2. Progress was made in structural adjustment.

We stressed priorities, supported some areas while restricting others, and strove to raise the quality and returns of development and promote industrial upgrading in order to enhance the sustainability of economic development.

First, industrial structural adjustment proceeded steadily. Significant achievements were made in technological innovations and fostering emerging industries. R&D expenses accounted for 2.09% of GDP, hitting the targeted figure. The lunar lander Chang-e 3, the Shenzhou-10 manned spacecraft, the deep-sea manned submersible Jiaolong and other major innovative achievements captured the world's attention. Strategic emerging industries developed quickly, such as energy conservation and environmental protection, next-generation information technology, new energy, high-end equipment manufacturing, and new materials; and we began to put the 4G mobile communications system to commercial operation on a large scale. Value added of high-tech manufacturing industries grew by 11.8%, 2.1 percentage points higher than in industrial enterprises with annual revenue of 20 million yuan or more from their main business operations. We moved faster to transform and update traditional industries and worked harder to solve the problem of excess production capacity. We issued a notice to keep industries with a serious problem of overcapacity from expanding blindly. We issued guidelines and accompanying policies and measures for solving the serious problem of excess production capacity, and put great effort into resolving the problem of overcapacity in the steel, cement, electrolytic aluminum, plate glass and shipbuilding industries. We optimized the environment for developing the service sector. We issued policies and guidelines to spur the development of information consumption, elderly services and health services, issued a plan for developing a nationwide network of logistics parks, and continued to carry out comprehensive trial reforms in the service sector. Value added of the service sector increased by 8.3%, and it accounted for 46.1% of GDP, surpassing secondary industry for the first time. Basic industry developed quickly. There were 5,586 kilometers of new railway lines put into operation, of which 1,672 kilometers were high-speed lines. There were 70,300 kilometers of new highways put into service, of which 8,260 kilometers were expressways. We also put into service 110 berths for 10,000-ton class or larger ships and added ten new civilian airports. Power generation was stable, and the output of raw coal, crude oil and natural gas rose by 0.8%, 1.8% and 9.4%, respectively. The mix of energy sources was further improved, and energy generated from non-fossil fuels accounted for 9.8% of primary energy consumption, an increase of 0.4 percentage points over the previous year.

Second, the integration of urban and rural development proceeded in an orderly fashion. We conscientiously implemented the policy of boosting agriculture, benefiting farmers and increasing rural prosperity, and more than half of the central government budget allocated for investment was spent on agriculture, rural areas and farmers. Overall agricultural production capacity increased, and total grain production reached 602 million metric tons, the tenth consecutive year of growth. The supply of meat, eggs, milk, fruits, vegetables and fish was stable. Advances in agricultural science and technology contributed 55.2% to agricultural development, a rise of 0.7 percentage points over the previous year. The percentage of the rural population with access to safe drinking water reached 88.5%; 211,000 kilometers of rural power lines and 210,000 kilometers of rural roads were either built or upgraded; 800,000 rural households began using methane gas; and 2.66 million dilapidated rural homes were renovated. Grain silos with a capacity of 4.4 million metric tons and 114 wholesale markets for agricultural products were built. The central government made comprehensive arrangements for actively and prudently carrying out a new type of urbanization, and the state plan for new urbanization was basically completed. A total of 53.73% of the population in China were permanent urban residents, an increase of 1.16 percentage points over the previous year.

Third, development in different regions became better balanced. In the western region, construction on transportation, water conservancy, energy and other major infrastructure projects was strengthened; construction began on 20 key projects, with a total investment of 326.5 billion yuan; and the pace of development and opening up of inland and border areas was accelerated. We deepened the execution of the strategy to invigorate northeast China and other old industrial bases, launched pilot programs to relocate and upgrade old urban industrial areas as well as independent industrial and mining areas, and introduced the Plan for Transforming and Upgrading Old Industrial Bases Nationwide and the Plan for Sustainable Development of Resource-Dependent Cities. In central China, the city clusters gathered in the middle reaches of the Yangtze River and the Central Plains Economic Zone are having a greater magnet effect, and construction on demonstration zones posed to carry on relocated industries proceeded smoothly. In the eastern region, industrial transformation and upgrading picked up speed and the pilot project to develop the marine economy proceeded in an orderly way. The plan to develop functional zones was implemented thoroughly. Smooth progress was made in cooperation between regions and pairing assistance. We continued to increase support to old revolutionary base areas, ethnic minority areas, border areas and poor areas. We smoothly carried out the plan for development and poverty alleviation in contiguous areas with acute difficulties. Post-earthquake recovery and reconstruction efforts in Yushu were brought to closure and post-earthquake recovery and reconstruction efforts in Lushan, Sichuan Province, and Min and Zhang counties, Gansu Province, registered steady progress.

Fourth, efforts were accelerated to conserve energy, reduce emissions and protect the environment. We issued and implemented the National Strategy for Adaptation to Climate Change, the Strategy and Near-term Action Plan for Developing the Circular Economy, the Guidelines on Accelerating Development of Energy-Efficient and Environmentally Friendly Industries, and the Action Plan for Preventing and Controlling Air Pollution. We worked to conserve energy and reduce emissions in key areas and enterprises and made steady progress in comprehensively improving the water environment in key watersheds and areas. We pushed ahead with ecological projects to protect virgin forests, control the sources of dust storms affecting Beijing and Tianjin, prevent the spread of stony deserts, and return marginal farmland to forests and grazing land to grasslands, and afforested 6.09 million hectares of land. Targets of energy conservation and environmental protection were basically attained: energy consumption and carbon dioxide emissions per unit of GDP dropped 3.7% and 4.36%, respectively; emissions of sulfur dioxide, chemical oxygen demand, ammoniacal nitrogen, and nitrogen oxides dropped 3.48%, 2.93%, 3.14%, and 4.72%, respectively; water consumption per 10,000 yuan of value-added by industry decreased 5.7%; and the percentages of urban sewage treated and urban household waste safely handled reached 87.9% and 85.8%, respectively. We played an active and constructive part in international talks and communication and cooperation on responding to climate change.