure 10
Real Growth in Urban and Rural Incomes in the Eleventh Five-Year Plan Period

Percent
14
12.2
12 10.9
9.8
10
8.4
9.5
8
8 8.5
7.8
7.4
6
I
4
I
2 t
i
L ~
0
2006 2007 2008 2009 2010
-e- Urban per capita disposable income
-0- Rural per capita net mcome

Employment grew steadily. We intensified the implementation of a

proactive employment policy. We improved primary-level public service
facilities for employment and social security, and set up 162 county-level and
610 townshipclevel service centers in the central and western regions. Over the
year, 11.68 million urban residents entered the workforce for the first time,
exceeding the target by 2.68 million, and the urban registered unemployment
rate was 4.1 %, which met the target.
The level of social security continued to rise. By the end of 2010, the
number of urban participants in basic pension insurance reached 256.73 million,
16.73 million more than plarmed; and we extended the trials of a new pension
insurance system for rural residents to 24% of the country's counties. The
methods for transferring basic pension accounts for employees of urban
enterprises and transferring basic medical insurance accounts for migrant
workers were implemented smoothly. Basic medical insurance covered 432.06
million urban residents, an increase of 30.59 million over the previous year; and
835 million rural residents, or 96.3% of the rural population, signed up for the
new rural cooperative medical care system, 2.1 percentage points higher than
the previous year. We raised the standards of subsistence allowances for urban
and rural residents, unemployment insurance benefits, the basic pension for
enterprise retirees, subsidies and living allowances to entitled groups, and

15
government aid to students from poor families. Post-disaster recovery and
rebuilding work progressed smoothly, the three-year post-Wenchuan earthquake
recovery and reconstruction tasks were basically completed within two years,
and the recovery and rebuilding work is well underway in Yushu and Zhugqu.
Fignre 11
Participation Rates in the New Rural Cooperative Medical Care System
in the Eleventh Five-Year Plan Period
Millions Percent
900 833 835 100
800
815
...
700
726
~
...- 96.3 95

600
~ 94.2
90
,/"'" 91.5
500
4 1 086.2
// 85
400
<I"""
300 80
80.7
200
75
100
o 70
2006 2007 2008 2009 2010
CJ Number ofparticipants - Participation rate

The development oflow-income housing projects was carried out on a large

scale. The central government further raised subsidies for building low-rent
housing and renovating rural dilapidated houses in the central and western
regions, expedited the development of public rental housing, and included it in
the low-income housing program. In 2010, work was begun to build
low-income housing and renovate run-down areas across the country with a
total of 5.9 million units, surpassing the target by 100,000 units. This figure
consists of 3.22 million units of low-income housing and 2.68 million units of
housing in run-down areas; and throughout 2010 work was basically completed
on 3.7 million units.
Social development was strengthened.
The National Medium- and Long-Term Plan for Education Reform and
Development and the National Medium- and Long-Term Plan for Human
Resources Development were promulgated and implemented. A total of 13.25
million square meters of primary and secondary school buildings were

16
 renovated in rural areas, and construction was completed on 2.12 million square
meters of secondary vocational school buildings. The goals of making nine-year
compulsory education universally available and basically eliminating illiteracy
among young and middle-aged adults were attained for 100% of the target
population in the country. The junior secondary school retention rate reached
94%. The secondary gross enrollment ratio reached 82.5%, up 3.3 percentage
points. The tertiary gross enrollment ratio was 26.5%, with 6.618 million
undergraduate students and 538,000 graduate students enrolled.
Smooth progress was made in developing the medical and health service
system. We supported the construction and renovation of 891 county-level
hospitals, 1,620 central health clinics in towns and townships, 1,228
community-based health service centers and 116 institutions for preventing and
treating mental health problems. The natural population growth rate of about
5%0 met the target, and the national population reached 1.341 billion at the end
of2010.
Steady progress was made in the project to extend radio and television
coverage to all villages, the construction of multipurpose cultural centers in
towns and townships, the Tibet-Xinjiang Project, and the national cultural
information resource sharing project. Work on major cultural projects such as
the National Museum of China and the National Theater Company of China
proceeded smoothly, and the number of public museums, memorial halls, and
patriotic education centers across the country opened to the public free of charge
reached 1,743.
We improved infrastructure at major tourist attractions, and actively worked
to turn Hainan into an international tourist island. Philosophy and the social
sciences, the press and publishing, and literature and art all flourished. The
Shanghai World Expo was a complete success, and a total of 246 countries and
international organizations participated -- more than any other world expo in
history. We successfully hosted the Guangzhou Asian Games and Asian Para
Games. Recreational sports work entered a new stage, and over 230,000 sports
and fitness projects were completed for rural residents. Social welfare programs
developed more rapidly, and the number of beds in social service institutions
reached 3.123 million, up 4.3%.
Despite a complex and volatile economic environment abroad and frequent
natural disasters at home, China's economy maintained steady and rapid
development in 2010, and we further consolidated the momenturn of our
economic turnaround. These achievements did not come easily. They were the
result of the overall planning and firm leadership of the Party Central
Committee and the State Council, as well as the conscientious implementation

17
 of the central leadership's principles and policies, close collaboration and hard
work of all localities and departments. They were also attributable to the
concerted efforts of the people of all our ethnic groups in tackling difficulties
head-on. After five years of efforts, of the 22 major targets for economic and
social development set forth in the Eleventh Five-Year Plan, all eight obligatory
targets were met and we achieved all the other 14 anticipated targets except
three -- the proportion of employment in the service sector, the proportion of
value-added of the service sector contributed to GDP, and the spending on R&D
as a percentage ofGDP.
As we look at these achievements, we must also be keenly aware that there
are still some serious conflicts and problems facing domestic development.
First, the foundation for steady increases in grain production and rural
incomes is not solid. Constraints from insufficient resources including farmland
and fresh water are intensifYing; uncertainties over climate conditions are
increasing; water conservancy infrastructure remains weak; the overall level of
agricultural science and technology is not high; the returns from agriculture
have been comparatively low for a long time; and rural migrant workers still
face institutional obstacles in seeking urban employment.
Second, our tasks for economic restructuring are arduous. Improving our
capacity for independent innovation is constrained by inadequacies in incentive
mechanisms and shortages of core technologies and highly talented people;
haphazard investment and excess production capacity in certain fields is
increasingly evident; eliminating backward production capacity is becoming
more difficult; development of the service sector still lags behind; and
unbalanced and uncoordinated development between urban and rural areas and
between different regions remains a serious problem.
Third, there are strong inflationary pressures. Imported inflationary pressure
is on the rise; there is loose liquidity in the market; hot money speculation is
soaring; and increases in the costs of resources, land, labor and other factors of
prodUc:;tion have become a long-term stimulus to price rises. Last year, about
70% of price rises were due to growth in food prices, adding pressure on the
lives of urban and rural residents, and especially low- and middle-income
families. House prices rise too fast in some large and medium-sized cities, and it
is still very hard for ordinary people to solve their housing problems on the
market.
Fourth, resource and environmental constraints have intensified. Total
energy and resource consumption is too large and is growing tob quickly, and
emissions of major pollutants are high. A petmanent mechanism for saving
energy and reducing emissions has yet to be established, and energy-intensive

