Wen's gov't work report at the Second Session of the 11th NPC

2. Actively boosting domestic demand, especially consumer demand, and strengthening the role of domestic demand in driving economic growth

First, we will expand consumption, especially individual consumption. We will continue to adjust income distribution, raise the proportion of the national income that goes to wages, increase the proportion of government spending dedicated to improving people's lives and expanding consumption, and increase subsidies to farmers and low-income urban residents. We need to cultivate areas of high consumer demand and expand consumption in new areas. We will improve the policy on automobile consumption, accelerate development of markets for second-hand cars and car rental, and guide and promote rational spending on automobiles. We will vigorously expand consumption that makes people's lives easier, such as community-based businesses, property management and household services; accelerate development of tourism and leisure consumption; increase consumption in culture, recreation, sports and fitness services; and vigorously expand consumption in new areas such as the Internet and animation. We will improve consumption policies and the consumption environment. We will accelerate the project to encourage retailers to open stores in more townships and villages, and encourage commercial chains to open more outlets in rural areas. We will intensify the development of consumption facilities and service networks in both urban and rural areas, rectify order in the market, and safeguard the legitimate rights and interests of consumers. We will promptly work out and introduce policies and measures to encourage consumption, and vigorously develop consumer credit. We will do all the work of implementing the programs for bringing home appliances, agricultural machinery, and automobiles and motorbikes to the countryside well, and we will make effective and flexible use of the 40 billion yuan in central government subsidies provided to get enterprises to increase their sales and enable farmers to enjoy real benefits.

Second, we will maintain rapid growth in investment and improve the investment structure. The central government plans to invest 908 billion yuan this year. Government investment will focus on projects to improve people's lives such as those for developing low-income housing, education, heath care and culture; projects to conserve energy, protect the environment, improve the ecosystem, upgrade technologies, and make scientific and technological innovations; projects to make key infrastructure improvements, including farmland improvement and water conservancy projects, railways, and freeways; and post-earthquake recovery and reconstruction. We must channel government investment to areas where it best counteracts the effects of the global financial crisis and to weak areas in economic and social development, and no government investment will be made in the regular processing industries. We will promptly work out and introduce preferential policies to encourage and guide non-governmental investment. We need to support non-governmental investment in areas favored by state industrial policies and encourage enterprises to increase spending on R&D and technological upgrading through proper release of information and improved guidance. All government money comes from the people, and we must spend every penny responsibly. We will make every effort to ensure that all construction projects meet high quality standards and are built to last and be passed onto our future generations as valuable legacy.

Third, we will promote the steady and healthy development of the real estate market. We will adopt even more vigorous and effective policies and measures to stabilize market confidence and expectations, keep real estate investment stable, and promote steady and orderly development of the real estate industry. We will speed up implementation and improvement of policies and measures to promote development of low-income housing projects. Wewill strive to solve the housing problems of 7.5 million low-income urban families and 2.4 million families living in shantytowns in forests, on reclaimed land and around coalmines within three years. This year, the central government will allocate 49.3 billion yuan for the construction of low-income housing to increase funding for developing low-rent housing and improving housing conditions in shantytowns, and increase housing subsidies for the central and western regions by an appropriate amount. We will expand the pilot program for renovating dilapidated houses in rural areas and build permanent housing for nomads in ethnic minority areas. A pilot program will be launched in selected places where conditions permit to use the idle portion of the housing accumulation fund to support development of affordable housing. We will vigorously develop public rental housing. We will effectively implement credit, tax and other policies to support people in purchasing homes and making home improvements. Individuals who meet relevant criteria and apply for bank loans to support the purchase of a second home for personal use will enjoy similar preferential lending policies that apply to the purchase of first homes. We will implement the policy to reduce or exempt the business tax on housing transfers to varying degrees based on the age of the housing. We will expand consumption and supply of ordinary commercial housing, and increase credit support for building small and medium-sized condominiums at low and medium price levels. We will speed up development of the market for second-hand homes and the home rental market. We will encourage and guide local governments to stabilize and develop their real estate market in light of local conditions, and strengthen supervision of the housing market by type. We will continue to rectify order in the real estate market, and standardize transactions. We will help rural migrant workers in cities solve their housing problems. We will deepen reform of the urban housing system to meet people's multilevel housing demand, and strive to ensure adequate housing for everyone.

Fourth, we will accelerate recovery and reconstruction of areas hit by the Wenchuan earthquake. We will promptly and fully implement the master plan for post-earthquake recovery and reconstruction. The central government will allocate 130 billion yuan for this purpose this year. We will quickly rebuild homes for quake-affected urban and rural residents by combining repair and reinforcement of existing housing with construction of new housing. We will basically complete reconstruction of rural houses collapsed or badly damaged during the earthquake, and ensure quake-stricken residents can move into new houses by the end of this year. We will accelerate rebuilding of schools in the quake zone and ensure that more than 95% of the students whose school buildings were destroyed in the earthquake will have permanent school buildings. We will continue work to repair and rebuild infrastructure such as transportation, communications, energy and water conservancy facilities. We will effectively prevent and control geological disasters, restore the ecosystem, improve the environment, and resume cultivation of damaged arable land. We will speed up industrial rebuilding and development in the quake zone on the basis of the plan to adjust and reinvigorate key industries. We will continue to provide one-to-one assistance and special aid to the quake zone and manage and use funds, goods and materials for post-earthquake reconstruction well. We will intensify and accelerate post-earthquake reconstruction and strive to basically reach the targets in two years that had originally been set for three, so that residents of the quake zone can begin to live a happier life as soon as possible.