Official Statement on the 2011 Central Economic Work Conference

President Hu Jintao， Premier Wen Jiabao，

top officials from the central bank， finance ministry and economic planning agency as well as provincial officials attended the Central Economic Work Conference， held in Beijing from 12 to 14 December 2011. Their conclusions serve as a work plan for various government agencies and are announced through short statements.

The following is a translation of the report on the meeting by official Chinese news agency Xinhua.

In his important speech delivered at the conference， Hu Jintao analyzed the current international and domestic situation in an all-round way， profoundly expounded on the major economic issues that must be successfully tackled in 2012 and for some time to come， and put forward in clear-cut terms the overall requirements， policy guidelines， and main tasks of the economic work in 2012. In his speech， Wen Jiabao made a comprehensive review of the economic work 2011 and spelled out the main objectives， tasks， and major issues concerning the economic work in 2012.

Achievements made in 2011

The conference pointed out: In 2011， the starting year of the 12th Five-Year Program， the party Central Committee and the State Council united and led the people of all ethnic groups in China to firmly grasp the theme of scientific development concept and to seize the thrust of accelerating the transformation of the mode of economic development; strengthen and improve macro-management; correctly handle the relationship between maintaining steady and relatively fast economic development， readjusting the economic structure， and managing the anticipated inflation; and promote the orderly shift of the economy from one that relies on policy stimulus for growth to one that grows naturally without external stimulus. As a result of all this， the national economy has been developing in the anticipated direction of macro-management with a strong momentum toward faster growth， price stability， better economic returns， and improved livelihood for the people.

From a general perspective， in 2011 China scored new achievement in socialist economic construction， political construction， cultural construction， and social construction as well as in building ecological civilization and in party building and realized a good beginning for the 12th Five-Year Program.

Challenges facing the Chinese economy

The conference stressed: While fully affirming achievement， we must also soberly realize that the contradictions and problems of imbalance， incoordination， and unsustainability in China’s economic development are still quite prominent， there is downward pressure on economic growth and there is pressure of rising commodity prices; some enterprises are experiencing difficulties in production and operation; the situation in energy saving and carbon emission reduction is grim; and there are hidden risks in the economic and financial spheres that cannot be ignored. We must remain sober-minded， and we must step up risk assessment， prepare contingence plans as early as possible， and adopt prompt measures to effectively defuse the risks.

Analysis of the global economic situation

The conference held: Since the beginning of 2011， worldwide economic growth has slowed down， the rise of the international trade has dropped， the international financial market has been experiencing violent turbulences， and risks of all kinds have clearly multiplied. In 2012， as we look at it， the overall global economic situation will remain extremely grim and complicated， with rising instability and uncertainty in worldwide economic recovery.

Countermeasures against the current economic environment

The conference pointed out: In the face of the complicated， volatile international political and economic environment and the new developments and new changes in the operation of the domestic economy， we must continue grasping the theme of the scientific development concept and the thrust of the accelerated transformation of economic development mode， firmly focus on expanding the strategic base of domestic demands， put the emphasis of the expansion of domestic demands more on safeguarding and improving the people’s livelihood， accelerating the development of service industries， and increasing the living standards of the middle- income group. We must firmly grasp the development of real economy， which constitutes the strong foundation of the economy， and strive to create a social climate characterized by working in a down-to-earth manner， starting an undertaking through diligent work， and getting rich by running real businesses. We must firmly grasp the powerful motive force of accelerating reform and innovation， seize the opportunities to achieve breakthroughs in some key areas and links as soon as possible， strive to increase the ability to make original innovation， make constant efforts to enhance integrated innovation， and absorb and re-innovate imported technologies; firmly grasp the fundamental purpose of safeguarding and improving the people’s livelihood; increase financial input; earnestly carry out important and major tasks related to the people’s livelihood; and pay attention to raising the level of tolerance in the process of development.

Requirement for economic work in 2012

The conference stressed: 2012 is an important year for implementing the 12th Five-Year Program as it connects what has been done in the preceding period with what needs to be done in subsequent years， and our party will hold its 87th national party congress.

The conference proposed that the general requirement for the economic work in 2012 is as follows: continue to implement a proactive fiscal policy and a prudent monetary policy; maintain continuity and stability of the macroeco-

nomic policy; make macro-management more target-specific， flexible， and forward-looking; continue to handle well the relationship between maintaining stable and faster economic development， readjusting economic structure， and managing anticipation of inflation; push forward the transformation of economic development mode and economic structural adjustment at an accelerated pace; strive to expand domestic demands; strive to enhance independent innovation and energy saving and carbon emission reduction; strive to deepen reform and opening up; and strive to safeguard and improve the people’s livelihood; maintain economic stability and faster development as well as the basic stability of the general price level; maintain social harmony and stability.

The conference held: To push forward the economic and social development in 2012， we must lay stress on grasping the general work guideline of seeking progress amid stability. “Stability” refers to maintaining the basic stability of macroeconomic policies， maintaining steady and fairly rapid economic development， maintaining the basic stability of the general price level， and maintaining overall social stability. “Progress” refers to continuing to seize and make good use of the period of strategic opportunities， making new progress in changing the development mode， scoring new breakthroughs in deepening reform and opening up， and achieving new results in improving people’s livelihoods.

Major tasks for economic work in 2012

1. Strengthen and improve mac- roeconomic regulations and maintain stable and healthy economic development

- Adopt proactive fiscal policies and prudent monetary policies to prevent economic risks;

- Continue with structural tax reduction， step up investments to improve people’s livelihood and tighten management of local government debts;

- Fine-tune monetary polices according to economic situations， optimize the credit structure and fend off financial risks;

- Increase investment in agriculture， farmers， rural areas and affordable housing construction， and continue supporting technology innovation， environment protection， strategic emerging industries and key infrastructure projects.

2. Reinforce supplies of agricultural products

- Increase subsidies to agricultural productions and bump up the minimum purchase prices of grain;

- Tighten rural infrastructure construction， including irrigation projects， roads and grids;

- Strengthen efforts to promote rural compulsory education and secondary vocational education， and expand coverage of the new rural social pension system.

3. Speed up economic structural adjustments

- Encourage consumption and increase income of residents， especially poorer population;

- Propel innovation， protect intellectual property rights and sharpen industrial competitiveness;

- Cut back on outdated indus- trial capacities， promote mergers and acquisitions， develop new energies， stimulate the modern service sector， invigorate the cultural industry and enhance energy conservation and emission reductions.

4. Deepen reforms and further open up to the outside world

- Push forward the value-added tax reform and the pilot program of property tax， reform the resource tax system and research on the environment protection tax reform;

- Deepen market reforms of interest rates， further reform the yuan exchange rate regime and ensure basic stability of the yuan;

- Maintain steady growth of exports， upgrade export structure， expand imports and seek trade balance;

- Attract foreign investments to the central and western regions， widen outbound investments and fight against protectionism in any form.

5. Improve people’s livelihood

- Increase the quality of education， promote employment and support labor-intensive industries and small and micro-sized enterprises;

- Improve the social safety net， expand pension systems and help migrant workers in employment， housing， medical health and education of their children;

- Tighten funding， construction， operation and management of affordable housing projects， adhere to control measures of the real estate markets， bring house prices back to a reasonable level， expand supplies of commercial houses and promote healthy development of the property markets.