18
and highly polluting industries are still growing too fast. Consequently, we face
mounting pressure to save energy, reduce emissions, and respond to climate
change, and great challenges in sustainable development.
Fifth, social problems have increased. Our work on income distribution,
social security, schooling, and medical care still fall considerably short of the
demands of the people. Actions that harm people's interests in such areas as
food and drug safety, land expropriation, housing demolition and resident
relocation, and industrial safety are still occurring.
In addition, world economic recovery is a painstaking and tortuous process,
some countries are saddled with huge debts and persistently high unemployment
rates, global liquidity continues to increase, and international market prices for
major commodities and exchange rates among major currencies remain in
turmoil. All these instabilities and uncertainties have made it even more difficUlt
to do this year's domestic work well.
We need to take all the above problems seriously and adopt effective
measures to solve them.

II. Overall Requirements and Major Objectives for

Economic and Social Developmen.t in 2011

When doing this year's economic and social development work, we must
fully implement the guidelines adopted at the Party's Seventeenth National
Congress and the third, fourth, and fifth sessions of the Seventeenth Central
Committee; take Deng Xiaoping Theory and the important thought of Three
Represents as our guide; and thoroughly apply the Scientific Outlook on
Development. We need to correctly grasp the new changes in and new features
of the domestic and international situations, and take scientific development as
our theme and accelerating the transformation of the pattern of economic
development as our main. thrust. We will adopt a proactive fiscal policy and a
pllldent monetary policy, and make our macro-control more targeted, flexible
and effective. We will carry out economic restructuring more quickly,
vigorously improve independent innovation, genuinely save energy and reduce
emissions, constantly deepen reform and opening up, emphasize ensuring and
improving the wellbeing of the people, consolidate and expand on our successes
in responding to the global financial crisis, maintain steady and rapid economic
development, and promote social harmony and stability.
In view of the above requirements and what is needed versus what is
possible, and in conformity with the Twelfth Five-Year Plan, we have set the
following major objectives for economic and social developmen.t in 2011.

19
 --Maintaining steady economic growth. China's GDP will grow by about
8%. In setting this target, we have mainly taken the following factors into
account. On the one hand, it is necessary to maintain an appropriate pace of
economic growth in order to expand· employment, improve the people's
wellbeing, and consolidate and expand on our achievements in responding to the
global financial crisis. On the other hand, the projected growth rate around 8%
is lower than the actual growth rate last year, and it was chosen mainly to guide
all sides' attention and the focus of their work toward accelerating the
transformation of the pattern of economic development, so we can coordinate
the pace of economic growth with its structure, quality and efficiency;
coordinate economic development with the population, resources and the
environment; and genuinely transform in the course of developing and develop
in the course of transforming. Furthermore, with so many variables in our
external environment, more stringent resource and environmental constraints,
and higher costs of factors of production, it will still require an enormoUS effort
to achieve high quality and efficient growth at a rate of 8%. Moreover, this
growth target is only a guide and indicator of the anticipated growth for the
country as a whole. Local governments should set their growth rates
scientifically in line with their actual conditions and based on necessity and
possibility. They absolutely should not seek rapid growth at all costs or compete
for the fastest rate, still less raise targets at each administrative level.
~-Optimizing the economic structure. We will increase spending on R&D as
a percentage of GDP to 1:85%; make positive progress in fostering strategic
emerging industries and accelerate development of the service sector; achieve
new results in technological upgrading, elimination of backward production
facilities, and SOE mergers and reorganizations; reduce energy consumption per
unit of GDP by 3.5% compared to last year, reduce the intensity of carbon
dioxide emissions by about 3.5%, and cut the four major pollutant indexes --
chemical oxygen demand, total ammonia nitrogen and emissions of sulfur
dioxide and nitrogen oxide -- each by 1.5%; further strengthen ecological and
environmental improvement; and. raise the urbanization level to 48.3%. The
main consideration when proposing this composite target is that accelerating the
transformation of the pattern of economic development is our main thrust now
and for some time to come, and it must be incorporated into the entire process
and every aspect of economic and social development. In order to take firm
steps in the first year of implementing the Twelfth Five-Year I'!an, we must
steadfastly focus· on strategic economic restructuring; further increase
investment in R&D; strive to promote independent innovation; nurture and
develop strategic emerging industries; promote the transformation and

20
 upgrading of traditional industries; intensifY efforts to balance urban and rural
development and development among different regions; actively yet prudently
give impetus to urbanization; strengthen energy conservation, emissions
reduction, and ecological and environmental protection; increase the
contribution science and technology make to economic growth as well as its
quality and efficiency; and make development more coordinated and
sustainable.
--Keeping overall price levels basically stable. The CPI will increase by
about 4%. Currently, aggregate supply and demand in China are basically
balanced and there is an ample supply of most products; in particular, we have
abundant stocks of grain as a result of seven consecutive years of good harvests,
and all this will help to keep overall price levels basically stable. Nevertheless,
fast increases in consumer prices in the second half of last year will likely have
a significant carry-over effect on prices in the first halfof this. year.. At the same
time, there are quite a few factors causing price increases, including massive
increases in global liquidity; continued and significant imported inflationary
pressure frorn price increases for maj or commodities in the international market;
relatively large domestic money stock; and gradual increases in the cost of
factors of production, such as energy, raw materials, land and labor. Also,
reforms of prices for resource products and environmental protection charges
are being actively yet prudently carried out, and all these factors are exerting
upward pressure on prices to a certain degree. The decision to allow the CPI to
rise by about 4% has been taken not only based on the aforementioned factors
and people' ability to tolerate price increases, but also to leave space for the
reform of prices.
--Ensuring and improving the people s wellbeing. We will increase urban
employment by more than 9 million and keep the urban registered
unemployment rate no higher than 4.6%; strive to increase personal income in
step with economic development and raise wages and salaries in step with
growth in labor productivity, and increase both urban per capita disposable
income and rural per capita net income by more than 8% in real terms; continue
to improve the social security system and start construction on low-income
housing and renovation of run-down areas with a total of 10 million units this
year; and keep natural population growth under 6.5%0. Ensuring and improving
the people's wellbeing is an inevitable requirement of carrying out scientific
development and promoting social harmony, and it is also the urgent necessity
for constantly satisfYing the people's new expectations for a better life, as well
as the fundamental starting point and goal of accelerating the transformation of
the pattern of economic development. We must always remember that

