- Maintaining basic balance in international payments. Total imports and exports will grow roughly 7.5%, and the trade in services will develop more rapidly. Overseas investment will increase steadily. Total foreign investment in China will remain stable and its structure will be improved. The policies for promoting steady import and export growth will continue to produce effects, which will help boost business confidence and maintain stable growth of foreign trade. However, at the same time, competition in the international market is escalating, investment and trade protectionism is clearly reasserting itself, and China's export situation remains grave. We are thus under considerable pressure to consolidate and expand external demand.

To achieve these targets for economic and social development and do our economic work well in 2014, we must seek progress while ensuring stability and carry forward reform and innovation. To this end, we will continue to implement a proactive fiscal policy and a prudent monetary policy, constantly improve our methods and tools of macro control, and make controls more forward-looking, targeted and balanced.

We will continue to implement a proactive fiscal policy. The national deficit for this year is projected to be 1.35 trillion yuan or 2.1% of GDP, an increase of 150 billion yuan over last year's budget. Of this amount the central government deficit is 950 billion yuan, and the remaining 400 billion yuan is local government deficit in treasury bonds of the central government [xx please leave these xx alone for now]. Our policy priorities will be as follows:

First, we will improve the structural tax reduction policy by extending the trial of replacing business tax with VAT to more industries, extending preferential tax policies to more small businesses with low profits, and implementing fiscal and tax policies to encourage the development of annuities in business and industry retirement plans.

Second, we will improve the structure of expenditures. We will continue to focus on ensuring and improving people's wellbeing and give preferential treatment to agriculture, education, social security, health, environmental protection, and science and technology. We will strictly control our expenditures on official overseas visits, official vehicles, and official hospitality to cut administrative costs.

Third, we will use additional capital well, seek greater returns on assets on hand, develop a mechanism for clearing carryover funds on a regular basis, and use funds more through overall planning.

Fourth, we will strengthen management of local government debt, move faster to create a mechanism for local governments to borrow money mainly through issuance of government bonds, and work to put in place standardized, proper mechanisms for managing central and local government debts and giving early warning against debt risks.

We will continue to implement a prudent monetary policy. M2 is forecast to grow at around 13% this year. Our policy priorities are:

First, we will apply a combination of monetary policy tools, strengthen macro-prudential management, guide steady and appropriate growth in the supply of money and credit and the aggregate financing to the real economy, maintain proper liquidity, and create a stable monetary and banking environment.

Second, we will improve the allocation of financial resources, make good use of both existing and additional financial resources, and speed up the turnover of funds. We will encourage and guide financial institutions to increase their financial support for agriculture, rural areas and farmers, small businesses with low profits, and structural adjustments; and we will increase the ability of the financial services sector to serve the real economy and support industrial transformation and upgrading. We will diversify financial markets and products as well as market actors, and increase the proportion of direct financing.

Third, we will improve the mechanism for coordinating oversight and supervision efforts in the financial sector; tighten oversight over risks from credit, bonds, wealth investment products, interbank trading, trusts and similar businesses; and hold to the bottom line of making sure that no systemic or regional financial risks occur. We will keep a close watch on the cross-border flow of capital and prevent major shocks to economic and financial activities caused by the high-volume abnormal flow of capital. We will keep the RMB exchange rate basically stable at an appropriate, balanced level. < iii.="" major="" tasks="" for="" economic="" and="" social="" development="" in="">

This year we will do our work well in the following nine areas:

1. Comprehensively deepen reform and expand opening up

1) Reform of the administrative system. We will abolish or delegate to lower-level governments more items requiring central government review and approval, and set up a system for listing all items for which government review and approval must be retained and release the list to the public. We will move faster to establish a mechanism of coordinating management between government bodies at both the same and different levels and improve methods of government supervision. We will continue promoting the industrial and commercial registration system in which the practice of issuing an operating permit before a license is replaced with the practice of license first, operating permit second. We will carry out reform of the system for the use of official cars. We will conduct trials to separate industry associations and chambers of commerce from administrative bodies.