8. Great success was achieved in fighting devastating natural disasters.

When parts of south China were hit with severe snow and ice storms at the beginning of the year, all localities and sectors, in accordance with the unified arrangements made by the central authorities, immediately set emergency response mechanisms in motion, did everything in their power to ensure transport, power supply and people's livelihood, and restored agricultural and industrial production as well as disaster-destroyed infrastructure in a short period of time. In the wake of the massive earthquake that hit Wenchuan, Sichuan Province on May 12, the whole nation was quickly mobilized. Forces of all kinds, including members of the People's Liberation Army, the Armed Police Forces, the militia, reserve forces, and public security personnel, as well as health workers, journalists, scientists and volunteers, responded promptly. Compatriots in Hong Kong, Macao and Taiwan and overseas Chinese made generous donations. The international community offered us a helping hand. Together, we achieved a great victory in the fight against the earthquake and wrote a moving, heroic paean memorializing our brave efforts. We pulled 84,000 survivors from the rubble, provided medical treatment to 2.96 million people who were injured or fell ill, and delivered aid to a total of 10.584 million people affected by the earthquake. In order to rebuild the disaster areas more effectively, the Regulations on Post-Wenchuan Earthquake Recovery and Reconstruction were formulated. With the approval of the NPC Standing Committee, a recovery and reconstruction fund was set up. The overall plan for recovery and reconstruction and ten specific plans were drawn up in a short period of time. Provinces (or province-level municipalities) were paired up with severely hit counties (or county-level cities), with each province providing assistance to its twin county. All recovery and reconstruction plans are being implemented quickly, and over 8,400 projects have been started already. Lives and production are returning to normal in the disaster-hit regions.

Despite drastic changes in the global economic and financial situation and a marked increase in unexpected difficulties at home, notable achievements were made in economic and social development in 2008, and none of them came easily. They would not have been possible without the strong leadership and scientific decision-making of the Party Central Committee and the State Council, close collaboration and hard work of all localities and sectors, or the resolve, unity and painstaking efforts of the people of all ethnic groups.

While fully recognizing these achievements, we are keenly aware that the global and domestic economic situations are grim and complex, and that the task of maintaining steady and fairly rapid economic growth has become more formidable. The spread of the international financial crisis has exerted an enormous impact on the global economy, and the breadth, depth and intensity of the impact have exceeded everyone's expectations: the economies of major developed countries might all fall into recession, emerging market economies and developing countries are experiencing slowdowns in growth, and the world economy will experience a long period of stagnation and adjustment. In addition, there has been mounting global deflationary pressure and resurging trade protectionism, which will add more uncertainties and instabilities. The impact of the global financial crisis and many outstanding problems at home have suddenly made it more difficult to keep our economy going strong. We have not yet improved the extensive pattern of development or solved institutional and structural problems, including poor independent innovation capacity, unsuitable industrial structure, imbalance between domestic and external demand, the high toll on natural resources and the environment, the disproportion between investment and consumption, and imbalances between economic and social development, between rural and urban areas, and between different regions. In particular, the slowdown in economic growth has become a significant economic problem since the fourth quarter of last year. First, industrial production declined significantly. The growth of value-added of large industrial enterprises dropped by 9.7, 11.9 and 11.7 percentage points year on year in October, November and December respectively. Demand for energy, raw materials and transport shrank; prices of products such as steel and electrolytic aluminum fell; the problem of excess production capacity became apparent. Second, some consumption hotspots cooled down. The total floor area of commodity housing sold throughout the year decreased by 19.7 percent. The growth of automobile sales was 15.1 percentage points less than the previous year. Demand for other commodities, consumption of which had grown fast in recent years, also shrank by varying degrees. Third, foreign trade dropped sharply, with exports down by 2.2 percent and 2.8 percent year on year in November and December respectively. Fourth, some enterprises faced the difficult situation of fewer orders, sluggish sales and reduced profits. These problems spread from coastal regions to the hinterland, from small- and medium-sized enterprises to large ones, and from export-oriented industries to other industries. Many more enterprises than before suffered losses.

Meanwhile, there are also acute problems concerning employment, agriculture, rural areas and farmers, energy conservation and pollution reduction and the financial sector. There has been mounting pressure on employment and reemployment. Enterprises' demand for workers decreased significantly. The number of people joining the urban workforce in October, November and December dropped each month, standing at 840,000, 550,000 and 380,000 respectively. The employment situation for college graduates, urban residents having difficulty finding jobs and rural migrant workers has become worse. There are many factors restraining the growth of agricultural production and farmers' incomes. Agricultural infrastructure remains weak. After five years of bumper harvests in a row, it will be very difficult to keep grain production growing steadily. There is great downward pressure on prices of farm products. The return home of many rural migrant workers and their difficulty in finding steady jobs makes it harder to keep rural residents' incomes growing. It is now more difficult to promote energy conservation and pollution reduction. Energy-conserving technologies and services are developing slowly due to the objective fact that they are still in the early stage of development. Moreover, because enterprises are facing more difficulties and some are not operating at full capacity, they spend less on technological upgrading and pollution reduction, which leads to a drop in their energy efficiency and ineffective operation of their pollution control equipment. Therefore, there will be great pressure to achieve energy conservation and pollution reduction targets in the last two years of the Eleventh Five-Year Plan period. Potential risks in financial markets cannot be ignored, and confidence in the capital market urgently needs to be strengthened. There is chaos in the market order of some sectors, and workplace accidents and major food safety incidents repeatedly occur, inflicting heavy losses on people's lives and property. We will take vigorous steps to solve the above problems and minimize their adverse impact.