21
 developing the economy is inseparable from improving the people's wellbeing,
and organically integrate accelerating the transformation of the pattern of
economic development with ensuring and improving the people's wellbeing. We
need to give higher priority to properly solving major problems that concern the
immediate interests of the people such as employment, income distribution and
social security; improve the institutional framework as well as systems and
mechanisms; increase investment; strive for new successes; and ensure that the
achievements of reform and development reach all the people.
--Improving the balance ofpayments. We will promote the transformation
and upgrading of export goods, accelerate the development of trade in services,
vigorously expand imports, and increase total import and export volume by
about 10%. We will maintain growth in the utilization of foreign capital, further
optimize the way it is utilized, and steadily expand Chinese investment overseas.
Although this year the global economic enviromnent is still grim and
complicated, protectionism in various guises is rearing its head, and competition
in the international market is becoming increasingly fierce, so long as we make
the most of our comparative advantages in the global economic division of labor,
put equal emphasis on exports and imports as well as on attracting foreign
capital and making outward investment, and accelerate the transformation ofthe
patterns of our foreign trade and outward investment, we will be able to
continue to maintain a steady increase in external demand and further imprOve
the balance of payments.

III. Major Tasks and Measures for

Economic and Social Development in 2011

This is the first year of implementing the Twelfth Five-Year Plan.

Successfully completing all the work for economic and social development in
2011 is of great significance for continuing to seize and make full use of this
important period of strategic opportunities as well as greeting the 90th
anniversary of the founding of the CPC with outstanding achievements. We
need to continue to strengthen and improve macro control; more actively yet
prudently handle the relationships between maintaining steady and rspid
economic development, restructuring the economy and managing inflation
expectations; and attach greater importance to stabilizing the overall level of
prices. We will continue to implement a proactive fiscal policy and fme-tune the
intensity of policy implementation. We will reduce the budget deficit and the
scale of govermnent bonds by appropriate amounts. This year, we have
projected a deficit of900 billion yuan, 150 billion yuan less than last year. This

22
 figure includes a central government deficit of 700 billion yuan and 200 billion
yuan in bonds that will be issued by the central government on behalf of local
authorities and be included in local government budgets. The deficit as a
percentage of GDP will drop to about 2%. We will implement a prudent
monetary policy; the broad money supply (M2) is expected to increase about
16% this year; and we will keep financing from all sources at a reasonable level.
We need to have a good grasp of the intensity, tempo and focus of policy
implementation; strengthen coordination between policies; and comprehensively
consider both short-term macro-control policies and long-term development
policies. We need to work hard to resolve major problems presently hindering
our development and prevent large economic fluctuations, and at the same time,
we also need to effectively resolve deep-seated problems and defuse potential
risks, and make development more coordinsted, sustainable and internally
vigorous.
In 2011, we will concentrate on the following nine tasks.
1. We will adhere to the strategy ofexpanding domestic demand, especially
consumer demand, and maintain steady and rapid economic development.
I) We will further increase conslL.'I1er demand. This year, total retail sales of
consumer goods are expected to increase 16%. We will intensifY efforts to
adjust income distribution, increase government spending used to improve and
expand consumption, and increase subsidies to farmers and low-income urban
residents. We will continue to implement the policies of subsidizing rural
residents' purchase of home appliances and providing subsidies for trading in
old home appliances, implement preferential policies to encourage people to
buy energy-efficient and new energy vehicles, and promote more widespread
use of energy-efficient products. We will vigorously develop new consumption
fonnats such as e-commerce, and spur consumption in the areas of culture,
travel and fitness. We will promote chain-store operations and uirified
distribution in rural areas,. and optimize the layout of urban commercial
networks. We will rectifY and standardize markets and protect consumers'
legitimate rights and interests.
2) We will maintain a rational scale of investment while improving the
investment structure. Total fixed-asset investment is expected to increase 18%
nationwide in 2011. We will make full use of the role of government investment
in guiding structural adjustments. We will allocate 382.6 billion yuan from the
central government budget for investment, a decrease of 10 billion yuan from
last year; give priority to ensuring funding for key ongoing projects, and begin
construction on the major projects in the Twelfth Five-Year Plan in an orderly
manner. Investment funds from the central government budget will mainly be

23
used to support development of low-income housing; water conservancy
fadlities; agricultural infrastructure; education and health infrastructure;
independent innovation, energy conservation, emissions reduction, ecological
improvement and environmental protection; and economic and social
development in the central and western regions, especially Tibet, Tibetan ethnic
areas in Sichuan, Yunnan, Gansu and Qinghai, and Xinjiang. We will earnestly
implement the policy on encouraging and guiding development of
nongovernmental investment issued by the State Council and continue to work
hard on formulating supporting measures, in order to promote steady increases
in nongovernmental investment and optimize its structure. We will steadfastly
tailor guidance to different circumstances, guarantee some expenditures while
reducing others, resolutely control haphazard and redundant development in
sectors that are energy-intensive or highly polluting or have excess production
capacity, and improve the quality of and returns on investment.
3) We will do a good job of regulating economic activities. We will improve
the coordination of coal production and transportation with demand; strengthen
the demand-side management of power; balance supply and demand of crude. oil,
refined petroleum products and natural gas and properly handle distribution of
emergency supplies; and guarantee the transportation of key goods and
materials.
2. We will strengthen price regJ-Ilation and oversight, and keep the overall
level 0/prices basically stable.
I) We will ensure adequate market supply. We will effectively implement
the system whereby provincial governors are responsible for the "rice bag"
(grain supply) and mayors are responsible for the "vegetable basket" (non-staple
food supply). We will improve the reserve system for important commodities
and the system for temporarily purchasing and stockpiling major agricultural
products, scientifically decide when to increase or reduce reserves, and properly
adjust import and export volumes. We will open up channels for the distribution
of agricultural products, intensify our work on linking markets directly with
agricultural producers, standardize and reduce the rent of stalls at farm produce
markets and supermarket slotting fees, and support the upgrading and
renovation of key wholesale markets and the development of large grain
logistics nodes, wholesale vegetable markets, community vegetable stores and
cold-chain logistics.
2) We will make regulation better targeted. We will strengthen liquidity
management. We will establish a sound market monitoring and early warning
system for important agricultural and sideline products, and improve
contingency plans for regulating key commodity markets and prices. We will

