Han Zheng
Mayor of Shanghai

at the Third Session
of the Twelfth Shanghai Municipal People’s Congress
on January 18, 2005

 
Fellow deputies,

On behalf of the Shanghai Municipal People’s Government, I will now present to the Congress a report on the work of the Government for your review and for comments from the members of the Shanghai Municipal Committee of the Chinese People’s Political Consultative Conference (CPPCC) and other nonvoting delegates.

I. Review of the Government’s Work in 2004

The past year was an important one for Shanghai, as we embraced and put into practice a scientific concept of development, resolutely carried out the Central Government’s macro-economic control policies, vigorously implemented the strategy of revitalizing the city through science and education and promoted steady, sound and coordinated economic and social development. Under the leadership of the Central Committee of the Communist Party of China (CPC), the State Council and the CPC Shanghai Municipal Committee and under the guidance of Deng Xiaoping Theory and the important thought of Three Represents, all levels of government and the entire people of Shanghai worked together to put into practice the spirit of the Sixteenth CPC National Congress, the Third and Fourth Plenary Sessions of the Sixteenth CPC Central Committee and the Fourth and Fifth Plenary Sessions of the Eighth CPC Shanghai Municipal Committee. Through pioneering and down-to-earth work, we achieved all of the goals and targets set by the Second Session of the Twelfth Shanghai Municipal People’s Congress.

*Stable and sound economic growth was maintained. Shanghai’s GDP in 2004 grew to 744 billion RMB yuan, representing a 13.5% increase over the previous year calculated at constant prices, and making 2004 our thirteenth consecutive year of double-digit growth.
Rapid growth in fiscal revenue was achieved. The municipality’s fiscal revenue grew by 24.5% year on year.

*Investment in R&D and in environmental protection was increased. Total investment in R&D and in environmental protection was equivalent to 2.29% and 3.03% of GDP respectively.

*Employment promotion targets were achieved. A total of 608,000 new jobs were created. The urban registered unemployment rate decreased to 4.5%, the first drop in the past decade.

*Prices were kept stable. Consumer prices increased by 2.2% over the previous year.

*Urban and rural incomes were raised. The per capita disposable income of urban households and rural households grew by 12.2% and 10.2% respectively, the latter representing the largest increase since 1997.

Over the past year, we mainly carried out the following work:

We successfully maintained stable and healthy economic growth by implementing the Central Government’s macro-economic control policies. Aligning our thinking with the Central Government’s sound judgment of the economic situation and our actions with its macro-economic control policies and overall arrangements, we implemented the Central Government’s macro-economic control policies in a comprehensive, faithful and vigorous manner in accordance with Shanghai’s situation. Our resolve was firm, our measures effective, and our achievements significant.

We improved the quality and efficiency of the economy by combining the implementation of the Central Government’s macro-economic control policies with Shanghai’s economic restructuring drive. We implemented an action plan to accelerate the development of the modern services industry. This contributed to rapid recovery in the tertiary sector, which added 4.9 percentage points to its 2003 growth rate. We also formulated an action plan to stimulate the advanced manufacturing sector, and pushed ahead with the development of a number of industrial bases and key projects. This contributed to a 16.1% increase in the city’s industrial added value over the previous year, with the hi-tech sector accounting for 28.2% of total industrial output, and the profit of industrial enterprises surpassing 100 billion RMB yuan. We put into practice the spirit of the “No. 1 Document” on improving farmers’ livelihoods jointly issued by the CPC Central Committee and the State Council by implementing policies to increase grain production and raise farmers’ incomes. We adopted proactive measures to address the tight supply of coal, electricity, oil and transportation capacity, and thus ensured the normal functioning of the city for industry and residents alike. We worked actively on optimizing the structure of demand and promoted balanced economic growth driven by investment, consumption and export. To ensure healthy development of the property market, we capped demolition and relocation, accelerated the development of medium- and low-priced commercial housing and restricted the resale of forward delivery housing.

We achieved better coordination between sustained economic growth and the efficient use of resources by combining our implementation of the Central Government’s macro-economic control policies with institutional innovation. Shanghai implemented the Central Government’s strictest-ever arable land protection regime, strengthened land-use planning and management, scrapped or consolidated a number of development zones, initiated a system of “land use verification before project approval”, and put in place regulations for the administration of land reserves. We aligned industrial policy with energy policy, and phased out a number of enterprises and products with high consumption of energy and raw materials.

We kept investment growth in step with economic growth by combining our implementation of the Central Government’s macro-economic control policies with efforts to optimize the structure of investment. We strictly rescrutinized fixed asset investment projects, keeping or dropping projects based on their individual merits and giving priority to World Expo-related initiatives, industrial upgrading projects and investments in energy, transportation, environmental protection and the social sector. We thereby ensured an appropriate level of investment growth and more optimal allocation of investment. At the same time, we worked closely with the national financial regulatory agencies to strengthen credit management, to control and mitigate financial risks, and to promote the healthy development of the financial sector.

We safeguarded market order and maintained price stability by combining our implementation of the Central Government’s macro-economic control policies with strengthened market regulation. We put in place policies to ensure sufficient grain production and supply, and improved the modalities of our cooperation with Jilin, Heilongjiang and other provinces for the production and purchase of grain, so as to ensure adequate supply at stable prices. Market monitoring of key commodities was strengthened. Focusing on food and medicine safety, we stepped up our efforts to rectify and standardize market order.

We forged ahead with reforms to promote scientific and technological innovation and comprehensive development of the social sector. We helped scientific and technological innovation pick up speed by implementing Shanghai’s Plan of Action for Revitalizing the City through Science and Education. We improved the environment for innovation by building public service platforms, with the R&D public service platform already producing tangible results. We launched Shanghai’s first set of major applied research projects, aimed at finding solutions to technology bottlenecks in industry, and we elaborated policies to accelerate the commercialization of research outputs. From among the national-level major applied research projects established by the Ministry of Science and Technology, we identified areas for “Ministry-Municipality Research Cooperation” based on Shanghai’s priorities for economic and social development. We implemented an Intellectual Property Rights (IPR) strategy for Shanghai, strengthening our work in the IPR field. In addition, we worked hard to attract high-caliber human resources from home and abroad to build up a critical mass of returned graduates of foreign universities, and to both import and train locally professionals whose skills are in short supply.

We further reformed and developed our education system. Leveraging the momentum of the Municipal Education Conference, we mapped out a strategy for Shanghai’s education modernization process on the basis of in-depth research. Our strategy emphasizes an integrated approach to education reform and clearly spells out measures and targets for reforming and developing all types of education at all levels. We promoted the balanced development of compulsory education by reducing the excessive workload of primary and secondary school students and improving the facilities and quality of instruction in public primary and secondary schools in the ex-urban areas. While continuing to optimize the geographical distribution of higher education institutions (HEIs), we made further progress in building key disciplines in Shanghai’s HEIs and we implemented post-graduate education reforms. We accelerated the development of vocational education, in line with the requirements of the job market, and basically achieved our target of having one hundred well-developed secondary vocational schools in Shanghai.

In culture and the arts, our continued institutional reforms contributed to more rapid development and to a more prosperous and productive year. In 2004, Shanghai successfully hosted a number of important cultural and sporting events, including the China Shanghai International Arts Festival and Formula One Chinese Grand Prix. A number of new museums, popular science centers, community cultural facilities, fitness facilities were completed, and a host of public cultural events and fitness-for-all activities were organized across the city. Shanghai athletes performed brilliantly at the Athens Olympic Games. Our “Be a Courteous and Considerate Shanghainese” campaign promoted respectful behavior and civility citywide.

