We need to keep the overall situation in mind and firmly adhere to the following principles to ensure success in the work of the government this year. First is to maintain consistency in government policy and carry out fine-tuning as needed. We need to continue to properly exercise macroeconomic regulation, ensure continuity and stability in macroeconomic policies, maintain the correct orientation and strength of macroeconomic regulation, handle each case on its own merits, provide guidance tailored to the situation, and take specific measures to solve major problems in economic development.

Second is to always keep the big picture in mind and pay close attention to key areas. We need to correctly balance reform, development and stability, use reform and opening up to drive all aspects of our work, and strive to solve the major problems affecting the overall situation in order to promote all aspects of economic and social development.

Third is to take all factors into consideration in making overall plans and pay close attention to the well-being of the people. We need to continue to put people first, maintain the "five balances" [balancing urban and rural development, development among regions, economic and social development, development of man and nature, and domestic development and opening wider to the outside world, tr.], pay closer attention to balancing development between urban and rural areas and among regions, developing social programs, and promoting fairness and stability in society, and enable all our people to share in the fruits of reform and development.

Fourth is to stay firmly rooted in the present while looking ahead to the future. We need to do a good job of this year's work, gear our work to meeting the targets set in the Eleventh Five-Year Development Guidelines, strive to make progress, refrain from taking on more than we can handle, and achieve concrete results.

We need to focus on the following aspects of our work this year.

1. Maintaining fast yet steady economic development

Looking at the current international environment and domestic conditions, we can see that there are many conditions conducive to economic development this year. But there are also a number of problems that could hold back development, as well as some uncertainties. We need to adopt sound policies to deal with these problems and uncertainties to prevent large fluctuations in the economy.

We will keep macroeconomic policies stable, mainly by continuing to follow prudent fiscal and monetary policies. Since the economy is now performing well and there is a lot of activity in non-state investment, this year we will again appropriately reduce the deficit and the amount of long-term treasury bonds for development. We plan to issue 60 billion yuan worth of long-term treasury bonds, 20 billion yuan less than last year, while increasing regular construction investment from the central government budget by 10 billion yuan.

The deficit in the central government budget is projected to be 295 billion yuan, 5 billion yuan less than last year. Funds from the sale of long-term treasury bonds and budgetary investment will be mainly used to maintain adequate funding for key projects already underway and to fund an appropriate number of major new projects that impact on overall development in agriculture, forestry, water conservancy, science, education, culture, health, ecological improvement, environmental protection and development of the western region.

Starting this year, China will follow standard international practices by adopting the method of outstanding balance management for its national debt. We need to administer taxes in accordance with the law, improve tax collection and management, and standardize management of non-tax revenue. We need to take all factors into consideration in making overall plans for budgetary expenditures, limit expenditures to what we can afford, ensure adequate funding for key items and economize wherever possible. We will strengthen budgetary oversight and control the rise in administrative expenses.

We need to maintain appropriate growth of money supply and credit, improve the mix in loan portfolios and create new financial products. We need to increase credit support for agriculture, rural areas and farmers and for small and medium-sized businesses, employment, and students having difficulty paying educational expenses. Long- and medium-term credit should be kept at an appropriate level. We will improve the mechanisms for setting and transmitting interest rates. We will improve the system of managed floating foreign currency exchange rates and keep the Renminbi exchange rate basically stable at an appropriate and balanced level.

We will adhere to the strategy of expanding domestic consumption and focus on increasing consumption demand and strengthening the role of consumption in fueling economic development.