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The keynote of China’s social and economic policies at present and during the entire period of modernization drive rests on scientific development and social harmony as well as on the relevant system reform and construction.

In 2006, the national economy has maintained a trend of stable growth. The factors that likely lead the economy to develop downwards and the factors that support an accelerating economic growth are intermingled.

When making estimates on the potential output level, nations usually use the long-term trend of actual output as a substitution for the potential output level.

The importance of competition on raising economic efficiency and improving social welfare has been adequately proved by the practice in China.

Since the initiation of the reform and opening-up, China’s grain output, reaching consecutively 350 billion kilograms, 400 billion kilograms, 450 billion kilograms and 500 billion kilograms, has made a historical change from a chronic shortage to a general balance, with surplus in years of bumper harvests, and has made important contributions to the sustainable and stable growth of the national economy.

During the first quarter, growth of industrial production was accelerated and the economic benefit continued to improve.

The recently-released National Program of the Medium- and Long-term Development of Science and Technology (2006-2020) has outlined the goals of building a new-type state, and the priority tasks, key policies and measures regarding the reform of scientific and technological system and the building of a national innovation system.

The reform of China’s exchange rate system has witnessed a key and delightful step towards floating, stabilizing the market expectation.