In the area of public health, we made enormous efforts to implement our three-year plans for developing Shanghai’s public health system and for building a healthy city. We built and put into operation a Municipal Public Health Center and a new laboratory building for the Municipal Center for Disease Prevention and Control. We increased investment in public health and in the prevention and control of communicable diseases, boosting per capita expenditure on preventive health services. We made free treatment available to tuberculosis patients and conducted free immunization programs for the children of migrant workers. We launched pilot projects to test new delivery models for community health services and upgraded 40 town/township clinics to meet defined standards, in order to strengthen health services at the community level and in the ex-urban areas. We also took strict measures to effectively curb SARS and highly pathogenic bird flu.

We improved Shanghai’s infrastructure and urban management, scaling up hubs, networks, functionality and environmental protection. Construction of the Yangshan Deepwater Seaport (Phase 1) progressed rapidly, with milestones in the construction of the port area, Donghai Bridge and the New Harbor City completed on schedule. We also made rapid progress on other major infrastructure projects, including the second phase of Pudong International Airport, the urban rail network, the expressway network, the Central Ring Road and the Shanghai South Railway Station. The Fuxing Road East Tunnel was completed and opened to traffic. The Shanghai section of the West-East Gas Pipeline Project and the second phase of the Waigaoqiao Power Plant were also completed. We further integrated our information infrastructure and enhanced the comprehensive service capacity of functional facilities.

Preparations for the World Expo 2010 entered full swing. Under the direct leadership of the State Council, an Organizing Committee and Executive Committee were established for the World Expo 2010 in Shanghai, China. The Registration Report of the World Expo 2010 Shanghai China was completed and is ready for submission. We zoned off the Expo site and made good progress in site planning and design. We tightened control over the development of land on the banks of the Huangpu River, and stepped up the development of key areas.

We took practical steps to improve urban management, focusing on enhancing city planning and tackling traffic congestion. The initiatives outlined at the Municipal Urban Planning Conference were translated into action. In the city’s central districts, we created more public space and green area and reduced both plot ratios and the total number of buildings (the “Two More, Two Less” Strategy). New construction projects were subjected to stricter regulation. In a major effort to reduce traffic congestion, we added infrastructure, stepped up control over traffic flows, and beefed up enforcement of traffic rules. Urban sanitation and environmental upkeep services underwent further market-oriented reforms, and the appearance of the city further improved as a result. The city was also better equipped to deal with disasters thanks to a new Emergency Response Coordination Center that was put into now in operation.

We spared no effort in our implementation of the city’s second Three-Year Plan of Action for Environmental Protection. Our ability to control water pollution improved with the addition of the Zhuyuan and other sewage treatment facilities. The city’s air quality improved as we switched to cleaner energy and enhanced dust pollution control. We closed down a number of heavily polluting production lines and enterprises, and made significant progress in the environmental clean-up of the Wusong and Taopu Industrial Zones. In order to reduce animal pollution, livestock and poultry farms in prohibited zones were shut down. A total of 1,240 hectares of new public green area were added to the cityscape. Our efforts to have the Dongtan Marsh in Chongming and Jiuduansha Island in Pudong listed as National Nature Reserves made headway, with positive evaluation results obtained from the State Review Committee on National Nature Reserves.

We forged ahead with reform and opening-up by making breakthroughs in institutional and procedural innovation. In the area of state-owned enterprises and state-owned assets, we pressed forward with reforms in an active yet prudent fashion. A number of state-owned holding companies and large enterprise groups, such as Shanghai Electric, Shanghai Nong Gong Shang Group, Shanghai International Port Group and Shanghai Automotive Industry Corporation (SAIC) were successfully restructured; and Shanghai Light Industrial International Group was streamlined through divestiture of its smaller subsidiaries. A new regulatory framework for state assets and SOE reform improved how regulatory oversight is exercised. Baosteel Group and SAIC made it into the Fortune Global 500. Our efforts to encourage non-public enterprises to participate in the restructuring of SOEs boosted the development of the non-public sector of our economy. We initiated reforms in the fiscal and taxation system, consolidating tax collection and administration agencies. We actively pressed ahead with the establishment of a credit system, with the official implementation of Shanghai’s Interim Measures on Personal Credit Information Collection and Management catalyzing the development of credit services.

We continued to support pioneering development and opening-up initiatives in Pudong. The functional infrastructure and favorable policies we put in place there helped Pudong attract a critical mass of both overseas and domestic financial institutions as well as regional headquarters and R&D centers of multinational corporations. A pilot project to strengthen synergy between the Waigaoqiao bonded area and port was carried out, so as to capitalize on Shanghai’s competitive advantages as a port city. Electronic customs clearance was also upgraded at Shanghai’s points of entry as an important trade facilitation measure. The total value of imports and exports that flowed through Shanghai in the last year reached 282.58 billion US dollars, more than one quarter of China’s total, and container throughput totaled 14.554 million TEUs. The Central Government’s policy on export tax rebates was put into effect, generating new growth areas in exports. The city’s exports in 2004 hit 73.52 billion US dollars, up 51.6% over the previous year. Within Shanghai’s exports, the proportion of hi-tech products and electrical machinery continued to increase. By offering better services, improving the investment climate and opening new sectors to foreign direct investment (FDI), Shanghai not only attracted more FDI but also made better use of investment inflows. In the year 2004 alone, actual paid-in FDI totaled 6.54 billion US dollars, for an 11.8% increase year on year. Through vigorous implementation of our “Go International” strategy, Shanghai companies also made new headway in winning contracts for overseas construction projects and in acquiring overseas corporations.

More deeply appreciating the need for Shanghai to serve the whole country, we strengthened our exchanges and cooperation with sister provinces and cities at multiple levels and in a variety of forms. A policy document titled Doing More to Serve the Whole Country: Ideas on Strengthening Shanghai’s Domestic Cooperation and Exchanges was elaborated. We keenly promoted synergies in the development of the Yangtze River Delta area and took an active part in the West China Development Strategy and in the revitalization of Northeast China and other old industrial bases. We increased our counterpart assistance to the provinces and cities with which we are twinned. The Hong Kong-Shanghai economic and trade partnership witnessed robust development.

We further promoted employment and improved the social security system in order to raise living standards. We carried out an ‘Employment for Ten Thousand People’ project, generating jobs for 67,000 people who had had difficulty finding work. We provided more support to those wishing to start their own business by creating an enabling environment for entrepreneurship and strengthening the provision of vocational skills training. We vigorously promoted employment of the surplus rural labor force in the non-agricultural sector, contributing to the creation of 153,000 new off-farm jobs. We improved conditions in the labor market by intensifying government supervision over labor protection.

We successfully launched a Worker’s Compensation Insurance Scheme and made improvements in the operations of the Urban Retirees’ Pension Fund with a view to achieving steady growth of the fund’s capital. We also increased the maternity benefit. An institutional framework for urban social insurance has basically been put in place, including old-age pension, medical care, unemployment, maternity and worker’s compensation benefits. The social security system for small towns has also been developed in an active yet prudent fashion, and has been warmly welcomed by rural residents in Shanghai’s ex-urban areas, 587,000 of whom are now covered under the scheme.

