This unprecedented financial crisis has inflicted a severe impact on both China and Britain as well as other European countries. The crisis has not yet hit the bottom, and it is hard to predict what further damage it may cause. To work together and tide over the difficulties has become our top priority.
I believe that closer cooperation is needed to meet the global crisis, and the level of cooperation hinges upon the level of mutual trust. The Chinese Government maintains that countries should: first and foremost, run their own affairs well and refrain from shifting troubles onto others; second, carry out cooperation with full sincerity and avoid pursuing one's own interests at the expense of others; and third, address both the symptoms and the root cause of the problem. A palliative approach will not work. We should not treat only the head when the head aches, and the foot when the foot hurts. As I reiterated at the World Economic Forum Annual Meeting in Davos, necessary reform of the international monetary and financial systems should be carried out to establish a new international financial order that is fair, equitable, inclusive and well-managed. We should create an institutional environment conducive to global economic growth.
Let me talk briefly about how China has been responding to the crisis.
The fallout of the financial crisis on China's real economy is becoming more evident. Since the third quarter of last year, our exports have declined sharply, economic growth has slowed down, and the pressure on employment has been rising. In the face of the grim situation, we have acted decisively. We have made timely adjustment to the direction of our macroeconomic policy, promptly introduced ten measures to expand domestic demand, and formulated a series of related policies. Together, they make up a systematic and comprehensive package plan aimed at promoting steady and relatively fast economic growth. Its main contents are:
First, substantially increase government spending to boost domestic demand. The Chinese Government has announced a two-year investment program that will generate, through fiscal spending, a total investment of RMB 4 trillion nationwide, equivalent to 16% of China's GDP in 2007. The money will mainly go into government-subsidized housing, projects related to the well-being of rural residents, the construction of railway and other infrastructural projects, social development programs, environmental protection and post-earthquake recovery and reconstruction. The Chinese Government has introduced a massive tax-cut program, which will reduce the tax burdens on businesses and individuals by about RMB 500 billion each year. We have also cut interest rates by a large margin, increased liquidity in the banking system and adopted a range of financial measures.
Second, implement a large-scale industrial restructuring and rejuvenation program. We are pushing forward industrial restructuring and upgrading across the board and formulating plans for the restructuring and revitalization of ten key industries, including automobiles and iron and steel. We will take economic and technological measures to boost energy conservation and reduce emissions, and promote merger and reorganization of enterprises to raise the level of industry concentration and the efficiency of resource allocation. We encourage and support the extensive application of new technologies, techniques, equipment and materials and the development of marketable products by enterprises.
Third, make energetic efforts for progress and innovation in science and technology. Science and technology are of fundamental importance in overcoming the financial crisis. A major crisis is usually followed by a revolution in science and technology, and no economic recovery is possible without technological innovation. We are stepping up the implementation of the National Program for Medium- and Long-Term Scientific and Technological Development, with special emphasis on 16 major projects including core electronic devices, development and use of nuclear energy and advanced numerically controlled machine tools. We will strive to make breakthroughs in a host of core technologies and key generic technologies to support sustainable economic growth at a higher level. We will promote the development of high-tech industrial clusters and cultivate new economic growth areas. All in all, we will rely on major breakthroughs in science and technology to foster new social demand and bring about a new round of economic boom.
四 是大幅度提高社会保障水平。继续提高企业退休人员基本养老金，提高失业保险金和工伤保险金标准，提高城乡低保、农村五保等保障水平。积极推进医药卫生体制改革，力争用三年时间基本建成覆盖全国城乡的基本医疗卫生制度，初步实现人人享有基本医疗卫生服务。我们坚持优先发展教育，正在制定《国家中长期教育改革 和发展规划纲要》。我们实施更加积极的就业政策，重点解决高校毕业生和农民工就业问题。开辟就业岗位，缓解就业压力。我们采取这些措施，把扩大国内需求、调整振兴产业、加强科技支撑、强化社会保障结合起来，把拉动经济增长和改善民生、增加就业结合起来，把克服当前困难和促进长远发展结合起来。这样做，有利于中国的发展，也将给包括英国在内的世界各国企业带来巨大的商机。
Fourth, significantly raise the level of social security. We will continue to increase basic pension for enterprise retirees and upgrade the standard of unemployment insurance and workers' compensation. We will raise the level of basic cost of living allowances in both urban and rural areas and welfare allowances for those rural residents without family support. We are advancing the reform of the medical and health system and working to put in place a nationwide basic medical and health system covering both urban and rural areas within three years and achieve the goal of everyone having access to basic medical and health service. We give priority to education and are now working on the Guidelines of the National Program for Medium- and Long-Term Educational Reform and Development. We are following a more active employment policy with special emphasis on helping college graduates and migrant workers find jobs. We are endeavoring to create more jobs and lessen the impact of the financial crisis on employment. The aforementioned measures will help us boost domestic demand, readjust and reinvigorate industries, enhance the support of science and technology and strengthen social security all at the same time. They will stimulate consumption through increased investment, drive economic growth while improving people's livelihood and creating more jobs, and see us through current difficulties while also improving the long-term prospect of the Chinese economy. They will not only benefit China's development, but also bring enormous business opportunities to other countries, Britain included.