Following is the full text of the Report on the Work of the Government delivered by Premier Wen Jiabao at the Third Session of the Tenth National People's Congress on March 5, 2005.

Fellow Deputies,

On behalf of the State Council, I now submit a report on the work of the government for your examination and approval and also for comments and suggestions from the members of the National Committee of the Chinese People's Political Consultative Conference.

I. Review of the Work in 2004 　　

Under the leadership of the Communist Party of China (CPC), the people of all our ethnic groups held high the great banners of Deng Xiaoping Theory and the important thought of Three Represents, worked together in an innovative spirit, and made major achievements worth celebrating in the socialist modernization drive in 2004.

We made progress while responding to new challenges and tests during the past year. Some new problems have emerged in China's economic activities over the last two years, mainly tight grain supply, overheated investment in fixed assets, excessive money and credit, and shortages of coal, electricity, petroleum and transportation. If allowed to grow unchecked, these isolated problems could have had an overall impact. After sizing up the situation, the CPC Central Committee and the State Council promptly made decisions and arrangements for strengthening macroregulation. Acting on the principles of adopting resolute and effective measures, taking timely and appropriate steps, dealing with problems individually and stressing practical results, they worked to solve prominent problems threatening steady and rapid economic development through a combination of economic and legal means, plus administrative means when necessary. Thanks to the concerted efforts of the whole nation, their macroregulation achieved significant results. Destabilizing, unsound factors threatening economic performance were contained, weak links were strengthened, and large economic fluctuations were avoided.

The main achievements over the past year were: the economy maintained steady and rapid development, overall national strength increased, significant progress was made in our reform, breakthroughs were achieved in opening up, social development was accelerated, and people's lives improved. China's GDP in 2004 reached 13.65 trillion yuan, an increase of 9.5 percent over the previous year. Government revenue came to 2.63 trillion yuan, up 21.4 percent. Retail sales of consumer goods totaled 5.4 trillion yuan, up 13.3 percent. The volume of imports and exports totaled 1.15 trillion US dollars, an increase of 35.7 percent, moving China up to third place in the world from fourth in the previous year. Some 9.8 million urban residents entered the workforce for the first time, a figure that exceeded the target. Urban per capita disposable income was 9,422 yuan, an increase of 7.7 percent in real terms after allowing for price factors, and rural per capita net income was 2,936 yuan, up 6.8 percent in real terms after allowing for price factors. All of the above shows that China has taken another solid step forward on the road of building a moderately prosperous society in all respects.

The work we accomplished during the past year mainly consisted of the following.

1. Adopting more direct and effective policies and measures to stimulate increases in grain production and rural incomes. Our macroregulatory initiative started with efforts to strengthen agriculture. The major measures we took were reducing or exempting the agricultural tax, rescinding all taxes on special agricultural products except tobacco, directly subsidizing grain producers, providing subsidies to farmers in certain areas to purchase improved crop strains and agricultural machinery and tools, and setting a floor price for the purchase of major cereal varieties. Investment was substantially increased in agriculture and rural areas, particularly in major grain-producing areas. Altogether, the central government spent 262.6 billion yuan on agriculture, rural areas and farmers, an increase of 22.5 percent. We also promoted agricultural restructuring to increase rural incomes through multiple channels. The intensity of these policies and measures and the substantial benefits to the farmers have rarely been seen in recent years. This greatly aroused the enthusiasm of farmers, resulting in a rebound in grain production. Grain output for 2004 totaled 469.47 million tons, 38.77 million tons more than the previous year. The increases in grain production and farmers' incomes played a crucial role in maintaining overall economic stability.

2. Bringing excessive investment in fixed assets under control and strengthening weak links. We curbed expansion of investment demand and the haphazard investment and low-level, redundant construction in some industries mainly by maintaining strict control over the twin valves of approval for land use and availability of credit. We thoroughly rectified and standardized order in the land market and straightened out all types of development zones. We froze the transfer of land from agricultural to nonagricultural purposes for six months, formulated the Decision on Deepening Reforms for Tightening Land Management, and improved the system for managing land and resources. We increased the reserve requirements for commercial banks, raised the basic interest rates on deposits and loans for financial institutions and the ceiling for interest rates on loans, and strengthened the management of commercial banks in terms of capital requirements. We increased the required proportion of up-front capital for construction projects in the steel, cement, electrolytic aluminum and real estate industries. We straightened out projects under and awaiting construction in accordance with the law. Fixed asset investment across the country increased by 25.8 percent for the whole year, 17.2 percentage points less than the first quarter. The growth of money and credit slowed significantly.