24
 properly handle the timing, pace and intensity of adjustments to the prices of
commodities and services under govermnent regulation. We will set up a sound
price adjustment fund in accordance with the law.
3) We will strengthen oversight of prices. We will improve oversight of the
futures market for agricultural products, review and rectifY electronic trading
markets for agricultural products, and curb excessive speculation. We will
strictly examine and verifY grain purchasing qualifications, and standardize the
sale and intensive processing of agricultural products. We will earnestly
implement the Regulations on Administrative Penalties for Price Irregularities
and the Regulations on Countering Price Fixing, and crack down hard on illegal
practices, including hoarding for speculation, price gouging, raising prices in
disguised forms and colluding to drive up prices.
4) We will improve the subsidy system. We will continue to provide
temporary price subsidies to entitled groups, subsistence allowance recipients in
urban and rural areas, and childless and infirm rural residents who receive the
five guaranteed forms of support (food, clothing, medical care, housing and
burial expenses). Governments at all levels will increase allowances to higher
education and secondary vocational school students from poor families as well
as subsidies to student cafeterias of such schools. We will set up as soon as
possible a sound mechanism for coordinating subsistence allowances and
unemployment insurance benefits with price rises to guarantee the basic living
conditions oflow-income people.
5) We will improve the price enviromnent. We will enforce all rules and
regulations on reviewing and standardizing the collection of fees; continue to
rescind unreasonable fees; lower excessively high fees; and strictly prohibit the
unauthorized collection of fees, overcharging and collecting fees in disguised
forms.
6) We will strengthen the guidance of public opinion. We will ensure the
price situation is accurately reported, clearly explain pricing policies, and crack
down hard on those who maliciously drive up prices by fabricating stories or
spreading false information.
3. We willfurther improve our work relating to agriculture, rural areas and
farmers, and consolidate the foundation for developing agriculture and rural
areas and increasing rural incomes.
I) We will promote steady increases in grain production and strive to make
2011 the eighth consecutive year of good harvests. We will comprehensively
strengthen measures for stimulating the development of grain and agricultural
production; implement an initiative to sustain steady growth in grain production
nationwide; improve the reward policy for major grain-producing counties;

25
 carry out an intensive carnpaign to grow high-yield crops; increase government
rewards and subsidies for village-level public works projects, the launching of
which are determined by the villagers through deliberation; fully arouse the
initiative of governments at all levels to give high priority to agriculture and
grain production as well as rural residents' enthusiasm for farming and grain
production; and work very hard to ensure another year of good harvests. In 20II,
we will strive to maintain grain output at over 500 million tons; increase the
output of cotton, oilseed, sugar crops, meat and aquatic products to reach 6.8
million, 32.5 million, 125 million, 80 million and 54.3 million tons, respectively,
up 13.9%,0.3%,3.8%,0.9% and 1.2% from last year.
2) We will strengthen the construction of agricultural and rural
infrastructure with the focus on water conservancy. We will faithfully
implement the guiding principles of the Fifth Plenary Session of the
Seventeenth Party Central Committee and Decree No,1 issued by the Central
Committee this year, and draw up major policies for the reform and
development of water conservancy. We will move faster to harness small and
medium-sized rivers and reinforce dilapidated reservoirs, and strengthen
prevention and control of geological disasters from mountain torrents,
development of flood storage and retention areas, and construction of key
drought-relief projeqts in southwest China and other areas. We will accelerate
the implementation of projects to build auxiliary facilities and upgrade
water-saving devices inirrigated areas, and comprehensively intensify work on
key agricultural· irrigation and water conservancy projects and farmland
improvement projects. We will press ahead with projects for developing
high-quality farmland and allocating water resources. We will continue work on
comprehensive rural land development. We will improve working and living
conditions in rural areas. In 2011, we will solve the issue of providing safe
drinking water for another 60 million rural residents, raising the percentage of
the rural population with aCcess to safe drinking water to 77%; vigorously
develop methane projects in rural areas, and strive to increase the number of
rural households that use methane to 43.25 million by the end of the year, 3.25
million more than last year; carry out a new round of upgrading of rural power
grids and more quickly extend power grids to areas without electricity; continue
our support for the development of rural highways; expand efforts to renovate
dilapidated rural houses, with the target set at more than 1.5 million this year;
and successfully implement the project to build permanent homes for nomadic
herdsmen.
3) We will increase overall agricultural production qapacity. We will strictly
protect arable land, keep the total crop acreage stable, and work hard to increase