We increased assistance and relief to the needy. We provided top-up subsidies to farmers aged 65 or over whose monthly pension entitlement was less than 75 RMB yuan, directly benefiting 303,000 people. We reduced medical insurance costs across the board and put in place a community medical care mutual help program, thus making health care more affordable for urban residents. We also expanded the coverage of the rural cooperative medical care system, basically realizing universal coverage for eligible rural residents. We raised the minimum wage for enterprise employees and the allowance of some retired model workers. We strengthened synergies between social relief and employment promotion programs, helping needy families to improve their living standards through work. The number of households benefiting from our low-rent housing program increased to 13,500. We developed more facilities for the elderly, and improved the quality of services for senior citizens.

Practical measures were taken to promote community development, and the system of “two-tier government, three-tier administration and four-tier network” was refined. The Government improved its procedures for handling citizens’ suggestions and complaints, proactively forestalled and resolved disputes and conflicts among the people, and took comprehensive measures to keep law and order, thus maintaining social stability and harmony.

Fellow deputies, none of these achievements of the past year came easily. We attribute them to the correct leadership of the CPC Central Committee, the State Council and the CPC Shanghai Municipal Committee, to the devotion and hard work of the entire people of Shanghai, and to the support and supervision of the Municipal People’s Congress and the CPPCC Shanghai Municipal Committee. On behalf of the Shanghai Municipal People’s Government, I would like to pay tribute and express our sincere gratitude to all the hard-working and committed people of Shanghai and to all of you deputies of the People’s Congress and members of the CPPCC Shanghai Municipal Committee who have rendered great support to the work of the Government. I would also like to extend our heartfelt thanks to all the democratic parties and the Federation of Industry and Commerce and to people from all walks of life. Our gratitude also goes to all the departments of the Central Government, to our sister provinces and cities, and to the People's Liberation Army and People’s Armed Police troops stationed in Shanghai! In addition, I would like to express our sincere thanks to all our compatriots in the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan as well as overseas Chinese and foreign friends who care about and support the development of Shanghai!

Fellow deputies, we are clearly aware that many difficulties and challenges remain on the road ahead and that a number of inadequacies and weaknesses still exist in the government’s work. Our primary strategy of revitalizing the city through science and education has yet to be further implemented in some districts and some fields, and local capacity for independent innovation is not yet strong enough. Land resources are becoming an increasingly significant constraint; our modern services industry remains comparatively underdeveloped; and there is a relative lack of vitality in the development of the social sector. These have become major factors affecting our economic and social development at present. In the property market, while price increases have moderated citywide, there are some neighborhoods where prices are still rising too fast. A number of new, emerging issues in connection with the property market call for our serious attention. The demolition of old buildings and the relocation of their residents need to be further carried out in an orderly fashion in compliance with the law. In the central city districts, although traffic congestion has been alleviated to a certain extent, there is still a significant gap between the volume of traffic and the capacity of our roads; therefore, fundamentally resolving Shanghai’s traffic problems will require long-term efforts. Within the government, a style of work that is formalistic and bureaucratic continues to exist, to varying degrees in different departments. We have made efforts to promote professionalism and efficiency within our civil service, but there are still areas with which citizens are dissatisfied. Greater efforts are therefore called for in building a better government and redefining the role of government. These are not just challenges for Shanghai’s present development; if not addressed promptly and effectively, they will undermine Shanghai’s long-term development. In these areas then, we must be sober, vigilant and responsible; we must take these problems very seriously, study them carefully, and solve them effectively.

* All 2004 figures in this report are preliminary.

II. Major Tasks for 2005

This year is the last year of the Tenth Five-Year Plan period and an important one for moving forward with all-around preparations for the World Expo. In 2005, under the leadership of the CPC Central Committee with Comrade Hu Jintao as General Secretary and in line with Deng Xiaoping Theory and the important thought of Three Represents, we will put into practice the spirit of the Sixteenth National Congress of the CPC, the Third and Fourth Plenary Sessions of the Sixteenth CPC Central Committee, the Central Economic Working Conference and the Sixth Plenary Session of the Eighth CPC Shanghai Municipal Committee. In particular, we will fully implement the scientific concept of development and forge ahead with our primary strategy of revitalizing the city through science and education. With renewed energy and a pragmatic, pioneering spirit, we will focus on economic restructuring so as to improve the quality and efficiency of our economic growth. We will intensify our reforms and advance the opening-up process. We will overcome bottlenecks in the development of our systems and institutions and work to strengthen the weaker links. We will safeguard economic security, maintain a healthy momentum of sound and coordinated socio-economic development, and preserve social harmony and stability.

The main goals and targets for Shanghai’s economic and social development in 2005 are as follows:

* GDP growth of around 11%;
* fiscal revenue growth slightly more rapid than economic growth;
* an urban registered unemployment rate of around 4.5%;
* the Consumer Price Index (CPI) at 103;
* total R&D expenditure and investment in environmental protection equivalent to 2.4% and 3% or higher of GDP respectively;
* total energy consumption per 10,000 RMB yuan of GDP reduced to 1.02 tonnes of standard coal equivalent or lower;
* per capita disposable income of urban and rural residents raised by around 10% and 8% respectively; and
* full achievement of the goals of the Tenth Five-Year Plan, laying a solid foundation for development in the Eleventh Five-Year Plan period.

In order to achieve these goals and targets, we must apply the scientific concept of development in all aspects of economic and social development, and advance our work on all fronts on the basis of the primary strategy of revitalizing Shanghai through science and education. We must follow the principle that science and technology are the primary productive force and people are the primary resource. We must continue to foster public consensus and social cohesion. Our capacity for independent innovation must be strengthened. And coordinated and sustainable socio-economic development must be promoted on all fronts.

In the course of our work over the coming year, we must concentrate on the following six strategic priorities:

Promoting economic restructuring and shifting to a new mode of economic growth

Shanghai’s industrial development policy must give priority to the tertiary and secondary industries, with a special focus on promoting advanced manufacturing and modern services. We must speed up the upgrading and structural optimization of industry so as to improve the overall quality and the international competitiveness of Shanghai’s economy. We must expand consumption demand, maintain coordinated growth in investment, consumption and export, and achieve balance in terms of the speed, structure and efficiency of economic growth. Our industrial policy must become more focused, so as to encourage further development of those sectors in which Shanghai enjoys strong advantages, stabilize those sectors in which Shanghai is on par with other regions, and scale down those sectors in which Shanghai operates at a disadvantage. We must achieve better coordination between economic development on the one hand, and resource conservation and environmental protection on the other, by promoting sustainable patterns of production and consumption and actively developing an eco-efficient economy and a conservation-oriented city.

Intensifying reforms and opening wider to the world, so as to invigorate economic and social development

Carrying out further reforms is the fundamental solution to deep-rooted problems that hinder socio-economic development. Parallel efforts must be made to develop both the public and non-public sectors of the economy. We must seize every opportunity to push forward reforms and intensify institutional innovation, with a view to making breakthroughs in key areas and to giving full play to the fundamental role of the market in resource allocation. We must take full advantage of the opportunities in China’s post-WTO accession transition period and leverage Pudong’s first-mover advantage in development and opening-up. We must also participate in international competition and cooperation on a larger scale, in more areas and at a higher level, and strive to make Shanghai a more international city.

Strengthening social programs and services and promoting coordinated economic and social development

While maintaining rapid economic growth, we must continue to shift the focus of policy support and public investment towards social programs and services, so as to foster more rapid development of the social sector. We must continue to introduce market competition mechanisms, strengthen differentiated guidance and carry out supporting reforms in order to inject more vitality into the development of social undertakings. We must also continue to promote the balanced development of social programs and services in the urban and rural areas by pooling social resources under unified planning.

