REPORT ON THE WORK OF THE GOVERNMENT

Delivered at the Fourth Session of the Eleventh National People's Congress

on March 5, 2011

Wen Jiabao

Premier of the State Council

Fellow Deputies,

On behalf of the State Council, I now present to you my report on the work of the government for your deliberation and approval. I also invite the members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) to submit comments and suggestions.

I. Review of National Economic and Social Development during the Eleventh Five-Year Plan Period

The Eleventh Five-Year Plan period was a truly extraordinary time in the course of the country's development. In the face of complex domestic and international situations and a series of major risks and challenges, the Communist Party of China (CPC) united with and led the people of all the country's ethnic groups in comprehensively advancing reform, opening up and modernization, bringing about a historic change in China over the past five years.

- The country's productive forces and overall national strength improved significantly. We effectively warded off the impact of the global financial crisis, maintained steady and rapid economic development and fulfilled the major objectives and tasks of the Eleventh Five-Year Plan, and the economy scaled new heights. GDP grew at an average annual rate of 11.2% to reach 39.8 trillion yuan. Government revenue increased from 3.16 trillion yuan to 8.31 trillion yuan. Major breakthroughs were attained in cutting-edge science and technology such as the manned space mission, the lunar exploration program and supercomputers. Great progress was made in the modernization of national defense and the army.

- Progress in all social programs accelerated and people's lives improved significantly. Comprehensive progress was made in education, science and technology, culture, public health and sports programs. The number of new urban jobs increased by 57.71 million, and 45 million agricultural workers found urban employment. The per capita disposable income of urban residents rose by an annual average of 9.7% and the per capita net income of rural residents by 8.9% in real terms. The social security system covering both urban and rural areas was progressively refined. - Major progress was made in reform and opening up. New breakthroughs were achieved in crucial areas and key links of reform, and the socialist market economy further improved. Last year, total foreign trade volume reached US$ 2.97 trillion and the openness of the economy increased rapidly.

- China's international prestige and influence grew significantly. We played an important and constructive role in international affairs; effectively safeguarded our national sovereignty, security and development interests; and made major progress in our all-around diplomacy. We successfully hosted the Beijing Olympics and Shanghai World Expo, thus fulfilling dreams the Chinese nation had cherished for a century.

These brilliant achievements clearly show the advantages of socialism with Chinese characteristics and the great power of reform and opening up. They greatly increased the confidence and pride of our people of all ethnic groups, strengthened the cohesiveness of the Chinese nation, and inspired us to forge ahead on our historic course.

The following are our main accomplishments over the past five years:

1. Strengthening and improving macro-control, and spurring steady and rapid economic development

We paid close attention to the orientation, focus and strength of macro-control and kept a firm grasp on the initiative in our economic work. In the early stages of the Eleventh Five-Year Plan period, we adopted correct policies and measures to address overheated investment growth, the excessive trade surplus, excess liquidity, and structural and imported inflation; effectively prevented emerging problems from evolving into trends; and prevented problems in anyone area from becoming general problems. In the last two years, we responded coolly to the impact of the global financial crisis a crisis of a severity seldom seen in the last century, made decisions scientifically and resolutely followed a proactive fiscal policy and moderately easy monetary policy. We steadfastly implemented a multi-point plan, greatly increased government spending and made structural tax reductions, carried out the plan for restructuring and reinvigorating key industries on a large scale, vigorously promoted innovation and increased support for work in science and technology, and substantially increased social security benefits. We steadfastly followed a strategy of expanding domestic demand; adopted policies and measures to encourage consumer spending; and increased urban and rural incomes, particularly for low-income people. As a result, consumer spending grew steadily and its structure constantly improved. We carried out a two-year investment plan to increase spending by 4 trillion yuan, including 1.18 trillion yuan from the central government. Of this amount, 43.7% was invested in low-income housing projects, projects to improve the wellbeing of rural residents, and social programs; 15.3% in innovation, restructuring, energy conservation, emissions reductions and ecological improvement; 23.6% in major infrastructure projects; and 14.8% in post-Wenchuan earthquake recovery and reconstruction. Government spending guided and drove nongovernmental investment, greatly increased domestic demand and effectively compensated for weak external demand. This helped to reverse the slowdown in economic growth in a relatively short time and make the Chinese economy the first in the world to pick up again. In this way, we not only got over the hard times and ensured and improved the wellbeing of the people, but also laid a firm foundation for long-term development.