26
 per unit yield. We will accelerate implementation of the plan to increase national
grain production capacity by 50 million tons, and support northeast China in its
effort to increase its production capacity of japonica rice and com. We will
strengthen development of sugar crop production bases; demonstration bases for
drought"resistant agriculture; quality cottOn production bases in Xinjiang; and
cotton production bases in the Yellow, Huai, Hai and Yangtze river basins. We
will vigorously develop canola production bases in the Yangtze River basin;
oil-bearing peanut production bases in the Yellow, Huai and Hai river basins;
and soybean production bases in northeast China and Inner Mongolia. We will
support large cities in developing vegetable supply bases. We will support the
development of large-scale, standardized hog and dairy cow farms and the
system for cultivating superior breeds of livestock, poultry and aquatic products.
We will vigorously develop protected agriculture. We will increase investment
in agricultural scientific research and the application of research results. We will
carry out unified, specialized prevention and control of crop diseases and pests,
and comprehensively prevent and control major animal epidemics. We will
tighten oversight of the quality and safety of agricultural products. We will
strengthen fishery administration and improve fishing ports.
4) We will strive to facilitate a continuous increase in rural incomes. We
will raise the floor prices for major grain varieties. When new grain goes on the
market, we will raise the average price of wheat by 5.4 yuan per 50 kilograms,
early indica rice by 9 yuan, mid-season and late indica rice by 10 yuan, and
japonica rice by 23 yuan. We will keep expanding the scale of agricultural
subsidies and raise their standards. We will implement a dynamic mechanism
for adjusting general subsidies for agricultural supplies in step with price rises in
agricultural supplies such as fertilizer and diesel fuel. We will give strong
support to specialized farmer cooperatives, various service organizations in .rural
areas, and leading industrialized agricultural production enterprises, and actively
develop agricultural sectors that have .local advantages as well as the
agricultural product processing industry. We will strengthen county economies.
We will improve vocational training and employment guidance services for
mral migrant workers and protect their rights and interests.
4. We will accelerate industrial restructuring, and focus on enhancing core
competitiveness.
I) We will vigorously stimulate independent innovation and the
development of strategic emerging industries. We will conduct research and
formulate a plan for improving independent innovation capacity and a national
medium- and long-term program for developing major science and technology
infrastructure. We will intensively advance the Knowkdge Innovation Program,

27
 the Technology Innovation Program and major science and technology
infrastructnre projects; accelerate the implementation of key science and
technology programs; and carry out national pilot projects and demonstrations
for innovation-oriented cities. We will quickly formmate ahd implement a
development plan and supporting policies for strategic emerging industries, set
up a special fund for promoting their development, expand the scale of ventnre
capital investment in them, formmate a guiding list for developing them, and
work out industry standards for major emerging industries. We will orgauize the
implementation of industrial innovation and development projects, including
those on National Broadband Internet Agenda, cloud computing, the Internet of
Things, integrated circuits, flat-panel displays, space infrastructnre, regional
aircraft and industrialization of general aviation aircraft, as well as major
application and demonstration ,projects on the health of the people and on using
information technology to benefit the people. We will advance national pilot
programs and demonstrations for IT promotion.
2) We will actively transform and upgrade traditional industries. We will
continue to implement the plan for restructuring and invigorating key industries,
and promulgate ahd implement a new guiding catalog for industrial
restructuring. We will strongly support technological upgrading in enterprises.
We will actively make adjustments to the allocation of the productive forces in
key industries, including steel, petrocheruicals, non-ft:ITous metals ahd
ship-building. We will spred up the development of modem industrial clusters
of equipment manufactnring, auto parts, textile and other light industries. We
will stimulate restructuring and upgrading in the food industry, strengthen food
safety monitoring capabilities, and improve our ability to ensure food safety. We
will guide enterprise mergers and reorgauizations, and raise the level of
industrial concentration. We will set up a sound policy framework for phasing
out backward production facilities, continue to shut down backward production
facilities at thermal power plants, steel ruills, iron foundries, cement plants,
paper ruills, plate glass plants and other industrial enterprises in accordance with
the law, and start the trial of replacing small coal-fired furnaces with combined
heat and power facilities. We will expedite the development of public service
infrastructnre for small and medium-sizt:d enterprises, expand tht:ir funding
channels, and crt:att: a favorable enviromnent for their development.
3) We will accelerate tht: development of the service sector. We will
continue to carry out trials of comprehensive reforms in the service sector,
establish demonstration areas of clustered dt:velopment of producer services,
and make innovations in the pattern of development of consumer services. We
will focus on developing services oriented toward rural areas, accelerate

28
development of high-tech services closely linked with modem manufacturing,
and vigorously develop emerging services. We will broaden financing channels
for service enterprises, and quickly reduce electricity, water, gas and heating
rates for service enterprises encouraged by the state to the same level as those
paid by industrial enterprises. In 2011, it is projected that the number of urban
community service facilities will reach 185,000, an increase of 2.2%. We will
speed up development of information and communications infrastructure;
extend the country's optical cables to 10.95 million kilometers, 1 million
kilometers more than last year; and raise the number of broadband Internet
access ports to 223 million, an increase of35 million.
4) We will strengthen the development of the modern energy industry and
the comprehensive transport system. We will actively push for the
transformation ofthe methods of energy production and use, and build a modem
energy industrial system that is safe, stable, economical and clean. We will
accelerate mergers and reorganizations of coalmining enterprises, and carry out
the development of large coalmining bases and large and medium-sized modern
coalmines in an orderly manner. We will strengthen the development oflarge oil
and gas production bases and improve the pattern of the refinery industry. We
will vigorously develop renewable energy sources and promote the development
and use of new energy sources. In 2011, raw coal output is projected to grow
4.9%, cmde oil output will remain basically at the present level, and natural gas
output will increase 10.1%. Total electricity generation will increase 8%,
including 6.1% and 13.3% increases in hydropower and nuclear power
respectively, and the installed power-generating capacity of on-grid wind power
facilities will increase 45%. We will speed up the development of important
transportation routes and integrated transportation hubs; give priority to the
constmction of passenger railway lines, trunk railway lines in the western region,
national expreSSWaYs, national and provincial trunk highways, the main
navigation charmel on the Yangtze River, high-grade inland waterways, ports
and regional airports in the central and western regions, and main airports in the
western region; and improve road maintenance. In 2011, the total length of
railways and highways opened to traffic throughout the country will reach
99,000 kilometers and 4.1 million kilometers, up 8.8% and 3% respectively.
This includes 13,000 kilometers of high-speed railways and 83,000 kilometers
of expressways, increases of 4,700 kilometers and 9,000 kilometers respectively.
The total length of high-grade navigable inland waterways will reach 10,400
kilometers, 400 kilometers longer than last year. The number of airports opened
to air traffic will come to 181, an increase of 6.
5. We will optimize the pattern of regional development, make development

