2006 a good start to 11th Five-Year Plan

In his government work report Premier Wen Jiabao said that 2006 was a good start to the 11th Five-Year Plan (2006-10). China made significant achievements in social and economic development in 2006.

-- Steady and rapid economic growth

GDP reached 20.94 trillion yuan, an increase of 10.7% over 2005; the consumer price index rose 1.5%. The economic growth rate has been equal to or higher than 10% for four consecutive years now with no significant inflation.

-- Economic efficiency improved steadily

National revenue hit 3.93 trillion yuan, an increase of 769.4 billion yuan over 2005; profits of above-scale industrial enterprises rose 31%, an increase of 444.2 billion yuan.

-- Reform and opening-up expanding further

Key areas and sectors continued to make progress. The value of import and export trade totaled US$1.76 trillion, an increase of 23.8% over 2005; actual use of foreign direct investment was $69.5 billion.

-- Development of social change accelerated

Significant results were seen in technological innovation. The education and public health systems have been improved. Culture and sport are blossoming.

-- People's lives have greatly improved

Approximately 1.184 million new jobs were created in urban areas. The disposable income of urban residents reached 11,759 yuan per capita. Net income of rural residents hit 3,587 yuan per capita. After deducting price factors, the actual growth rate reached 10.4% and 7.4% respectively over the previous year.

Seven focal points of work in 2006

The State Council focused on seven major areas in 2006, Wen said.

-- Strengthening and improving macro-regulations and controls

The central government promptly adopted a series of macro-controls in connection with conspicuous problems in economic operations such as the overly rapid growth of investment, excessive monetary credit and trade surplus.

-- Increasing work on the three agriculture-related aspects

Expenditure on the three agriculture-related aspects (rural areas, farmers and agriculture) reached 339.7 billion yuan, an increase of 42.2 billion yuan over the previous year.

-- Accelerating economic restructuring

Efforts have been made to formulate policies and take measures to accelerate the revitalization of the equipment manufacturing industry and promote the independent manufacture of major technologies and equipment for key areas.

-- Actively promoting reform and opening up

Progress has been made in adjusting the layout of the state economy, reforming the shareholding system of state-owned enterprises, and supervision of state-owned assets.

-- Vigorously developing social undertakings

Central finance spending on technology, education, health and culture was 77.4 billion, 53.6 billion, 13.8 billion and 12.3 billion yuan, an increase of 29.2%, 39.4%. 65.4% and 23.9% over the previous year.

-- Striving to improve the employment and social security situation

The central government endeavored to improve and better implement the policies that support employment and reemployment, and allocated 23.4 billion yuan for employment and re-employment funds.

-- Continuing to build a democracy and legal system

The State Council submitted seven legal bills including the draft law on enterprises' income tax, anti-monopoly, unexpected events management and compulsory education to the NPC Standing Committee for consideration. It also enacted 29 administrative regulations such as an AIDS Prevention Act and Regulations on the Management of Foreign Banks.

Contradictions and problems in China's economic and social development

Premier Wen pointed out that there are still many contradictions and problems in China's economic and social development, and some shortcomings and deficiencies in government work.

The first problem is the prominent contradictions in the economic structure. The proportion of primary, secondary and tertiary industries in GDP is imbalanced. Development in urban and rural areas is uneven. The relationship between investment and consumption is uncoordinated.

The second problem is the extensive economic growth pattern, which is reflected most prominently in high energy consumption and heavy pollution. China failed to meet its 2006 target to reduce energy consumption per unit of GDP by about 4% and cut down the total discharge of major pollutants by 2%.

Thirdly, efforts to resolve outstanding problems concerning the interests of the masses were insufficient. Many people on a low income still lead a difficult life.

Fourthly, the government itself still has some problems. There are still a small number of civil servants who neglect their responsibilities. They are detached from the masses, ignore their duty and abuse their power �C they are corrupt.

GDP growth in 2007 to hit approximately 8%

According to Wen, taking all factors into account, the main objectives of this year's national economic and social development are: to achieve an 8% growth in GDP based on efforts to optimize the structure, improve efficiency, lower consumption and protect the environment; to create new jobs for no less than nine million people in urban areas and keep the registered unemployment rate in urban areas below 4.6%; to keep the general level of prices stable and the rise of the overall consumer price index to within 3%; to improve the imbalance of international payments.

Continuing to strengthen and improve macro-controls and regulations

It is necessary to persist in strengthening and improving macro-controls so as to promote fast and stable economic development, Wen said.

China needs to continue to pursue sound fiscal policies, Wen said.

Firstly, the government should appropriately reduce the scale of the financial deficit and long-term treasury bonds for construction. This year the central government's budget deficit will be 245 billion yuan, a decrease of 50 billion yuan from 2006; planned long-term treasury bonds for construction are valued at 50 billion yuan, 10 billion yuan less than last year; investment in routine construction from the central budget is 80.4 billion yuan, 25 billion yuan more than last year's budget; total investment in central government construction is 130.4 billion yuan.

Secondly, the structure of the government budget and government investments needs to be improved. China needs to ensure that direct investment in rural production and living conditions exceeds that of the previous year; investment in social undertakings such as education and public health exceeds that of the previous year; and that input into the development of western regions exceeds that of the previous year.

Thirdly, the excess financial revenue should be used appropriately. It should be used primarily to pay export tax rebates, return farmland to forest and other old problems. The government should increase local tax returns and general transfer payments according to the law, increase investment in education and science, and increase funding for social security, policy-based SOE bankruptcy, and the basic living expenses of residents.

By People's Daily Online