CHINA> Key Reports
Report on the Work of the Government [Full Text]
(Xinhua)
Updated: 2008-03-19 10:39
We are also clearly aware that there are still many problems affecting China's economic and social development and the work of the government, and that changes in the domestic and international environment present many new challenges and risks.

- There are still some prominent issues and deep-rooted problems affecting economic performance. China has experienced overheated growth in fixed asset investment, excessive supplies of money and credit, and imbalance in its international payments in recent years. Longstanding structural problems and the extensive pattern of growth remain serious problems. There is a lack of balance between investment and consumption, with the investment rate still running too high. Development of primary, secondary and tertiary industries is not in balance, with too much investment in primary industry, particularly heavy industry, but too little investment in the service industry. China's capacity for independent innovation is still weak and the price paid for economic growth in terms of resource consumption and environmental pressure is too great. Agriculture, the foundation of the economy, remains weak. The difficulty of maintaining steady agricultural development and keeping the incomes of farmers increasing has grown, and the growing development gap between urban and rural areas and between regions has not been checked. In particular, the institutional factors hindering economic development remain serious, making institutional reform a daunting task.

- More work needs to be done to resolve problems affecting the vital interests of the people. The current price hikes and increasing inflationary pressures are the biggest concern of the people. Last year's consumer price index (CPI) rose by 4.8% year-on-year, mainly due to large increases in the cost of food and housing. There are a variety of factors behind the price increases. Though the domestic prices of farm products have remained low for many years and some of the recent price increases were therefore overdue and somewhat reasonable, price increases nevertheless have a great impact on people's lives, especially on the lives of the low-income sector of the population. The prices of primary commodities on the international market have risen considerably in recent years, which directly puts upward pressure on domestic prices. Because factors driving prices up are still at work, upward pressure on prices will remain great this year. In addition, prices of the means of production have continued to rise and real estate prices have risen steeply, making the task of holding down inflation difficult. There are still quite a few problems in employment, the social safety net, education, medical and health care, income distribution, housing, product quality and safety, workplace safety and public security, and we need to work harder to resolve them.

- Both uncertainties in the international economic environment and potential risks have increased. As economic globalization proceeds, the Chinese economy becomes increasingly tied to the world economy. The current imbalance in the global economy is only getting worse and global economic growth is slowing, making international competition even fiercer. The impact of the US sub-prime mortgage crisis is expanding, the value of the dollar is continuing to fall, and there is greater risk in international financial markets. Grain prices are rising and prices for petroleum and other primary products remain high in the international market. Trade protectionism has gotten worse, and trade frictions have increased. The effect of certain political factors in the international arena on world economic trends cannot be overlooked. All this could adversely affect China's economic development. China is now in a critical period in its reform and development, and we must be fully prepared for changes in the international environment and become better able to defuse risks.

- The government's self-improvement efforts and administration need to be strengthened. We are keenly aware that the work and accomplishments of the government still fall somewhat short of what circumstances require and the people expect. The functions of government have not been completely transformed, and public administration and public services are still weak. Some government departments have overlapping responsibilities, their powers and responsibilities are not well matched, some try to shirk their responsibilities, and their performance is poor. Some government employees have an inadequate sense of responsibility toward the public and are not competent enough. Oversight mechanisms and checks on government authority are not strong enough. The problems of formalism and bureaucratic behavior are fairly common, and fraud, extravagance and waste, and corruption are quite serious.

We must remain clear-headed at all times, be more mindful of potential danger, be highly responsible to the country and the people, maintain a high sense of mission and urgency, work even more industriously, and successfully carry out all of the government's work.

Fellow Deputies,

The achievements of the past five years have not come easily. They were built on a foundation laid through many years of reform and opening up, and are attributable to the correct leadership of the Party Central Committee with Comrade Hu Jintao as General Secretary, which has effectively managed the overall situation. Credit also goes to the hard work and concerted effort of the people of all the ethnic groups in China, and to the support and assistance of overseas Chinese nationals and foreign friends. Displaying indomitable determination, courage and will, the Chinese people have overcome untold difficulties and challenges and accomplished major tasks. On behalf of the State Council, I would like to sincerely thank the people of all the ethnic groups, the democratic parties, the people's organizations and people from all sectors of society. I would like to express my sincere thanks to our compatriots in Hong Kong and Macao special administrative regions and in Taiwan, as well as overseas Chinese nationals. I would like to thank governments of other countries, international organizations and foreign friends of China around the world for their understanding of and support for China's modernization.