8. We will put more effort into tackling difficult problems in reform, and increase the impetus and vitality of economic 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 refined 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 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 governments. 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 RMB exchange 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 and forest regions. We will vigorously carry out pilot projects for integrated, complete reforms.