Regarding the energy issue, Wen said China will strive to chop down its energy consumption rate by 4 percent this year, a new key index to guide economic and social development.

"Energy consumption per unit of GDP should fall by about 4 percent in 2006," Wen said.

It is the first time China combines energy-efficiency with the indexes of economic growth, price, employment and balance of payments for macro-control of its economy.

China is determined to reduce energy consumption per unit of GDP by 20 percent and the total volume of major pollutant discharges by 10 percent in the coming five years, a new round of economic and social development beginning this year, Wen said.

Necessitated by the country's current conditions and long-term interests, these targets are designed to tackle the mounting pressure on resources and environment and provide a clear guide for policy-making, Wen said.

"Though achieving them will be quite difficult, we have the confidence and determination to succeed," he said, noting that China is resolved to build a resources-saving and environment-friendly society. 

Official statistics show that the total volume of energy consumption in China last year was equal to 2.22 billion tons of standard coal, up 9.5 percent over the previous year and lower than the 9.9 percent economic growth rate. Energy consumption per 10,000 yuan (US$1,250) of GDP was equivalent to 1.43 tons of standard coal, roughly the same level as that in 2004.

China has seen its economic volume quadrupled in the last two decades of the 20th century largely due to huge investment and doubled energy consumption. However, the obvious conflict between environment protection and booming economic growth will challenge China's future development.

The premier called for the establishment of various standards for conserving energy, water, land and materials in all industries, and the development of environment-friendly products, projects and buildings.

He added that energy-efficiency index of all regions and major industries will be released to the public on an annual basis. In this sense, the public will be mobilized to join in the long-term campaign of energy and resources conservation in a bid to bolster a recyclable economy and an environment-friendly society.

To build a "new socialist countryside," Wen said the government will spend 339.7 billion yuan (US$42 billion) in agriculture, rural areas and farmers this year, which is 42.2 billion yuan (US$5.25 billion), or 14.18 percent, more than last year.

"We need to implement a policy of getting industry to support agriculture and cities to support the countryside, strengthen support for agriculture, rural areas and farmers, and continue making reforms in rural systems and innovations in rural institutions to bring about a rapid and significant change in the overall appearance of the countryside," he said.

The Central Committee of the Communist Party of China (CPC) has set objectives including "enhanced productive forces, higher living standards, civilized living style, an orderly and clean environment, and democratic administration," he said.

China is an agricultural country traditionally, and old-style farming lasted for thousands of years in most areas. Like any other countries, China had drawn a huge sum of funds for industry development from agriculture and rural areas in the initial stage of industrialization and urbanization since 1949, resulting in yawning gap between the city and the countryside.

To narrow the gap, the government has kept increasing central fiscal expenditure on agriculture, rural areas and farmers over the last few years. In 2005, the fund from the central budget and T-bond proceeds to support agriculture, rural areas and farmers reached 297.5 billion yuan (US$36.7 billion), which was 34.9 billion yuan (US$4.34 billion) more than in 2004 and over 100 billion yuan (US$12.44 billion) more than in 2002. The capital inputs of many localities for this purpose also reached a record high.

Wen said this year priority will be given to developing modern agriculture and promoting steady expansion of grain production and sustained increase in farmers' incomes.

"We will further increase direct subsidies to grain producers, subsidies for growing superior grain cultivars, and subsidies for agricultural machinery and tools," he said.

"We need to resolutely work to reorient investment by shifting the government's priority in infrastructure investment to the countryside. This constitutes a major change," he said.

The fund will be mainly used for strengthening basic development of farmland, accelerating construction of infrastructure projects such as roads, drinking water supplies, methane facilities, power grids and communications.

In what was called "a milestone event" in China's educational history, Wen pledged that the government would eliminate all charges on rural students receiving a nine-year compulsory education before the end of 2007.

The new policy, apparently resulting from the central leadership's latest call for building a "new socialist countryside," will benefit some 160 million school-age children in the vast rural region, who account for nearly 80 percent of the country's primary and junior middle school students.

"Over the next two years, we will completely eliminate tuition and miscellaneous fees for all rural students receiving compulsory education," the premier said. 

The policy's successful implementation, which Wen said requires an increase of 218.2 billion yuan (US$27.27 billion) in the central government budget expenditure over the next five years, will basically lift China out of the rank of less than 30 countries worldwide that fail to provide their kids with completely free compulsory education.

China in 1986 promulgated the law on compulsory education, which stipulates that the state should provide a nine-year compulsory education "free of tuition fees" for all primary and junior middle school students.

However, the law has failed to guarantee the funding of compulsory education, thus forcing many schools, particularly those in the impoverished rural regions, to either continue to collect the tuition fees or charge various "miscellaneous fees" on their students in the name of "voluntary donations," "fund-raising for school construction" or "after-school tutoring fees."

Excessive charges by the schools have become a major reason behind the increasing rural dropouts in recent years. The dropout ratio for rural primary and junior middle schools in 2004 was 2.45 percent and 3.91 percent respectively, while the figure in the less developed central and western regions was much higher.

Wen said the new policy would be first implemented in the western regions this year and then extended to the central and eastern regions next year.

"We will also continue to provide free textbooks to students from poor families and living allowances to poor students residing on campus," he added.

Funding the repair and renovation of rural school buildings and guaranteeing the payment of rural school teachers' salaries are also among the measures Wen promised to take in the coming years.

Addressing the key issue of financing, he said expenditures on rural compulsory education will be "fully incorporated into the central and local government budgets," and promised to gradually establish a "mechanism to guarantee funding for rural compulsory education."

The NPC has already started amending the two-decade-old compulsory education law, focusing on sufficient funding.

Underlining the significance of the new policy, Wen said, "It is bound to have a far-reaching impact on raising the overall quality of the people of China."