Making more contributions to the development of the whole nation, by doing a good job in our own development while proactively serving the whole country

While taking the lead in building a well-off society and achieving modernization, Shanghai must bear in mind the interdependence between the more developed and the less developed regions of China, viewing its future development in the broader context of the whole nation’s development drive. We must follow the principles of mutual complementarity, mutual benefit and coordinated development so as to create synergies between regions for common development and prosperity.

Caring for people’s well-being and maintaining social stability and harmony

We must continue to deliver on our commitment to putting people first. In this context, we must redouble our efforts to improve the people’s livelihood and to ensure in particular that the basic needs of the disadvantaged are met. We must also work harder to address practical issues that citizens care most about. More attention must be paid to the management of social affairs and to public services, and institutional innovations must be encouraged in this regard. Social equity must be achieved and safeguarded, so that all citizens stand to gain more tangible benefits from reform and development.

Balancing current and future interests in drafting the Eleventh Five-Year Plan

In the Eleventh Five-Year Plan, we must lay a solid foundation for the city’s long-term development. Planning must be based on careful analysis of this next five-year period in terms of its strategic opportunities and transitional characteristics and informed by in-depth research on critical issues of overall and strategic significance to Shanghai’s development.

This year, the Government will focus its work on the following ten priorities:

1. Promoting industrial upgrading and structural optimization and building an eco-efficient economy

In our drive to build up Shanghai’s overall service capacity, we will give priority to developing the modern services sector, so as to further improve the quality and competitiveness of our service industry. As part of our Action Plan for Speeding up the Development of the Modern Services Sector, we will carry out pilot projects in a number of areas to expand market access, break up monopolies and reduce sectoral fragmentation. The development of the modern services sector will be further accelerated through the introduction of foreign capital and private investment. The Government will vigorously promote the development of Shanghai as an international financial center and will actively support financial innovation and the development of national financial markets, including the money, securities and futures markets. We will continue to work closely with the national financial regulatory agencies so as to better control and mitigate financial risks and to promote the healthy development of the finance and insurance sectors. Leveraging Shanghai’s functional infrastructure investments, including the deepwater seaport, international airport and info-port, as well as national factor markets, the Government will vigorously develop the modern services sector, including modern logistics, information services and professional services, and will also stimulate growth in the conference and exhibition industry and in tourism. We will also actively develop Shanghai’s cultural and creative industries. We will implement our Action Plan for the Development of Commerce so as to boost commerce and trade. More planning guidance and policy focus will be provided with a view to creating an environment conducive to the development of the service industry.

The advanced manufacturing industry will be developed through the introduction, assimilation and adaptation of international know-how and through independent innovation. We will carry out our Action Plan for the Prioritized Development of the Advanced Manufacturing Industry and promote industrial upgrading through informatization. We will further enhance the core competitiveness of Shanghai’s industry by leveraging our major industrial bases, large enterprises, major projects and well-established brands. The development of electronics and IT, automobile manufacturing, petrochemicals, high-end steel and other pillar industries will be accelerated, with a focus on increasing technology content and achieving economies of scale. We will upgrade Shanghai’s equipment and plant manufacturing industry, focusing on turnkey power generation and rail transportation equipment. We will strengthen partnerships with Central Government enterprises based in Shanghai and build strength in strategic industries such as shipbuilding, aerospace and aviation. With a view to sustaining industrial growth in the future, we will foster emerging industries such as photo-electronics, software, modern biopharmaceuticals and new materials. At the same time, traditional industries will be upgraded through the extensive deployment of advanced technologies and applications.

The Government will actively promote economic eco-efficiency and resource conservation in Shanghai. Action plans will be developed for energy and water conservation and for the integrated utilization of key resources, putting a premium on the sustainable use of land, water, energy and important raw materials. Policies, regulations and standards will be developed to encourage energy efficiency and the integrated use of resources, and a consistent and coherent approach will be applied in resource conservation, integrated energy management and industrial policy. We will strive to create a culture of proactive compliance with respect to resource conservation and environmental protection. We will advocate clean production and explore new and more effective methods to increase resource productivity. By undertaking experiments in a number of key enterprises, sectors and zones, we will strive to become a pilot city in the national economic eco-efficiency program.

2. Promoting innovation and informatization

The Government will continue to implement Shanghai’s Plan of Action for Revitalizing the City through Science and Education and to enhance the city’s capacity for innovation in science and technology. Shanghai’s public service platforms will be further developed, putting a premium on sound operating mechanisms and robust functionality. The Government will formulate mid- and long-term plans for the development of science and technology. The scope of Ministry-Municipality collaboration will be expanded. We will take an active part in developing national-level applied research projects, national laboratories and national engineering centers, so as to bolster our research capabilities in both basic science and applied technologies, thus positioning Shanghai as a leader in hi-tech development. We will further improve procedures for the selection, execution and ex-post evaluation of major technology research projects and will aim at achieving results soon after projects are launched. Policies will be implemented to accelerate the commercialization of hi-tech research results. The Government will improve the enterprise-led innovation system with a view to increasing the independent innovation capacity of local companies. Strategic alliances will be strengthened between industry, academia and the research community and institutional reforms in research organizations will be intensified. In accordance with Shanghai’s Plan of Action for Strengthening the City through Human Resources Development, we will import, develop and leverage human capital in all fields and at all levels, and will create an enabling environment for high-level professionals and innovative teams. The Government will strengthen its work in respect of intellectual property rights and improve IPR protection. Popular science centers will also be further developed.

Information technology will be put into wider application in all aspects of the economy and society, so as to harness the power of IT as a driver of socio-economic progress. We will facilitate the development, consolidation, sharing and utilization of government information resources so as to take the e-government initiative farther forward. The functionality of social security cards, citizen’s e-mailboxes and other applications will be expanded as part of our drive to make more community and public services available online. The Government will upgrade the supporting service system for e-commerce so as to encourage more businesses to become IT-enabled and to promote the use of bankcards. The basic data platform of Shanghai’s urban geographic information system (GIS) will be further enhanced, to better support emergency response, intelligent transportation systems and land and housing administration, and to enable new integrated geographic information applications. We will strengthen the planning and integrated development of information infrastructure, and scale up the capacity of the Shanghai Supercomputer Center, Shanghai Internet Network Access Point and other facilities. The Government will put in place a classification system for the protection of information, an e-security testing and evaluation regime and a center for information security breach prevention and emergency response. The city’s informatization policies, regulations and standards will be further improved, so as to create a more dynamic environment for the deployment of information technology applications.

3. Promoting development of the social sector, with a view to achieving balanced socio-economic development

Education will continue to be modernized on the basis of experiments in comprehensive education reform in line with the direction set by the Municipal Education Conference. We will further consolidate competence-oriented education, promote the balanced development of compulsory education, and reduce the excessive workload of primary and secondary school students. Institutions of higher education will be spurred to achieve excellence through ongoing efforts to optimize their geographical distribution, to strengthen leading institutions and key disciplines, to accelerate the reform of post-graduate education, to improve the quality of instruction and to encourage specialization and differentiation. In conjunction with the Centenary Celebration of Fudan University, we will further the development of Yangpu Knowledge Innovation Zone. An open vocational education system will continue to be developed in line with the needs of the job market and the growing demand for knowledge workers. We will set up a more flexible and open system of continuing education, leveraging modern information and network technologies. An effective lifelong learning system will continue to be developed, so as to turn Shanghai into a learning city. The Government will promote the healthy development of private education. The education sector will be opened up further, with more international partnerships in program delivery and expanded enrolment of international students.

