Full Text: Report on China's economic, social development plan(10)

II. Overall Requirements and Major Objectives for Economic and Social Development in 2012

When doing this year's economic and social development work, we must fully implement the guidelines adopted at the Party's Seventeenth National Congress and the third through sixth sessions of the Seventeenth Central Committee; take Deng Xiaoping Theory and the important thought of Three Represents as our guide; and thoroughly apply the Scientific Outlook on Development. We need to continue to follow a proactive fiscal policy and a prudent monetary policy; ensure the continuity and consistency of macroeconomic policies; and make our macro-control more targeted, flexible and future-oriented. We will continue to correctly handle the relationship between maintaining steady and robust economic development, restructuring the economy and managing inflation expectations, and accelerate the transformation of the pattern of economic development and economic restructuring. We will strive to boost domestic demand, strengthen independent innovation as well as energy conservation and emissions reduction, deepen reform and opening up, and ensure and improve the people's wellbeing, so as to maintain steady and robust economic development, keep the overall price level basically stable, safeguard social harmony and stability, and greet the coming Eighteenth National Congress of the CPC with outstanding achievements in economic and social development.

In view of the above overall requirements and what is needed versus what is possible, and in conformity with the Twelfth Five-Year Plan, we have set the following major objectives for economic and social development in 2012.

-- Maintaining steady and robust economic growth. China's GDP will grow by 7.5%, 0.5 percentage points lower than last year. In setting this target, we have mainly taken the following factors into account. First, we have considered changes in the trends in the economies of both China and other countries and their growth rates. The global financial crisis continues to profoundly impact the world economy, and we face arduous tasks at home in maintaining steady economic growth, keeping prices stable, and transforming the pattern of economic development, so to set this year's growth rate properly lower better reflects these economic trends. At the same time, 7.5% is still a comparatively high rate after we consider the overall size of our economy and the unfavorable external conditions, and we need to work very hard to attain it. Second, this target is the first step toward the goal of GDP growth, as set in the Twelfth Five-Year Plan, and by setting it we will guide all localities to focus their work more on restructuring the economy, transforming its development pattern, and improving the quality and effect of its growth. Third, after fully considering the bearing capacity of resources and the environment, we believe a growth target properly lower than that of 2011 is conducive to easing the ever-growing resource and environmental constraints on economic development and alleviating serious conflicts in the country's economic activities.

-- Improving and upgrading the economic structure. We will continue to increase government spending on science and technology and further increase spending on R&D as a percentage of GDP; develop agriculture steadily and increase supply of agricultural products; energetically develop strategic emerging industries, promote deep fusion of informationization and industrialization, and make continued progress in transforming and upgrading traditional industries; accelerate the development of the service sector and raise its value-added contribution to GDP; and intensify efforts to conserve energy and reduce emissions in order to reduce energy consumption per unit of GDP by about 3.5%, decrease the intensity of carbon dioxide emissions by a bigger percentage, cut chemical oxygen demand and emissions of sulfur dioxide both by 2% and total ammonia nitrogen by 1.5%, and stop the emissions of nitrogen oxide from increasing. Our main consideration in setting these targets is that developments and changes in the domestic and international economic environments have caused quite a few difficulties and challenges to the country's economic development, which, in effect, pressure us to carry out economic restructuring. We need to take scientific development as the theme and accelerating transformation of the pattern of economic development as the main thread of our work; promote industrial upgrading by relying on scientific, technological and institutional innovation; promote higher-level, coordinated development of primary, secondary and tertiary industries; improve the incentive and restraint mechanisms for energy conservation and emissions reduction; greatly deepen economic restructuring; and make development more balanced, coordinated and sustainable.

-- Keeping the overall price level basically stable. We will keep the CPI increase around 4%, lower than the actual increase in 2011. We have mainly considered the following factors when setting this target. On the one hand, currently, aggregate supply and aggregate demand in China are basically in equilibrium and there is an ample supply of most products -- grain in particular, as a result of eight consecutive years of increase in grain production, and all this has provided the material basis for keeping the overall price level basically stable. Furthermore, short-term factors causing prices to rise excessively fast are having less effect, and the carry-over effect of the CPI increase at the end of last year will contribute about 1.1 percentage points to this year's CPI growth rate, which is smaller than last year. On the other hand, prices for factors of production are on a trend of long-term increase, and rising costs will inevitably continue to drive up prices of products; the effect of imported inflation cannot be underestimated due to the continued existence of abundant global liquidity; and, we also need to leave space for alleviating price irrationality and pressing ahead with price reforms.