29
more balanced, and raise the level ofurbanization.
1) We will continue to implement the master strategy for regional
development.
We will steadfastly give priority to thoroughly implementing the strategy of
large-scale development of the western region in the master strategy for n~gional
development, carry out the major tasks and policies for developing the western
region in the new decade, and formulate the twelfth five-year plan for
large-scale development of the western region. We will issue a list of industries
in the western region encouraged by the state; give greater support to the
development of infrastructure and ecological and environmental conservation;
promote the development of industries that can take advantage of local strengths;
accelerate the development of national key experimental zones for development
and opening up; implement the policies to promote leapfrog development of
Tibet, Tibetan ethnic areas in Sichuan, Yunnan, Gansu and Qinghai, as well as
Xinjiang: and launch demonstration projects for ecologically oriented
development in the western region together with the project to tackle problems
in the development of contiguous areas in the western region that have high
concentrations of poverty and face special difficulties.
We will improve the modem industrial system in northeast China, compile
the twelfth five-year plan for revitalizing the region, organize the
implementation of the regional cooperation program between China and Russia
and the plan for the ecological conservation and economic transformation of the
forest regions in the Greater and Lesser Hinggan Mountains, and carry out trials
on sustainable development in resource-dependent cities.
We will thoroughly implement the plan for energizing development of the
central region; conduct research and formulate policies and measures to support
the development of the region in the new period; and further strengthen the role
of city clusters in the region and the economic belt along the middle reaches of
the Yangtze River in driving the development oftheir surrounding areas.
We will actively support the eastern region in its efforts to make innovations
in systems and mechanisms and transform the pattern of development, and in
continuing to take the lead in development.
We will give more assistance to old revolutionary base areas, ethnic
minority areas, border areas and poor areas; intensively launch the campaign to
develop border areas and improve people's lives there; and do a good job of
giving people work instead of relief subsidies and relocating people from .
inhospitable areas as a poverty relief measure.
2) We will stimulate growth of development priority zones (DPZs). We will
fully implement the national plan for DPZs; make detailed policies with

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 guidance tailored to each zone; better coordinate state programs, regional plans
and the national plan for DPZs; and establish a sound perfonnance evaluation
system. We will also accelerate the compilation of provincial-level DPZ plans.
3) We will actively yet prudently carry out urbanization. We will compile
and implement a plan to stimulate the sound development of urbanization, and
rationally designate the functions, industrial distribution and development
boundaries of large, medium-sized and small cities as well as towns. At the
same time, we need to take into full consideration the needs for employment,
education, social security, medical care and low-income housing of rural
migrant workers in cities, and systematically carry out the work of allowing
people who have left agriculture for other work and meet the conditions for
settling in cities to become urban residents.
6. We will unwaveringly advance energy conservation and emissions
reduction, and strengthen ecological improvement.
1) We will strictly implement the accountability system for meeting targets.
We will do a good job of breaking down the overall targets for energy
conservation and emissions reductions in the Twelfth Five-Year Plan into local
targets and improve evaluation methods. We will organize evaluations of
provincial governments' work on fulfilling targets for energy conservation and
emissions reductions during the Eleventh Five-Year Plan period and. implement
reward and punishment measures accordingly.
2) We will accelerate the development of key projects. We will implement
key renovation projects for saving energy and the project to promote
energy-efficient products for the benefit of the people. We will intensify R&D
on generic and key technologies for conserving energy and reducing emissions,
and successfully demonstrate the industrialization of major energy conservation
and environmental protection technologies and promote their application. We
will push ahead with the construction of urban facilities to treat sewage and
garbage, start work on flue gas denitrification in coal-fired power plants, and
make sure mOre pollution control facilities operate properly. 1h 2011, the
percentages of urban sewage treated and urban household waste safely handled
will increase 3.1 and 1.5 percentage points respectively.
3) We will strengthen management over energy conservation and emissions
reduction. We will fonnulate and implement limits on energy consumption per
unit of production in energy-intensive industries and energy efficiency standards
for the end-use of energy-consuming products. We will strictly enforce the
system for assessing and examining energy savings in investment projects. We
will carry out pilot programs on a cap-and-trade system for controlling overall
energy consmnption and trading energy savings. We will give priority to energy

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 conservation management in key energy-intensive enterprises, and launch a
campaign to get 10,000 enterprises to save energy and lower carbon emissions
and a green-buildings campaign. We will strictly enforce energy·saving
standards for new buildings, accelerate energy-saving renovations to existing
buildings and the reform of the heat supply by installing heating meters in
northern China where heating is supplied, and expand the use of renewable
energy in buildings. We will further implement energy-conservation
mechanisms such as energy performance contracting, efficient electricity
generation and distribution, demand-side management of power, energy
efficiency labeling, and state certification and government procurement of
energy-efficient products. We will strengthen our capabilities in energy
conservation management and the oversight and inspection of law enforcement
in this regard.
4) We will energetically develop a circular economy. We will improve and
implement policies and measures on encouraging and supporting the
development of a circular economy, and deepen pilot programs and
demonstrations for it. We will accelerate the comprehensive ntilization of
massive solid waste and make progress in desalinating seawater. We will
develop demonstration bases for recovering mineral resources from city waste,
and give impetus to the industrialization of remannfacturing and the
transformation of kitchen waste into resources. We will comprehensively carry
out clean production. In 2011, water consumption per 10,000 yuan of
value-added of industry will decrease 7% and the proportion of industrial solid
waste that is comprehensively utilized will increase 1 percentage point.
5) We will strengthen ecological and environmental protection. We will
intensify water pollution prevention and control in key watersheds, especially
major rivers and lakes; strengthen efforts to clean up heavy metal pollution in
key areas and the comprehensive improvement of the rural environment; and
control non-point source pollution in rural areas. We will strengthen efforts to
clean up and control marine pollution. We will implement the second phase of
the virgin forest protection project, accelerate the development of ecological
shields in the Qinghai-Tibet Plateau, continue to control the sources of dust
storms affecting Beijing and Tianjin, comprehensively prevent karst areas from
becoming stony deserts, build key forest shelterbelts, and start ecological and
environmental protection in and comprehensive improvements to the Loess
Plateau and the Qilian Mountain glacier and water source conservation area. We
will further implement the project of returning grazing land to grasslands and
support the ecological protection. of major water source supply areas. We will
establish a sound mechanism for ecological compensation, advance pilot

