First, downward pressure on economic growth is building up. Growth in investment, which plays a key role in ensuring economic growth, has continued to slow back down; consumer demand is having a difficult time making significant increases; foreign demand is unlikely to change for the better; and new growth areas in consumer spending have not yet been able to fill the gaps left by old ones.

Second, some enterprises are having difficulties in production and operations. The output producer price index (PPI) has continued to fall; the expectation of deflation is getting stronger; the cost of factors of production such as capital and labor is increasing; there are still problems in the flow of credit funds to the real economy; the problem of small and micro businesses obtaining financing only at great effort and high cost has not been fundamentally alleviated; and enterprise profits have dropped markedly, affecting their confidence in the near-future market and producing a non-trivial ripple effect on employment and people's income.

Third, there is overcapacity in traditional industries and a lack of effective supply in emerging industries. Resolving the problem of overcapacity is an arduous task that will increase pressure on society. There are too many restrictions upon entering into emerging industries and modern services, and there is a clear lack of effective supply of some goods or services for which there is a huge demand in the domestic market.

Fourth, it is becoming more difficult to remove hidden barriers and break vested interests when tackling the hard problems in reform. As China's reform is at a critical stage and in a deep-water zone, deepening reform will involve more complicated conflicts and affect more deep-rooted interests. Some reform plans need further improvement, and the implementation of some reform measures is far from satisfactory.

Fifth, potential risks in some areas need our close attention. Adjustments to the real estate market face major uncertainties; different trends have emerged in the market; credit defaults have appeared in some enterprises; the amount of bad debt reported by banks has increased; and economic risks are emerging.

In addition, new problems have also cropped up in agriculture, foreign trade, social work, people's wellbeing, ecological progress, environmental protection, and workplace safety.

Faced with these issues, we must keep a clear head and become more aware of any possible crisis and the bottom line, then work hard to respond to and resolve them.

II. General Requirements and Major Targets and Policies for Economic and Social Development in 2015

2015 is a crucial year for comprehensively deepening reform, the first year for comprehensively advancing the law-based governance of the country, and the final year for completing the tasks set out in the Twelfth Five-Year Plan. In carrying out our economic work in 2015, we must comprehensively implement the guidelines of the 18th National Party Congress and the third and fourth plenary sessions of the 18th CPC Central Committee; take as our guide Deng Xiaoping Theory, the important thought of Three Represents, and the Scientific Outlook on Development; and fully implement the guiding principles from General Secretary Xi Jinping's major speeches. We must adhere to the general principle of making progress while ensuring stability; stay centered on improving the quality and performance of economic development; proactively adapt to the new normal in China's economic growth; keep the economy performing within an appropriate range; and give high priority to transforming the growth model and making structural adjustments. We must also tackle hard problems in reform; highlight the importance of innovation as a force to drive development; strengthen risk prevention and control; work harder to ensure people's wellbeing; and strive for sound and steady economic development as well as social harmony and stability.

We will adhere to the general principle of making progress while ensuring stability. The focus of our efforts to ensure stability will be placed on keeping economic performance stable, making sure that there are no major fluctuations in growth, employment, and prices, and precluding the emergence of regional and systemic financial risks. The focus of our efforts in making progress will be put on making economic structural adjustments and deepening reform and opening up to ensure that achievements are made in transforming the growth model and promoting innovation-driven development.

To meet these requirements, and in keeping with the goals set out in the Twelfth Five-Year Plan, we have set forth the main targets for economic and social development in 2015 as follows:

- Ensuring that the economy grows steadily

GDP is projected to grow by approximately 7%. In setting this objective, we have mainly taken the following into account: This growth rate accommodates the new normal in economic development, reflects China's current potential for economic growth, is in line with market expectations, and can be achieved with hard work. At the same time, the recent few years' correlation between economic growth and structural changes on the one hand and increases in employment on the other hand shows that an economic growth of around 7% would help create more than 10 million urban jobs. We can do better than this if we promote reform and structural adjustments through practical work.

-Maintaining the basic stability of overall prices

The CPI is expected to increase by around 3%. In setting this objective, we have mainly taken the following into account: The prices of major commodities in the international market may continue to remain low, there is an ample supply of main commodities at home, some manufacturing industries are suffering from a combination of overcapacity and sluggish demand, and there will be continuing weakness in the overall level of prices. In addition, we have also set this target to leave space for price reform.