Efforts were focused on restructuring, and investment was increased in agriculture, water conservancy, energy, transportation, environmental protection and social undertakings. A 4,000-kilometer-long pipeline to divert natural gas from the west to the east was completed in its entirety and put into operation. Further progress was made on major projects such as the Three Gorges Dam Project, the West-to-East Electricity Transmission Project, the Qinghai-Tibet Railway, and the South-to-North Water Diversion Project. Coal production capacity was expanded by 120 million tons, installed power-generating capacity was increased by 50.55 million kilowatts, and an additional 1,433 kilometers of railways and 46,000 kilometers of highways were opened to traffic in 2004.

We continued to promote the development of the western region by starting construction on ten key projects involving investment of 80 billion yuan. The work of revitalizing Northeast China and other old industrial bases got off to a good start. With state support, 197 improvement or upgrading projects were undertaken. Work was begun to bring 15 sinkholes in coalmining areas under control.

Improved regulation of economic activities alleviated shortages of coal, electricity, petroleum and transportation. Effective measures were adopted to increase supply, curb irrational demand and balance supply and demand, thus ensuring that the needs of economic and social development and people's well-being were met.

3. Taking advantage of opportunities to move forward with economic restructuring and open wider to the outside world. We deepened reform of the grain distribution system and lifted all controls on the grain market. The reform of rural taxes and administrative charges entered a new stage of gradually phasing out the agricultural tax. Further progress was made in the reform of state-owned enterprises. A basic framework for the oversight and management system for state assets was established. The reform to turn state-owned commercial banks into stock companies progressed smoothly. The reform of rural credit cooperatives was extended to 29 provinces, autonomous regions and municipalities directly under the central government. A plan for reforming the investment system was formulated and implemented. We comprehensively implemented measures to reform the export tax rebate mechanism, and we cleared up all old outstanding accounts and did not allow any new ones to emerge. The VAT reform was begun in the old industrial base of Northeast China on a trial basis. We intensified efforts to rectify and standardize the market order, strengthened the supervision of food and drug safety and the protection of intellectual property rights, and resolutely cracked down on the manufacture and sale of counterfeit and substandard goods, tax evasion and fraud, smuggling and other illegal and criminal activities.

To fulfill the commitments we made when we joined the World Trade Organization (WTO), we continued to lower tariffs and opened more areas to foreign competition. We put into effect a revised Foreign Trade Law, lifted all controls over the right to engage in foreign trade, instituted a "go global" strategy and participated in regional economic cooperation. We smoothly implemented the Closer Economic Partnership Arrangement between the mainland and Hong Kong and between the mainland and Macao. China utilized 60.6 billion US dollars in foreign direct investment in 2004.

4. Increasing policy support and government spending to stimulate the development of all social undertakings. Governments at all levels increased their support for science and technology, education, culture, health and sports. Spending for these items amounted to 98.7 billion yuan from the central budget and 14.7 billion yuan from the sale of treasury bonds.

We strengthened the national innovation system and infrastructure development for basic research and for science and technology, as well as primary-level scientific and technological work. Continued progress was made on a group of major scientific and technological projects and the industrialization of new and high technologies. We organized over 2,000 experts to study and discuss a number of strategic issues bearing on the formulation of a national medium- and long-term program for scientific and technological development.

A new round of measures to implement the Action Plan for Invigorating Education was smoothly introduced, and we started to implement the plan to make nine-year compulsory education basically universal and to basically eliminate illiteracy among young and middle-aged adults in the western region. We increased support for compulsory education in poor rural areas, continued to renovate dangerous primary and secondary school buildings in rural areas, and provided free textbooks for more than 24 million students from poor rural families receiving compulsory education in the central and western regions. The development of vocational education was accelerated. Work in higher education was centered on improving quality. The financial aid system for college students from poor families was improved.

We accelerated the development of public health undertakings, focusing on building a national disease prevention and control system and a medical response system for public health emergencies. Construction on 1,410 county-level and 250 provincial- and city- (prefectural-) level disease prevention and control centers was basically completed, and construction on 290 emergency medical centers is underway. We intensified our work to prevent and control serious diseases. We put a lot of effort into building health facilities in rural areas. Pilot projects for a new system of rural cooperative medical and health care services progressed steadily. We adopted resolute measures to promptly halt the spread of highly pathogenic avian flu.

We promoted reform of the cultural system and development of cultural undertakings and strengthened supervision over the cultural market. Funds were appropriated in the central budget to support the construction of 533 county-level libraries and community centers, and radio and TV facilities in 40,000 villages. The development of major state cultural projects and the protection of natural, historical and cultural heritage sites were intensified. We had more cultural exchanges with foreign countries. Recreational sports activities flourished. The performances of Chinese athletes were outstanding at the 28th Olympics and the 12th Special Olympics.

We intensified our work relating to land and resources, environmental protection and ecological conservation. We strengthened protection of our arable land. Further progress was made in preventing and controlling pollution in key river valleys and regions. Positive results were obtained from trials of new ways of carrying out family planning work in rural areas.