This year, our focus is on doing the following work well.
1. Keeping overall price levels basically stable
Recently, prices have risen fairly quickly and inflation expectations have increased. This problem concerns the people's wellbeing, bears on overall interests and affects social stability. We must therefore make it our top priority in macroeconomic control to keep overall price levels stable. We need to make the most of favorable conditions, such as an ample supply of manufactured goods and our abundant grain reserves and considerable foreign exchange reserves, endeavor to overcome the adverse effects of imported and structural inflation, cushion the upward pressure for costs of factors of production, and correctly guide market expectations to resolutely curb price rises. We need to comprehensively strengthen our work controlling and monitoring prices mainly through economic and legal methods supplemented by administrative means when necessary.
First, we will effectively manage market liquidity and control the monetary conditions for commodity prices rising too rapidly. We will decide proper timing, frequency and intensity of price adjustments for goods and services whose prices are regulated by the government.
Second, we will vigorously develop production and ensure the production and supply of major farm products, daily necessities and important means of production. We will effectively implement the system of provincial governors taking responsibility for the "rice bag" (grain supply) program and city mayors taking responsibility for the "vegetable basket" (non-grain food supply) program.
Third, we will develop the distribution system for farm products, actively encourage farmers and stores to link up, and guarantee the unimpeded transport of fresh farm products through "green channels," where vehicles carrying such goods are exempt from paying road tolls. We will improve the reserve system for important goods and the system for temporarily purchasing and stockpiling major farm products, seize the opportune moment for the state to manipulate reserves, adjust imports and exports, and strengthen our ability to control the market.
Fourth, we will strengthen oversight and supervision of prices and maintain market order. We particularly need to strengthen law enforcement concerning pricing, and strictly investigate and deal with illegal behavior such as driving up prices through price collusion or market speculation. Fifth, we will improve the system of subsidies and institute a sound mechanism to raise social assistance and social security benefits when commodity prices rise. We cannot allow price rises to affect the normal lives of low-income people.
2. Further expanding domestic demand, especially consumer demand
Expanding domestic demand is a long-term strategic principle and basic standpoint of China's economic development as well as a fundamental means and an internal requirement for promoting balanced economic development.
We will actively boost consumer demand. We will continue to increase government spending used to help expand consumption, and increase subsidies to low-income urban residents and farmers. We will continue to implement the policies of providing subsidies for rural residents to purchase home appliances and subsidies for trading-in old home appliances for new ones. We will strengthen the infrastructure for the distribution of goods, culture and sports, travel, and broadband in rural areas and small and medium-sized cities. We will vigorously promote consumption in the areas of culture, travel and old-age care. We will promote chain-store operations and unified distribution in rural areas, optimize the distribution of urban commercial outlets, and develop new services such as e-commerce, online shopping and the Geographic Information System. We will energetically overhaul and standardize the market, and earnestly protect consumers' rights and interests. We will intensify our efforts to crack down on violations of intellectual property rights and the manufacture and sale of counterfeit or substandard goods.
We will strive to improve the investment structure. We will earnestly implement the State Council's 36 new guidelines for encouraging and guiding nongovernmental investment; work quickly to formulate open and transparent standards and supporting policies on market access; effectively relax restrictions on market access; genuinely eliminate all visible and invisible barriers; encourage and guide nongovernmental investment in areas such as basic industries, infrastructure, municipal public utilities, social programs, and financial services; prod privately run enterprises to strengthen their innovation, transformation and upgrading; encourage and guide the reorganization and mergers of nongovernmental capital and its involvement in SOE reform; strengthen services and guidance for and standardized supervision of nongovernmental investment; and promote its stable growth and structural optimization. We will get government investment to play the leading role in restructuring, give priority to ensuring funding for key projects that are under construction or expansion, and begin construction on the major projects in the Twelfth Five-Year Plan in an orderly manner. We will prevent haphazard investment and redundant construction. We will strictly enforce investment project approval standards on land use, energy conservation, environmental protection and safety, and improve the quality and benefits of investment.
3. Consolidating and strengthening the position of agriculture as the foundation of the economy
We will steadfastly make agriculture, rural areas, and farmers the top priority of the government's work; carry out agricultural modernization while deepening industrialization and urbanization; and consolidate and build upon the favorable situation in agriculture and rural areas.