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 programs on compensation in major functional ecological zones, and introduce
a master plan for the national experimental area for comprehensive ecological
conservation of the sources of the Yangtze, Yellow and Lancang rivers. We will
intensifY efforts to bring soil erosion under control through combined measures.
And we will put greater emphasis on controlling geological disasters in key
areas.
6) We will actively respond to climate change. We will meet the action
targets for controlling greenhouse gas emissions. In 2011, we will afforest an
additional 6 million hectares of land, increase. forest stock, and enhance our
carbon sequestration capability. We will put in place a statistics and accounting
system for greenhouse gas emissions, expand Jow-carbon trials, and increase
international cooperation on responding to climate change.
7. We will work hard to ensure and improve the people:S wellbeing, and
establish a sound system of basic public services and sound social
administration mechanisms.
1) We will steadfastly implement a more proactive employment policy. We
will give high priority to promoting employment in economic and social
development, energetically develop hIbor-intensive industries, small and micro
enterprises, modern services and househOld services, and encourage
entrepreneurship and independentjob seeking. We will put great effort into our
work concerning the employment of college and university graduates, the rural
migrant labor force, urban residents who have difficulty finding jobs, and
demobilized military personnel. We will continue to strengthen the development
of community-level service facilities for employment and social security,
establish a sound, unified, standardized and flexible human resources market,
and strengthen vocational training. We will improve the mechanism for settling
labor disputes.
2) We will rationally adjust income distribution. We will conduct research
and formulate a plan to reform income distribution, adjust the pattern of national
income distribution, and narrow the income gap. We will put in place a sound
mechanism of regular pay increases fOr enterprise employees, steadily promote
collective bargaining for wages, gradually increase the minimum wage, and
resolutely prevent the problem of wage arrears, especially those of rural migrant
workers. We will carry out the reform of the personal income tax system in a
step-by-step manner, raise the income tax threshold on salaries by an
appropriate amount, reduce the tax burden on low- and middle-income groups,
and improve the policy of dual regulations on total payroll and average salary
levels in high-income industries. We will rectifY and standardize the pattern of
income distribution.

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 3) We will genuinely do our social security work well. We will implement
the methods for transferring pension accounts and medical insurance accounts,
and turn over the overall management of social insurance accounts to
higher-level authorities. We will improve the mechanism of regular adjustments
in basic pensions for enterprise retirees and subsistence allowances for urban
and rural residents. We will actively advance the reform of pension insurance
system for government agencies and institutions, and expand trials of the new
type of pension insurance for rural residents. In 2011, the numbers of urban
participants in pension, medical, unemployment and workers' compensation
insurance will reach 8.27 million, 7.94 million, 1.24 million and 8.27 million,
respectively. We will accelerate the development of social assistance and social
welfare programs, and strengthen the development of facilities for caring for
orphans, rehabilitating people with disabilities and elderly services. In 2011, the
number of beds for elderly Care per 1,000 old people will reach 20, up 9.9%,
and the number of service facilities for people with disabilities will be 3,230, up
8.6%.
4) We will speed up the development of the system for ensuring adequate
housing. We will intensify the construction of low-income housing; carry out·
the development of public rental housing and other low"income housing projects .
on a large scale; accelerate the renovation of run-down areas in cities, industrial
and mining areas, forest regions and land reclamation :zones; set up a
mechanism for steady governmental investment in low-income housing and a
mechanism for guaranteeing the repayment of nongovernmental capital in this
area; give priority to low-income housing projects when making land supply
and construction plans; and encourage nongovernmental capital to participate in
the construction and operation of public rental housing. We will continue to
increase the effective supply of commodity housing, increase the proportion of
low- and medium-priced housing of modest size, and standardize and develop
the rental housing market. We will further implement and improve policies for
regulating the housing market, curb housing demand for speculation and
investment purposes, and prevent housing prices from rising too quickly. We
will promptly improve our housing systems and policy framework so they better
suit our national conditions, and establish a permanent mechanism for
effectively adjusting housing supply and demand.
5) We will strengthen the development of key areas in education. We will
fully implement the National Medium- and Long-Term Plan for Education
Reform and Development. We will accelerate the transformation of needy
primary and secondary schools in rural areas, and continue to carry out the
project to renovate rural junior secondary school buildings in the central and

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 western regions, the nationwide program for safe primary and secondary school
buildings as wen as the improvement of vocational education infrastructure. We
win energetically develop preschool education in rural areas, give attention to
special education, improve senior secondary education and vocational education,
and support the development of ethnic coneges and bilingual education in ethnic
minority areas. We win carry out the construction of dormitories for teachers at
rural schools in remote areas and areas with harsh conditions. We win improve
the quality of higher education, and speed up the development of first-class
universities and academic disciplines. We win solve the problem of schooling
for children of families with financial difficulties.· In 2011, the gross enrollment
ratio in secondary education is expected to reach 84%, and plans call for
enrolling 6.75 million undergraduate students and 560,000 graduate students in
regular institutions of higher learning.
6) We win promote the development of medical and health care programs.
We will strengthen the development of the medical and health service system
with the focus on the primary level, carry out the project for setting up bases to
train general practitioners, and develop the system of health supervision, the
system of emergency medical services in rural areas and the system for
preventing and treating mental health problems. We win increase investment in
medical infrastructure in rural areas, especially in remote areas in the central
and western regions. In 2011, per capita fund for basic public health services
win be increased from 15 yuan to 25 yuan, and annual per capita government
subsidies on the new rural cooperative medical care system and on basic
medical insurance for non-working urban residents will be raised from 120 yuan
to 200 yuan. We win work hard to raise the number of hospital beds per 1,000
people to 3.42, up 5.6%. We will improve the population and family plaoning
service system.
7) We win vigorously develop cultural programs and cultural industries. We
win accelerate the establishment of a public cultural service system covering
both urban and rural areas. We win actively advance cultural projects that
benefit the people, and accelerate the construction of key cultural facilities. We
win promote the flourishing of philosophy and the social sciences, and carry out
major cultural projects and product innovation in radio, fihn and television, the
press and publishing, and other areas. We will standardize and develop bases for
the cultural industry; strengthen the protection of cultural and natural heritage
sites; and open more art galleries, libraries, cultural centers, museums, memorial
halls, and science and technology centers to the public free of charge. We win
strengthen the development oftourism infrastructure and begin to implement the
second phase of the program for developing tourist sites related to the early

