In order to build a new socialist countryside, we must comprehensively carry out overall rural reform. This year, we will completely rescind the agricultural tax throughout the country, a tax that China has been collecting for 2,600 years. This is a change of epoch-making significance. The reform of rural taxes and fees has greatly benefited farmers by eliminating 33.6 billion yuan of agricultural tax, over 70 billion yuan in the form of the "three deductions" [for public reserve funds, public welfare funds and management fees, tr.] and the "five charges" [charges for rural education, family planning, militia training, rural road construction and subsidies to entitled groups, tr.], assessments for rural education and other unreasonable fees. Starting this year, the government will appropriate over 103 billion yuan annually to ensure the normal operation of town and township governments and meet the needs of rural compulsory education. This figure is comprised of more than 78 billion yuan in transfer payments from the central government budget and over 25 billion yuan from local government budgets. It must be pointed out that after the agricultural tax is completely rescinded, the task of consolidating the results of the reform of rural taxes and fees and furthering the reform will remain very difficult. The key to success is to comprehensively carry out overall rural reform, including deepening reform of government bodies in towns and townships, rural compulsory education, and county and township fiscal management systems. These reforms require adjustments in rural production relationships and directly involve changes in the rural superstructure, which makes such changes profoundly significant and difficult to achieve. However, we must unwaveringly implement them.

The building of a new socialist countryside is a long-term arduous task. We need to proceed from reality, take measures suited to local conditions, give guidance tailored to the situation and plan carefully. We need to respect the wishes of farmers, oppose formalism and coercion, and avoid the herd mentality. We need to advocate a spirit of self-reliance and hard struggle, be realistic and pragmatic, and work diligently.

3. Intensifying efforts to restructure industries, conserve resources and protect the environment

Restructuring and upgrading industries, which are our major means for improving the pattern and quality of economic growth, constitute a pressing task. First, we need to upgrade industries and improve industrial technology. We will accelerate the development of advanced manufacturing, new and high technology industries, and modern services, while continuing to improve basic industries and infrastructure such as transportation, energy and water conservancy. We will promote the application of information technology in the economy and society. The key to improving the technology used in industries lies in comprehensively improving our capacity for independent innovation. We need to promptly develop core technologies and improve systems integration in some important industries and create technologies, products and standards for which we own intellectual property rights. The main measures we will adopt are: We will strengthen the role of enterprises to make them the main source of independent innovation and build a market-oriented system for technological innovation that integrates the efforts of enterprises, universities and research institutes. We will energetically pursue a name brand strategy by encouraging development of famous brands for which we hold intellectual property rights. We will strengthen the system for protecting intellectual property rights and intensify law enforcement in this area. We will improve the mechanisms for encouraging independent innovation and adopt fiscal, tax, banking and government procurement policies that support enterprise innovation. Finally, we will improve the market climate, promote risk investment for business startups, and help small and medium-sized enterprises improve their capacity for independent innovation. Second, we need to restructure some industries that have surplus production capacity. To do this, we will use a combination of economic, legal and necessary administrative means, and take full advantage of the role of market forces. The main measures we will adopt are: We will earnestly implement all industrial policies, make the requirements for market access more rigorous, and control expansion of production capacity. We will support corporate acquisition and reorganization and joint production agreements between enterprises, and encourage competitive enterprises to grow stronger and larger to increase concentration in industries. We will, in accordance with the law, shut down enterprises that use resources destructively, contaminate the environment, or do not meet production safety standards, and close down outmoded production facilities. We will make proper and efficient use of existing production capacity by restructuring investment and expanding consumption demand. This work has wide implications and involves policy considerations, and it needs to be done in an energetic yet orderly way.