We will ensure an adequate supply of agricultural products and increase farmers' incomes through multiple channels. We will make safeguarding food security our primary goal, and work tirelessly to increase agricultural production. We will keep the area planted in grain crops stable, and support the growing of cotton, oilseed and sugar crops in the most suitable areas. We will energetically develop the animal husbandry, fishery, and forestry sectors. We will effectively carry out the new round of the "vegetable basket" program and ensure that suburbs of large and medium-sized cities have a basic area for growing vegetables and a basic ability to supply fresh produce for urban residents.
We will get science and technology to better support agriculture, develop and expand the crop seed industry, and launch large-scale efforts to increase agricultural production. We will continue to implement the policy of minimum grain purchase prices, raise the floor price for wheat by 5 to 7 yuan per 50 kg and increase the floor price for rice by 9 to 23 yuan per 50 kg this year. We will energetically develop nonagricultural industries in rural areas, strengthen county economies, improve farmers' vocational skills and their ability to start their own businesses and increase their incomes, and encourage them to find nonagricultural employment in their hometowns or nearby areas. We will raise the poverty line, and intensify our efforts to alleviate poverty through development.
We will put great effort into water conservancy, and comprehensively strengthen agricultural and rural infrastructure. We will focus on developing more irrigation and water conservancy projects, harnessing small and medium-sized rivers, reinforcing small reservoirs and faulty and dangerous sluices, and preventing and responding to geological disasters from mountain torrents. We will improve irrigation and drainage facilities, develop water-saving irrigation, reinforce river embankments, clear away silt and dredge waterways, eliminate hidden dangers in reservoirs, and increase their storage capacity to prevent floods. Through several years of hard work, we will comprehensively improve our ability to prevent floods, control droughts, and prevent and mitigate natural disasters.
We will vigorously develop and improve rural land, develop arable land that meets high drought and flood resistance standards on a large scale, and accelerate our work to increase the country's grain production capacity by 50 million tons. We will intensify work on projects to provide running water and electricity to rural homes, build and improve roads, exploit methane and construct rural housing, and energetically improve rural working and living conditions, so that farmers can live in a nice environment.
We will increase funding for agriculture, rural areas, and farmers and improve our policies to strengthen agriculture and benefit farmers. We will direct more government spending toward agriculture and rural areas, and ensure that total expenditures and spending increases in this area are both higher than last year.
Our budgetary fixed asset investment will be used mainly to develop agricultural and rural infrastructure, and we will ensure that both the proportion and the total amount of investment further increase. Proceeds from the transfer of land-use rights will be spent primarily on developing agricultural land, irrigation and water conservancy, and constructing rural infrastructure, and we will ensure that an adequate amount of funds is drawn from these proceeds and used for those purposes.
This year's allocation for agriculture, rural areas, and farmers from the central government budget will be 988.45 billion yuan, an increase of 130.48 billion yuan over last year. We will continue to increase subsidies to agricultural production, and give high priority in the newly increased subsidies to major production areas, key crop varieties, major specialized households, and specialized farmer cooperatives. We will increase general transfer payments from the central government to the major counties that supply other parts of the country with grain, oilseed and pigs, and expand the size and scope of awards and subsidies.
We will encourage financial institutions to increase their supply of credit for agriculture, rural areas, and farmers and ensure that this year's percentage increase in credit is no less than that of last year. We will increase policy-based financial support for agriculture, rural areas, and farmers. We will improve the policy-supported agricultural insurance system, and develop an agricultural reinsurance system and a mechanism for diffusing the risk of huge catastrophes.
We will deepen rural reform, and increase the vitality of rural development. We will adhere to and improve the basic rural operating system and improve the household contract responsibility system for land use including farmland, forestland and grassland. We will move forward with reform of the rural land management system in an orderly manner. We will explore and establish a compensation mechanism for protecting arable land. We will continue to carry out comprehensive rural reforms.
We will fully implement the government award and subsidy system for village-level public works projects, the launching of which is determined by villagers themselves, and we will significantly increase the size of awards and subsidies. We will accelerate the development of specialized farmer cooperatives and the system whereby various sectors of society provide services for agriculture, and raise the level of organization in agriculture. By the end of this year, we will put in place sound public services for spreading agricultural technology; preventing and controlling animal and plant diseases; and monitoring the quality of agricultural products in townships, towns and regions all over the country.
Ensuring adequate food for 1.3 billion Chinese people is always a top priority, and we must never treat this issue lightly. We have the confidence and the ability to handle this important matter well.