The cultural sector will be further developed through institutional reforms in line with the direction set by the Municipal Culture Conference. In accordance with Shanghai’s guidelines for cultural development and master plan for the construction of cultural facilities, we will develop a number of not-for-profit public cultural facilities, including community cultural centers and libraries, and other functional cultural facilities. The creation of original literature and art will be encouraged and public cultural activities with various themes will be organized to enrich life in the city. We will develop a well-regulated and orderly cultural market and accelerate the development of cultural industries, with priority on news and publishing, film and television, and Internet content provision. We will continue to support the development of philosophy and social sciences, which provide theoretical underpinnings to Shanghai’s modernization efforts.

In order to fully accomplish our three-year plans for developing a public health system and for building a healthy city, we must enhance public health, putting prevention first. The Municipal Public Health Center, an integrated institution with medical service, education and research functions, will be assigned a major role in this process. In order to further raise Shanghai’s capacity for handling public health crises, we must improve early warning, monitoring, prevention and control of highly infectious diseases under an operational regime comprising municipal and district/county-level disease prevention and control centers. The Government will strengthen regional public health planning and sector-wide administration with a special focus on the separation of administration from operation in municipal-level medical institutions. Non-public and overseas investment as well as international partnerships will be encouraged in the local health industry. We will continue to promote participation in sports and exercise so as to raise the level of physical fitness of our citizens. We will strengthen our efforts in the area of competitive sports and will deliver a great 48th World Table Tennis Championship, as well as other major sporting events.

We will continue to reform Shanghai’s public service institutions (PSIs). These reforms will follow the principles of overall planning, differentiated guidance, coordinated arrangements and careful execution. Different approaches will be taken to reform different types of PSIs: those with a mandate to deliver government programs will be transformed into program delivery agencies; those operating on a fee-for-service basis will be reconstituted as enterprises; and those that deliver not-for-profit services in the public interest will enjoy more flexible modalities of operation.

We will continue to promote ethics and good citizenship in society. Through a campaign themed on “Welcoming the World Expo with Courtesy and Consideration”, we will showcase and enrich the city spirit of Shanghai. We will conduct education and awareness campaigns on the importance of being honest and trustworthy and on the rule of law. We will continue to carry out our action plan for moral development in society, and will champion public morality, professional integrity and family virtues. We will strengthen character education for minors. We will put in place long-term, effective mechanisms to promote civic awareness and encourage respectful behavior.

4. Preparing for the World Expo and building modern infrastructure

We will make thorough preparations for the World Expo. World Expo registration procedures will be completed. Site plans will be further fleshed out, with a view to optimizing both use and after-use. Demolition, relocation and other aspects of initial site preparation will be carried out. Along the banks of the Huangpu River, we will develop more public activity spaces, complete the restoration of historical building exteriors along an extended section of the Bund, and advance the development of key zones on both sides of the river.

We will continue to speed up the construction of key infrastructure, focusing on hubs, functional facilities, and networks. We will comprehensively develop Shanghai’s capacity as an international shipping center, by completing on schedule and putting into operation the Yangshan Deepwater Seaport (Phase 1) and the Donghai Bridge, and by completing the second phase of the Deep Waterway Dredging Project on the Yangtze River Estuary. To rapidly develop Shanghai as an aviation hub, we will complete the construction of the second runway and advance the construction of the second terminal for Pudong International Airport. We will better interconnect the city’s urban transport system with external services so as to improve links into and out of the city and thereby enhance overall transportation efficiency. We will devote major efforts to the construction of our basic rail transport network and actively create conditions for the launching of a number of new rail transport projects. The city’s network of expressways will be basically completed. Cross-river transportation links will continue to be developed, and the Xiangyin Road Tunnel will be completed. Construction will continue on the bridge-and-tunnel project connecting Chongming Island with the city proper. We will step up the planning and development of inland waterways and improve the view along the riverfront, so as to give full play to the role of our inland waterway network in supporting navigation, contributing to environmental protection, and beautifying the city. We will enhance our energy security by developing a number of electrical power and liquefied natural gas (LNG) projects.

In order to ensure the health and stability of the property market, the Government will step up its regulation and control efforts, with a view to ensuring that the majority of new properties developed are non-luxury residential units to be owner-occupied by Shanghai residents. We will encourage the development of affordable housing mainly for relocated residents, expand the supply of non-luxury properties to meet the residential needs of citizens, and strive to bring total supply and demand basically into balance and to optimize the structure of supply. Our regulation and control measures will be improved, so as to satisfy consumption demand, regulate investment and curb speculation. We will actively develop the residential rental market, and explore new mechanisms to help low-income families rent apartments. We will further improve our housing-for-all program, keeping the rent of publicly-owned residential properties low and expanding the coverage of the low-rent housing scheme. We will continue with the comprehensive refurbishment of old housing stock, including fitting pitched roofs to flat-roofed housing and installing en-suite bathrooms and kitchens. We will maintain an appropriate scale of demolition and relocation and secure sufficient replacement housing for relocated residents; in particular, we will ensure that demolition and relocation proceed smoothly in preparation for the construction of rail transport lines, development of the World Expo site and redevelopment of dilapidated housing blocks. In order to make sure that the demolition and relocation process is open, fair, transparent, standardized and consistent with laws and regulations, we will put in place or strengthen safeguards in five areas: public notice requirements, procedures for hearing complaints, letters of commitment, investigation of reported malfeasance and regulatory oversight. We will also adopt strict measures to protect historical monuments and sites in Shanghai so as to preserve the city’s cultural heritage.
 
5. Protecting and improving the environment and further modernizing urban management

We will complete the implementation of our second three-year plan of action for environmental protection. In this context, we will address the root causes of problems, build up institutional capacity and enhance the efficacy of investment. We will intensify pollution control and environmental rehabilitation efforts, focusing on key projects, sectors and zones, so as to improve the overall quality of Shanghai’s environment. In order to realize our goal of making Shanghai an eco-city, we will formulate our third three-year plan of action for environmental protection against higher standards and benchmarks. We will strengthen integrated planning, land control and ecological conservation on Chongming Island and give greater policy support to turn it into an eco-island.

Our transportation development strategy will prioritize public transport. In the transportation sector, our principles will be to integrate long- and short-term planning, to put equal emphasis on construction and management, and to tackle problems at the root. Thus, we shall take an integrated, coherent approach that incorporates long-term strategy, medium-term goals and short-term plans, so as to effectively tackle traffic congestion. We will build up the road capacity in the central city districts by widening and clearing up secondary arteries and feeder roads, optimizing the road network and adding interchange hubs, parking facilities as well as bus lanes. Effective measures will be taken to prevent overly rapid growth in traffic flows. We will conduct road courtesy and safety campaigns to deter such behaviors as jaywalking, illegal parking and blocking traffic. We will strictly enforce traffic rules and punish violators in accordance with the law.

Urban planning and land management will be further strengthened. We will translate into action the initiatives outlined by the Municipal Urban Planning Conference and strictly implement our “Two More and Two Less” strategy. We will thoroughly research major issues in connection with urban planning; accelerate the formulation of all kinds of plans; and strengthen law enforcement in respect of urban planning. In this way, the guiding role of urban planning will be given full play in the development of the city. More outdoor sculptures will be placed around the city. We will improve planning and development of underground space. As required by the strictest land management system, we will strengthen land planning and management, supervise compliance, work out detailed procedures for “land use verification before project approval” and formulate land use standards for each sector and for development zone projects. All these measures will contribute to more rigorous land management and efficient use of land resources.

