Ladies and gentlemen:

First of all, I want to extend sincere gratitude to friends from all walks of life especially friends from the press for your attention and support to our efforts to revitalize northeast China and other old industrial bases.

Now, my colleague Mr. Song Xiaotong, vice chairman of State Council's Office of the Leading Group for Revitalizing Northeast China and Other Old Industrial Bases, and I would like to brief our friends on the latest development of the implementation of the strategy for revitalizing northeast China and other old industrial bases in 2004 as well as our general plan for 2005.

In the year 2004, under the leadership of the Central Committee of the Communist Party of China (CPC) and the State Council, people in the three northeast provinces earnestly carried out the spirit of the 16th CPC Party Congress and the 3^rd and 4^th Plenary Session of the 16th Party Congress, comprehensively implemented the scientific concept for development, actively put into effect various measures to strengthen and improve macroeconomic control as well as the decision made by the CPC Central Committee and State Council to revitalize northeast China and other old industrial bases. They deepened reform, opened wider to the outside world, seized opportunities and pushed forward our work in various fields. The strategy of revitalizing northeast China and other old industrial bases witnessed a good start.

1. A good start of the strategy in 2004

(1). The great importance attached by CPC Central Committee and the State Council to the strategy of revitalizing northeast China and other old industrial bases received positive response and active participation by people from all walks of life, which in turn created a harmonious atmosphere.

The principal leaders of the CPC Central Committee and the State Council paid great attention to the work of revitalizing northeast China and other old industrial bases and went several times to factories, mines and remote areas in northeast China to conduct research, get information and people's opinions as well as give directions. At the same time, they gave speeches and briefings about the strategy on various diplomatic occasions, which greatly impelled the comprehensive implementation of the strategy.

In order to carry out the strategy, the central government decided on December 2, 2005 to set up a leading group for revitalizing northeast China and other old industrial bases with Premier Wen Jiabao as the head, Vice Primier Huang Ju and Zeng Peiyan as deputy heads and participation by leading officials from 25 major functional organs of the State Council. The Leading Group held its first meeting in March 2004, when priorities for the work in 2004 were set. The State Council established Office for Revitalizing Northeast China and Other Old Industrial Bases, which signified the comprehensive kick-start of the Strategy.

The three northeast provinces received wide-ranging support in terms of capital, technology, talented people and preferential policies provided by the organs of the State Council who compose the Leading Group for the strategy. Relevant departments held a series of workshops, trade fairs to attract more investments and talented people and to give wider publicity to the Strategy. A website called "Revitalizing Northeast China" was put into use by Xinhua Net in collaboration with three provincial governments and a TV series call "Road to Northeast" was put on show. Revitalizing northeast China and other old industrial bases became a hot issue receiving wide-ranging attention from home and abroad.

While earnestly carry out the strategy made by CPC Central and the State Council, three provincial Party Committees and governments made plans respectively and accordingly and made plans and ways for revitalization interactive. Greatly encouraged, carders and mass in the three provinces changed their mentality to seize the opportunity. They speeded up restructuring, made plan for reform of State Owned Enterprises (SOEs) and steadily pushed forward work in various fields.

Some other provinces took part in the revitalization work and signed bilateral agreements of cooperation. Enterprises and organizations at home and abroad set store by the business opportunities in northeast China and tried to seek opportunity for investment and cooperation.

(2). Policies in an effort to revitalize northeast and other old industrial bases came into effect one after the other.

First, policy was implemented in Heilongjiang and Jilin provinces to comprehensively exempt farmers from agricultural taxes and to expand the range and scale of grain subsidies in northeast China. The transfer payments for tax-for-fee reform and direct subsidy over grain and good quality seeds to northeast China by the central government hit 5.31 billion yuan. Second, pilot projects of improving social security system in urban and rural areas were launched in Heilongjiang and Jilin provinces following the footstep of Liaoning Province. The central government earmarked 4.57 billion yuan subsidy to the two provinces for their social security projects. Third, endorsement should be stepped up to encourage the policy-aided bankruptcy of SOEs. Fourth, northeast China took the lead in trying out the VAT deduction policy and preferential policy to enterprise income tax. VAT deduction was granted to enterprises in 8 key sectors for purchasing and renting fixed assets and energy tax rate was lowered.

(3). The central government beefed up its endorsement to restructuring and key construction projects.

The first batch of 100 projects of national debts bonds for the purpose of industrial restructuring was implemented in 2003. After that, in the year 2004 the second batch of 197 projects was approved. The total investment for the two batches of projects reached 108.9 billion yuan. By the end of 2004, 800 million yuan of subsidy on interest payment was made available to lower levels. The 118 projects for hi-tech development were launched in northeast China. Some ten billion yuan from the national debt bonds was used for agriculture, forestry and water projects, road construction in rural areas and 15 cave-in areas for the sake of coal excavation in northeast China.

(4). The general plan as well as plans for specific purpose to revitalize northeast were made after research and discussion.

The three northeast provinces respectively made their general plan for revitalization which were approved by the central government. They also made and implemented specific plan for the development of electricity. Other plans are now under research and discussion, such as the general plan for road and waterway construction in northeast China, plan for building a Northeast Asia international shipping hub in Dalian, plan for water conservancy in northeast China and a general plan for forestation and ecological construction in northeast China.

Last year witnessed new momentum of reform, development and stability in northeast China with impetus of the implementation of the strategy.

-- Economic growth was accelerated and economic efficiency was increased. The GDP of three northeast provinces hit 1513.39 billion yuan in 2004, with a year-on-year increase of 12.3 percent, 2.8 percent higher than average. Added value gained by large scale enterprises hit 486.96 billion yuan with a year-on-year increase of 19.7 percent and total amount of profits hit 132.8 billion yuan, a 35.5 percent increase on year basis.