35
 history of the CPC. We will comprehensively develop recreational sports. In
2011, radio and television coverage is forecast to reach 96.71% and 97.43% of
the population respectively, and 2.31 billion domestic tourist trips will be taken,
up 7.4%.
8) We will be innovative in social administration. We will integrate
community administration resources, further expand channels for people to
make appeals concerning matters affecting their interests, actively prevent and
properly handle all types of mass incidents, and strengthen all facets of public
security. We will strengthen oversight and administration of food and drug
safety. We will resolutely prevent serious and major accidents.
9) We will continue to do a good job in post-disaster recovery and
reconstruction. We will fully complete the tasks for post-Wenchuan earthquake
recovery and reconstruction, and make genuine progress in post-disaster
recovery and rebuilding work in Yushu and Zhugqu.
8. We will put more effort into tackling difficult problems in reform, and
increase the impetus and vitality ofeconomic and social development.
1) We will adhere to and improve the basic economic system whereby
public ownership is dominant and economic entities under diverse ownership
forms develop side by side. We will continue to strategically adjust the public
sector, improve the mechanism for redirecting investments of state capital to
ensure its rational flow, and cultivate large companies and conglomerates that
have the ability to compete internationally. We will deepen reforms of the power,
petroleum and salt industries. We will encourage, support and guide the
development of the non-pUblic sector, and create an institutional environment
for economic entities under all ownership forms to use factors of production on
an equal basis in accordance with the law, compete as equals in the market and
be equally protected by the law.
2) We will actively yet prudently carry forward the reform of prices for
resource products and environmental protection charges. We will carry out a
market-based reform of prices for refilled petroleum products at an appropriate
time. We will reform and improve the pricing mechanism for natural gas, and
make the price ratio of natural gas to alternative energy sources more reasonable.
We will choose an opportune moment to introduce progressive pricing for
household electricity consumption. We will improve pricing mechanisms for
nuclear power, hydropower and power generated from other renewable energy
sources. We will press ahead with water price reform. We will do more to
promote trials of the cap-and-trade system for pollution rights.
3) We will accelerate the reform of the pharmaceutical and healthcare
systems. We will thoroughly carry out the five key reforms in this area and

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basically complete the major tasks scheduled for 2009-2011. This year we will
keep participation rates in the basic medical insurance schemes for working and
non-working urban residents and the new rural cooperative medical care system
above 90%. We will implement the basic drug system in all primary-level
medical and health care institutions run by the government, establish a
standardized mechanism for basic drug procurement, press ahead with the
comprehensive reform of primary-level medical and health care institutions, and
create a steady, permanent compensation system for these institutions. We will
effectively carry out the trial reform of public hospitals. We will implement the
policy to encourage and guide nongovernmental capital· toward medical
institutions.
4) We will deepen reforms of the fiscal, taxation, financial and investment
systems. We will improve the transfer payment system, enlarge the size and
proportion of general transfer payments, and improve the mechanism to ensure
basic funding for county-level govermnents. We will deepen the reform of the
budget management system, and make budgetary work more open. We will
extend the reform of resource taxes to more types of resources. We will carry
out a trial VAT reform in producer service industries. We will improve the
system of multilevel capital markets, accelerate the development of the bond
and futures markets, and increase the proportion of direct financing. We will
energetically develop new types of rural financial institutions. We will further
improve the RMBexchange rate regime. We will promptly formulate the
Regulations on Government Investment and the Regulations for Managing the
Approval and Recording of Enterprise-Funded Projects.
5) We will continue to advance comprehensive rural reform. We will
conduct research and formulate regulations on rural land expropriation. We will
deepen the reform of tenure in collective forests, and continue to implement the
pilot reform of state forestry farms arid forest regions. We will vigorously carry
out pilot projects for integrated, complete reforms.
9. We will steadfastly implement the win-win strategy of opening up and
expand international economic cooperation.
1) We will optimize the structure of foreign trade. We will adhere to the
strategy of diversifying markets, strengthen traditional markets, energetically
open up new markets, and stabilize and expand external demand. We will speed
up the transformation and upgrading of the processing trade; support exports of
complete sets of equipment, cultural products, software and other commodities
and services with great demand potential; vigorously develop the outsourcing of
services; and continue to limit exports of resource products and products whose
production is energy intensive or highly polluting. We will improve policies for

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 promoting imports, and increase imports of advanced technology and equipment,
key spare parts and components, energy and raw materials as well as
energy-conserving and environmentally friendly products. We will strengthen
and improve multilateral and bilateral business ties and properly address trade
frictions.
2) We will make better use of foreign capital and improve its performance.
We will revise and promulgate the Suggested List of Industries for Foreign
Investment and the List of Industries with Local Strengths in the Central and
Western Regions for Foreign Investment, and lead foreign investment toward
high-end manufacturing, high-tech industries, modem services, and energy
couservation and environmental protection as well as the central and western
regions. We will support the participation of foreign capital in the restructuring
and upgrading as well as the merging and reorganizing of Chinese enterprises in
a variety of ways. We will actively yet prudently open the service sector wider
to foreign involvement. We will further improve the unified management of
foreign debts.
3) We will thoroughly implement the "go global" strategy. We will improve
fiscal, taxation, financial and insurance policies to help Chinese enterprises "go
global." We will expand the use ofRMB in cross-border trade and investment.
We will improve overseas risk prevention and control mechanisms. We will
continue to promote cooperation on energy, mineral resources and agriculture
overseas. We will do a good job of providing economic assistance to other
countries.
We will increase exchanges and cooperation between the mainland and
Hong Kong and Macao, and continue to implement the Closer Economic
Partnership Arrangement. We will support Hong Kong in consolidating and
elevating its position as an international financial, trade and shipping center, and
enhancing its global financial influence. We will support Macao in making itself
into a world center of tonrlsm and leisure and fostering an appropriate level of
diversified economic development. We will deepen cooperation between
Guangdong, Hong Kong and Macao, and promote the region's economic
development. We will deepen cross-Straits economic cooperation, carry out the
Economic Cooperation Framework Agreement, promote two-way investment,
and strengthen exchanges and cooperation in emerging industries, finance and
other modem services together with culture, education and other areas. We will
give full play to the role of the Western Taiwan Straits Economic Zone in
leading the way and exploring new paths for cross-Straits exchanges and
cooperation.

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Fellow Deputies,
Successfully completing all the work for economic and social development
in 2011 will be an arduous task and a great responsibility for us. We will unite
even closer around the CPC Central Committee with Comrade Hu Jintao as
General Secretary,· follow the gliidance of Deng Xiaoping Theory and the
important thought of Three Represents, thoroughly apply the Scientific Outlook
on Development, voluntarily accept the supervision of the NPC, and listen with
an open mind to comments and suggestions from the CPPCC National
Committee members. Let us forge ahead with determination and work diligently
to achieve the targets for economic and social development and get the Twelfth
Five-Year Plan off to a good start.

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