The Municipal Government will not only build new facilities but also improve its urban management capability. We will further reforms in urban sanitation and environmental upkeep by commercializing service provision and making integrated efforts to keep the city clean and beautiful. We will carry out further reforms in the urban transport and water sectors and reinforce law-based administration. We will improve work safety through better supervision and enhance our disaster preparedness through better emergency contingency plans and response capability.
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6. Deepening economic restructuring and breaking institutional bottlenecks

We must further reform the state assets management system and state-owned enterprises. Following the principle of “allowing multiple models and giving targeted guidance", we will diversify the shareholding structure of state-owned companies and those in which the state holds the controlling share. At the same time, we will nurture a number of big conglomerates with distinctive core competency and speed up the restructuring of small and medium-sized enterprises (SMEs). We must improve the performance of Shanghai-based listed companies. We will put in place a sound asset evaluation system, an open transaction system and a standardized decision-making mechanism. By leveraging the property rights market, we will facilitate the orderly transfer of state assets and thus channel state capital to strategic areas and industries in which Shanghai enjoys advantages. We will make distinctions between different types of state assets and carry out supervision and management accordingly. Explorative efforts will also be made to improve SOE income distribution.

We must vigorously promote the non-public sector of the economy. The main guidelines are to grant equal treatment, open more sectors, guide industry entry, make structural readjustments and provide innovative services. We plan to gradually level the playing field for businesses with different types of ownership in terms of investment and financing, taxation, land use, project tendering, etc. The non-public sector will also be encouraged to participate in the reform, restructuring and reorganization of SOEs and in the construction and operation of infrastructure facilities and public utilities. We will also establish a supporting service system and foster a favorable environment in which entrepreneurship and SMEs can flourish.

We will carry out further reforms to the investment system. We will work out plans and supporting measures to implement the State Council’s decision on investment system reform. We will reform the process of project examination and approval so as to empower enterprises to make independent investment decisions and strengthen the management of government investment.

We will reform the fiscal and taxation systems. The target model is to localize tax collection and share revenue between the municipality and the districts. We will roll out this model in more areas and consolidate institutions for tax collection and administration. Separate escrow accounts must be set up for the collection of extra-budgetary funds so as to improve our budget management. We will balance public spending and enhance budget and tax supervision. In the meantime, we will give stronger financial support to less developed districts and the county by means of transfer payments.

We will improve market order by addressing both the problems and their root causes. We will move fast to build a credit system with focus on expanded use of credit products. In government procurement and project tendering, we will collect and consolidate credit information and improve procedures for the use of credit products. In addition, we will develop a better legal framework for the credit market, a feasible mechanism for penalizing bad credit, and a well-regulated credit reporting industry. We will step up regulation to restore market order, highlighting food and medicine safety, and resolutely curb irregular practices that endanger public health and safety, undermine socio-economic development, or cause significant financial loss to citizens. We will support consumer organizations in exercising supervision and protect the legitimate rights and interests of the consumers.

7. Advancing Pudong’s development and opening-up and making Shanghai open wider and serve the whole country better

Pudong must continue to take the lead in institutional innovation and opening up. Capitalizing on accelerated international industrial migration, particularly in the service sector, we must enhance the magnet and beacon effect of key functional zones in Pudong New Area and turn it into the core component of Shanghai’s endeavor to build the city into an international economic, financial, trade and shipping center. In accordance with our “Focusing on Zhangjiang Hi-tech Park” strategy, we will make new breakthroughs in terms of upgrading industrial capacity, R&D capability, and incubation capability.

We must make better use of FDI. In line with our plan to build a “Headquarters Economy”, we shall continue to target multinational companies as a major source of FDI, attracting their manufacturing facilities, regional headquarters, R&D departments and procurement centers to Shanghai. In order to promote opening up in Shanghai’s service sector, we will introduce more large international players and prestigious brands into the local service market. The Municipal Government will improve its service and create a fair, just and open playing field, where SOEs, foreign-invested enterprises (FIEs) and private Chinese companies can develop side by side. At the same time, we will execute our “Go International” strategy and build our own multinationals and international brands by leveraging our comparative advantages and tapping into overseas resources and markets.  In addition, we shall do a better job in hosting international conferences and other international events so as to promote the economic, trade, technological and cultural ties between Shanghai and the rest of the world.

Shanghai should play a bigger role as a port city. By leveraging the synergy between the Waigaoqiao bonded area and port, we will press ahead with our “Efficient Customs” project and electronic customs clearance initiative, integrate relevant resources and improve port management system at local level so as to maximize our advantages as a port city. In our effort to optimize Shanghai’s exports mix, we will upgrade processing trade, enhance the quality, grade and added value of exports and increase the proportion of high-tech and electrical-machinery products. We will tap the full potential of our export processing zone, explore new export destinations and develop international trade in services. We will set up a sound functional mechanism to handle international trade disputes and make better use of international norms to develop ourselves and protect our interests.

We will better capitalize on Shanghai’s strong service capacity to serve the Yangtze River Delta, the Yangtze River Valley at large and the rest of China. In line with the national plan of cross-regional coordination, the Municipal Government will work closer with the rest of the Yangtze River Delta and all provinces and cities along the river to jointly develop the Yangtze River into a Golden Waterway. We must contribute to the West China development and to the revitalization of Northeast China and other old industrial bases, and set up a new mechanism for cooperation at multiple levels and in various forms. The Municipal Government will continue to assist our counterpart provinces and cities in poverty alleviation and economic and social development. We will also carry forward the Hong Kong-Shanghai economic and trade partnership.

8. Facilitating coordinated development between the central city districts and the ex-urban areas, and speeding up urbanization

We will promote coordinated development across all districts and the county by providing tailored guidelines and differentiated policies. On the basis of clearly-defined positioning and comparative advantages of the districts and the county, the Municipal Government will provide more industrial planning and policy guidance. We will build up the capacity of each district and county to leverage its resources and make important contributions to the socio-economic development of the whole city. In the process of urbanization, the Municipal Government will encourage farmers to move to the urbanized areas by actively yet prudently reclaiming rural residential land and appropriately merging villages and rural settlements. In addition, the government will speed up the clustering of industries in the ex-urban areas and the development of new bases for the advanced manufacturing industry, by improving policies and mechanisms for the development of industrial parks. Greater efforts will be made to improve infrastructure facilities in the ex-urban areas and to stimulate the development of nine selected towns, Songjiang New Town and small towns, so that these urbanized areas will attract more residents and industries.

We must ensure that rural residents’ income grows steadily. In line with the guidelines of “give more, take less, and allow flexibility”, we will set up a mechanism to protect the long-term interests of our rural residents. We will stabilize their agriculture-related revenue, raise their non-agricultural earnings, increase their income from social benefits and protect their property income, so that their total income can rise continuously. We will protect arable land vigorously to ensure sufficient grain production. Moreover, we will promote metropolitan agriculture for its economic, ecological and service benefits and move steadily towards agriculture modernization.

We will vigorously develop the social sector in the ex-urban areas. We will optimize the allocation of resources, upgrade underdeveloped schools and offer more vocational training programs to new labor market entrants and non-farming rural residents. We will also build more cultural facilities and improve public health services in the ex-urban areas.