-- Good harvest ensured the increase of farmers' income. Total grain production of the three provinces reached 72.31 million ton with an increase of 15.3 percent. The increase of grain and meat production is 6 percent higher than average. For the first time in history, the per capita income of farmers reached 3100 yuan with an increase of 16.7 percent, much higher than the average allowing for price rises.

-- Vast amount of investments were attracted and private sector witnessed rapid development. The three northeast provinces actually used 5.94 billion yuan of foreign investment with a year-on-year increase of 83.6 percent. The increase is much higher than the average. Non-state investment increased 55.8 percent, 41.4 percent and 34.5 percent respectively in Liaoning, Jilin and Heilongjiang provinces.

When we review our progress, we should also note that there are still some structural and system problems constraining the economic development left unresolved, such as unemployment, shift of mine-exhausted cities, settlement of non-performing loans. It is a long way to fulfill the task of revitalizing old industrial bases.

2. We will comprehensively implement various supportive policies made by the central government. The 8 stresses are as follows:

First, further effects to strengthen agricultural sector. Northeast provinces' role as base for grain production will be consolidated and production capability will be enhanced. We will accelerate infrastructure construction process in rural areas, speed up efforts to upgrade low and middle yielding farmland, increase input to technology content in farming, push forward the industrialized operation of agriculture, popularize advanced organizational form of grain production and vigorously develop modern agriculture. More subsidies will be granted to a wider range in terms of purchase of agricultural machines. We will continue our work in tax-for-fee reform and give guidance to surplus rural labors to move to non-agricultural sector and urban areas in an orderly way.

Second, upgrading and streamlining industrial structure. Intensive efforts will be made to the research and planning of restructuring in old northeast industrial bases. With the breakthrough on home production of important equipment, we will enhance the R&D capability, give priority to fist products and strengthen our capability to manufacture complete sets of equipments. Efforts to back the development of manufacturing important equipments will be stepped up. We will continue to carry out the project of national debt bonds with the purpose of restructuring focused on the localization of important equipments. Plan for the development of hi-tech industry to revitalize old northeast bases will be made. The preparation work for Harbin-Dalian passenger transport will be speeded up in order to try to start some important projects in one year time.

Third, speeding up structural innovation. We will push forward the strategic restructuring of state-owned sector, accelerate our efforts to reorganize SOEs into joint stock companies, develop mixed ownership (state, collective and private capital) and encourage growth and development of private sector. We will deepen SOEs reforms, improve corporate governance and enterprise operating mechanism, and push the restructuring of key industries such as steel and automobile industry. We shall make difference to the key and supporting line of production, reform the supporting line and properly settle the redundant labor. Workers in collective enterprises are faced with problems and difficulties, which also deserve proper settlement. We will also step up efforts to properly handle non-performing loans in northeast China and try to reform rural cooperatives. Private capital should be encouraged to play a role in the reform and reorganization of SOEs.

Fourth, opening up wider to the outside world. We will adopt a more active attitude toward foreign investment especially those strategic ones to take part in the restructuring process of old industrial bases and expand finance, insurance, tourist service sectors. Economic and trade cooperation with neighboring countries will be enhanced through the improvement of preferential taxation policy that encourages border trade. We will try to attract more domestic factors of production to northeast China, encourage more openness between the three provinces, cement the economic tie and cooperation with Simeng City (east of Inner Mongolia) and developed coastal cities.

Fifth, a plan for the harmonious development between human beings and the nature. We will expedite the paradigm shift of resource intensive urban economy and quicken the research of a compensation mechanism for resource exploitation and a mechanism for helping the declining industry. Relevant policies may be firstly tried in resource intensive cities such as Fuxin and Shuangyashan and Daqing and Yichun will be picked as petroleum and forestry intensive cities to try relevant policies. Continuous efforts will be made to push forward the pilot project of recycle economy in Liaoning and the ecological project in Heilongjiang and Jilin provinces. Efforts to improve infrastructures such as water supply grid, sewage system and reform of heating system in urban and rural areas in northeast China. Attention will be given to protect and restore wetland and natural forestry.

Sixth, attracting more talented people. Talented people of various specialties should be trained and attracted through different channels and forms. We should try to create a situation in which people can bring into full play of their talents and abilities. A unified, opening and interactive market of human resources should be established in a coordinated manner to boost the flow of talented people.

Seventh, properly handling questions that have a direct bearing to the immediate interest of the people. Persistent attention will be given to the trial project of improving social security system in Jilin and Heilongjiang provinces, "two guarantees" and the increase of minimum allowance for living expenses. Relevant measures to provide financial support and job opportunities will be put forward as soon as research finishes. Efforts to improve infrastructures such as culture, sports, health and social undertakings and to improve the system and function of community service will be stepped up.

Eighth, putting stress on coordination and in-depth investigation with different parties. State Council's Office of the Leading Group for Revitalizing Northeast China and Other Old Industrial Bases will reinforce its communication and cooperation with other government organs and local governments to carry out in-depth investigation and research on issues that have a bearing on how to revitalize old industrial bases, social development and people's concern. It is important for us to review progress and experience while providing solutions to existing problem in an objective manner. It is imperative for us to provide suggestions on how to open wider, how to establish a compensation mechanism for resource exploitation and a mechanism for helping declining industry, how to push forward structural innovation of old industrial bases and picking a city in northeast China to establish a experiment zone for regional reform.

Now the floor is open for questions.