We must continue to upgrade the comprehensive service capacity of the central city districts. Setting clear directions for industrial development and building upon the advantages of these urban districts, we will accelerate the development of a number of modern services zones, each with distinctive features. In the central city districts, we will encourage metropolitan industries resulting in expanded employment opportunities, and increase public space and green area leading to better environment.
 
9. Promoting community development and improving management of social affairs

In line with the principle of strengthening community institutions and introducing grid management, we will carry out pilot projects to turn our communities into well-managed ones that boast complete services, beautiful environment and harmonious atmosphere. Through the system of “two-tier government, three-tier administration and four-tier network”, we will delegate management responsibilities to the grassroots level to increase efficiency, inject vitality and bring real benefits to our people. Efforts will be made to expand the function of sub-district offices in managing social affairs and providing public services. We will empower neighborhood committees as community self-governance organizations and further promote resource integration in communities. We will improve the regulation of not-for-profit organizations and explore ways to establish an institutional framework to energize voluntary community services and other volunteer activities.

The Municipal Government will improve population management.  We will optimize the structure and geographical distribution of the population by encouraging population movement from the central city districts to the ex-urban areas. The local residence permit system and the housing rental administration will be further improved. By adhering to the principle of delegation and adopting an integrated and community-based approach, we will further localize the management of the migrant population. We must protect the legitimate rights and interests of migrant workers. We will continue to maintain a low birth rate, promote reproductive health and encourage pre-marriage physical checks, so as to improve newborn health. Effective measures will be taken to safeguard the legitimate rights of women and children, to provide equal employment opportunities for women and to protect adolescents.

The Municipal Government will strive to maintain social stability. To this end, we will develop better procedures to forestall conflicts among the people, become more responsive to public complaints and clearly define the responsibility of each competent government department in this regard. We will take various measures to settle disputes, and properly handle and gradually resolve inherited problems which people are concerned about. We will take an integrated approach to keep law and order and crack down on all kinds of crimes in accordance with law, thus effectively protecting the life and property of people.

10. Caring for people’s life and work and building a harmonious society

The Municipal Government will implement an active employment policy. We will expand employment opportunities by growing the economy, link industrial policy with employment policy, and shift our focus in employment promotion towards encouraging entrepreneurship and active job seeking, so that economic growth brings about employment expansion. We will implement policies conducive to entrepreneurship and self-employment, develop and support entrepreneurs, and offer more financial support to micro-finance guarantee and business start-up training programs, so that SMEs and micro-businesses enjoy a better environment and therefore generate more jobs. We will continue vocational training at multiple levels and rapidly develop public vocational training bases with a focus on improving the employability of those having difficulty in finding jobs. The program of “Employment for Ten Thousand People” will be carried forward to create jobs in the service sector for disadvantaged unemployed people. The district and county governments will be responsible and accountable for executing the program and setting up a flexible entry and exit mechanism. We will regulate the downsizing practice of companies to control the loss of jobs. We will also intensify our monitoring of the labor market in order to protect the legitimate rights and interests of workers.

We must further improve the social security system. The Basic Old-Age Pension Scheme for Urban Employees will be in better form. We will make fresh progress in the insurance scheme for small towns by expanding its coverage and giving priority to farmers whose land has been expropriated or requisitioned. The Municipal Government will drive forward reforms to achieve the coordination of medical services, pharmaceuticals and medical insurance and to improve the mechanism of its service procurement under the medical insurance scheme as well as oversight and administration in this regard. We will standardize primary care delivery and further community health care reforms by focusing on building the capacity of community health care centers, so that they can deliver most out-patient services and provide comprehensive primary care in a better way. The pharmaceutical distribution system will be further reformed in conjunction with medical service and medical insurance reforms to cut the inflated price of medicine. At the same time, we will consolidate and improve the rural cooperative medical insurance system to make farmers better insured. The Municipal Government will fine-tune its social relief policy to provide a sound safety net to disadvantaged groups while encouraging those among them who are able to work to improve their lives through employment.

We will give full play to the role of trade unions, the Youth League, women’s federations and other non-governmental organizations as bridges and bonds. We will continue to carry out in earnest work related to ethnic minorities, religious groups, overseas Chinese and Taiwan compatriots. We will take better care of servicepersons, veterans and their families and raise awareness of “National Defense by All”.

The Government will advance social welfare vigorously. We will encourage the non-governmental sector, through stronger policy incentives, to build and run care facilities for the elderly, so as to diversify the provision of care to seniors and better ensure their physical and mental wellbeing. We will make meticulous preparations for the 2007 Special Olympic World Summer Games. We must give greater support to people with disabilities, creating conditions for their equal participation in social activities. We will also enthusiastically support and promote charity, fostering a culture of solidarity, mutual assistance, caring for the poor and the needy, and a society of equality, fraternity and harmony.
 

III. Redefining the role of government, promoting law-based public administration, and building a government that is committed to service, accountability and the rule of law

It is our objective to build a government that is committed to service, accountability and the rule of law, in line with the requirement of governing for the people. In pursuit of this objective, we have worked over the past two years to redefine the role of government, to promote law-based public administration and to develop sound public institutions. In the year to come, in accordance with the requirement of the Fourth Plenary Session of the Sixteenth CPC Central Committee for the Party to strengthen its capacity for governance, we will take concrete steps to further improve the quality of governance in Shanghai, ensuring that public power is exercised in a manner that is scientific, democratic and fully consistent with the law.


1. Redefining the role of government

The Government must perform its functions in strict accordance with the law. While continuing to improve our management of the economy and to strengthen regulation of the market, we will place more emphasis on enhancing our management of social affairs and provision of public services.

The relationship between the government and the business must be further rationalized, with a view to enhancing business vitality. Focusing on those sectors where problems are relatively pronounced and citizens clearly want change, we will accelerate the process of separating government from business and public service institutions, and separating regulation from operation. The government will withdraw from areas in which direct public intervention is inappropriate or ineffective, defining its role as a regulator, not a hands-on manager, and recognizing that the proper participants in the market are enterprises. At the same time, we will continue to streamline administrative approval procedures and to improve the manner in which administrative approval requirements are administered, putting more emphasis on compliance monitoring, so as to increase the efficiency of administrative services and create a more favorable business environment.

The relationship between the government and the market must be further rationalized, so as to give full play to the fundamental role of the market in resource allocation. We will continue to develop a modern market system that is unified, open, competitive and orderly. We will upgrade the capacity of factor markets to promote market competition and the free flow of factors of production. In accordance with the principle of development amidst standardization and standardization amidst development, we will further promote the reform and development of intermediary organizations and trade associations, making the latter vehicles of industry self-regulation.

The relationship between the government and society must be further rationalized, to promote social equity and harmony. In order to strengthen the management of social affairs and the provision of public services, we will further shift the focus of the government’s work and channel more policy and fiscal support towards developing the social sector, building infrastructure, protecting and improving the environment, promoting employment, developing the social security system, and improving the livelihood of the disadvantaged.

2. Promoting law-based public administration

The Government must vigorously implement the Guidelines on Promoting Law-based Public Administration issued by the State Council. All departments must exercise their powers and perform their duties in strict accordance with the scope of their authority and the procedures prescribed by the law. All government personnel must learn how to handle economic and social matters in accordance with the law.

As an important law regulating government conduct, the Administrative Licensing Law of the People’s Republic of China must be strictly implemented by all levels of government. We should take the implementation of the Administrative Licensing Law as an important opportunity to carry out fundamental reforms to shed functions that we inherited but that should not be performed by the government, to abandon administrative practices that have long been taken for granted but that are not in line with the demands of a market economy, and to remove the institutional obstacles and bottlenecks that have long eluded reform. Last year, as part of a major review initiative in compliance with the Administrative Licensing Law, we removed 102 administrative license requirements, more than halving the original total. At the same time, we put in place necessary measures to avoid any regulatory vacuum. This year, we will review and evaluate the implementation of the Administrative Licensing Law. Revenue items linked to administrative licenses will be subjected to further scrutiny and rationalization. The number of activities for which administrative licenses are required will be further reduced. We will put in place supporting regimes, including procedures for creating a requirement for an administrative license, for administrative licensing implementation and for compliance monitoring, which will be strengthened significantly.

Shanghai’s government information disclosure program will be actively developed. Last year, the Municipality enacted Government Information Disclosure Rules, targeting 15 government agencies that are vested with substantial powers and whose work has a strong bearing on the welfare of society and is therefore of great interest to the general public. These agencies were required to enhance their disclosure of information in accordance with the law, so as to increase the transparency of the government’s work. This year, we will continue to promote the comprehensive, sound and orderly development of our government information disclosure program, by expanding its scope, developing supervision and evaluation systems, improving access and user-friendliness, and further developing the government department spokesperson system. We will administer the economic census conscientiously, so as to provide reliable data for economic decision-making.

Shanghai’s integrated law enforcement system will continue to be improved. Putting priority on the cultural market, urban management and economic affairs, the Municipal Government will build and develop a law enforcement system that features clearly defined powers and responsibilities, uniform standards of conduct, effective oversight, and adequate resources, so as to promote strict, fair and professional law enforcement. Last year, in accordance with the uniform requirements of the Central Government, we improved integrated law enforcement in the cultural sector and strengthened regulation of the cultural market. In urban management, we also expanded integrated law enforcement from the ten original pilot districts to all  districts and the county in the municipality. This year, we will continue to make progress by further promoting integrated law enforcement in urban management at the municipal level and widening the scope of integrated law enforcement both in the cultural sector and in urban management. Efforts will be made towards establishing an integrated specialized regulatory regime for food safety, covering both food distribution and consumption. Shanghai will thus consolidate resources, improve procedures and standardize conduct in law enforcement.

3. Improving government work systems and operating mechanisms

The operations of the government must be standardized and efficient. Strictly following sound operating procedures, we must put into practice, and continue to improve, scientific and democratic decision-making mechanisms, standardized and orderly execution mechanisms, and fair and transparent supervision mechanisms, so as to put the work of the government on a track of institutionalization and standardization.

The policy formulation process must be improved by integrating public participation and expert evaluation into government decision-making. Over the last two years, we conducted proactive trials in the context of major plans, projects and policies, extensively soliciting views from deputies to the Municipal People’s Congress, members of the CPPCC Shanghai Municipal Committee and the general public, and organizing evaluations by panels of experts. We also conducted public hearings on adjustments to utility prices and other matters that are closely related to the people’s interests. This year, we will further improve our rules and procedures for the formulation of important policies, such as for making collective decisions on major issues, for soliciting opinions from experts, for keeping the public informed and holding public hearings, and for accountability in policy-making. All major policies must be decided collectively on the basis of in-depth research, broad-based consultation and full evaluation by experts. We must make a long-term commitment to these principles and procedures as a basic system for government work. At the same time, we must also put in place sound policy evaluation mechanisms to facilitate timely policy adjustments and improvements and to ensure that policymaking is continually made more scientific and democratic.

Policy implementation must be improved by better balancing power and responsibility. We must enhance the accountability system in government work such that all powers come with responsibilities, those who exercise power are subject to supervision, those whose rights have been infringed upon are compensated, and those who break the law are prosecuted. The government’s working methods and procedures must be further improved on the basis of a clearly defined division of work and responsibilities, as well as a commitment to teamwork and results, so as to ensure that all aspects of the government’s work are carried out in a vigorous, orderly and effective fashion.

Robust supervision mechanisms must be put in place. Since all powers of the government are bestowed by the people, the government must be accountable to the people, act in their interests and accept their oversight. The Municipal Government is committed to reporting on major aspects of its work to the Standing Committee of the Municipal People’s Congress on a regular basis, and to improving the channels of communication with and proactively accepting the supervision of the Municipal People’s Congress and its Standing Committee. We are also committed to reporting on major aspects of our work to the CPPCC Shanghai Municipal Committee in a timely fashion and to accepting its democratic oversight. We will conscientiously listen to the opinions of the democratic parties, the Federation of Industry and Commerce, persons without party affiliation and non-governmental organizations. We will accept the scrutiny of the press and of the general public. We must take seriously the people’s oversight of government agencies and their staff through administrative review procedures, administrative litigation and other legal channels. We must also strengthen internal supervision by supporting the government’s supervisory and audit functions in their independent exercise of oversight in accordance with the law. Law enforcement supervision and performance and financial auditing must be carried out in earnest, focusing on important aspects of the work of government and hot issues that the public is concerned about.

4.  Fostering high ethical standards in government and developing a strong civil service

We must embrace a culture of integrity and result-orientation. We must adopt a scientific concept of development and a correct understanding of how to appraise our own performance. We must be committed to people-centered governance, to strict self-discipline, and to being good servants of the people. Our powers must be used to benefit the people; our hearts must be with the people; and our every effort must seek to advance the interests of the people.

In all of its work, the government must proceed from the actual situation and respect objective rules. All our undertakings must stand the test of practice, the test of examination by the people and the test of history. We must make real improvements in our style of work, cutting down on meetings and red tape to spare more time for research at the grassroots level.

We pledge to build a clean government and fight corruption. To this end, we will take a comprehensive approach to tackle both the problems and their root causes, focusing on prevention in addition to punishment. We will put into place a sound system for punishing and preventing corruption, with equal attention paid to education, institutions and supervision. Bent on rectifying misconduct that undermines the essential interests of the people, we will take practical measures to put an end to improper behavior in the government and in business.

We must build a civil service that is politically reliable and professionally competent, that is clean, dedicated, and efficient. All of us must observe the Constitution and the law, and must keep learning to heighten our political awareness, professional competence and ability to administer according to the law. We must be loyal to duty and committed to service; we must practice industry and frugality; we must remain modest and prudent, and continue to live plainly and work hard. We must be able to rise up to challenges and achieve tangible results through down-to-earth work. All government employees, particularly those in leading positions, must be caring, committed, effective and diligent in serving the people. We must build up our capacity to resolve difficulties, overcome bottlenecks and deliver results. Act by act, deed by deed, we shall work passionately, assiduously and effectively to safeguard, fulfill and advance the interests of the people.

Fellow Deputies,

In this new year, we are faced with a new situation, new tasks and new requirements. We are keenly aware of the heavy yet lofty responsibilities we bear. The trust and support that the people have given to the government is an inexhaustible source both of strength and of conviction that we will succeed in our endeavors. Under the leadership of the CPC Central Committee with Comrade Hu Jintao as General Secretary and the CPC Shanghai Municipal Committee, and holding high the banners of Deng Xiaoping Theory and the important thought of Three Represents, we shall rely on the entire people of Shanghai to take the lead in building a well-off society on all fronts and basically achieving modernization, to build our city into an international economic, financial, trade and shipping center, and to achieve greater success.