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Achieving Fast yet Steady Economic Development through Transformation and Innovation--Speech by Vice Premier Li Keqiang at the Opening Ceremony of the 2011 AGM of CCICED

Dear Council members, experts, ladies and gentlemen, friends,
I'm very glad to see old and new faces here. The Council has long been dedicated to China's environment and development cause, and done a great deal of fruitful work. The theme for this annual general meeting is "green transformation of the economic development mode", which aligns with the direction identified by the Outline of the 12th Five-Year Plan for National Economic and Social Development, that is, accelerating the change of economic development mode. The theme is conductive to the promotion of transformation and has practical significance. I'm convinced that after the general debate, many profound insights and opinions and recommendations of high relevance would be put forward, which is conductive to enabling a good beginning for the 12th Five-Year Plan period and to advancing the change of economic development mode.
At the moment, the international economic situations are complicated and ever-changing, and the international community faces many real conflicts such as the sovereign debt crisis, financial shock, and economic downturn. Those phenomena expose the structural problems in some countries due to imbalance between the real economy and virtual economy, and disclose the underlying conflict of unbalanced development between the North and the South. In the meantime, mankind is confronted with the global challenges of energy, resources, food security and climate change.
The grave situation is thought-provoking. On the one hand, the world countries need to shore up their confidence and work together to achieve the robust growth of the world economy, which is the top priority. On the other hand, it is the trends of the times to speed up the restructuring, reforms and transformations in light of the underlying conflicts and problems. Environment and development are closely interrelated. Not only the efforts in advancing the robust recovery of the world economy are irreplaceable in the global agenda, but also the efforts in balancing the environment and development, achieving sustainable development, and seeking the harmonious coexistence of the environment and economy as well as the balance between and collective progress of development and transformation.
China has made significant achievements in economic and social development, and actively explored the transformation in practices since the reform and opening-up to the outside world. We have always focused on the economic development, identified the energy conservation and environmental protection as one of the basic national policies, made great efforts in implementing the sustainable development strategy, and tried to promote the change of economic development mode. China's GDP has seen an annual growth rate of 9.9% over the past 33 years, and in the meantime, the energy use per unit of GDP output has declined by around 4% each year on average. The forest coverage was up by 2 percentage points during the 11th Five-Year Plan period. Therefore, China has contributed to the world environment and development cause as obvious to all.
In the meantime, however, China is a large developing country with over 1.3 billion populations. The per capita income is at a low level, there are still 700 million rural populations out there, the development in the central and western regions is relatively behind, public services including the basic education, basic medical and health care, and community-level culture are still the short boards, the manufacturing level is not high, the proportion of service industry is exceptionally low, the economic growth is achieved at great resources and environment costs, and there is still the problem of unbalanced and unsustainable development.
China will adhere to the science-based development, accelerate the change of economic development mode, be dedicated to advancing transformation in the development course and seeking development through transformation, and advance the economic transformation and innovative development mode.
First of all, transformation is a must for development and transformation itself means development. We need to renew our development ideas, adopt innovative development modes, explore the development path and seek development through transformation, in order to adapt to the new changes in the world and national conditions, alleviate the bottlenecks of resources and environment, and achieve the fast yet steady economic development in a long run. Transformation is conductive not only to the conservation of the resources and protection of the environment, but also to fostering and expanding new growth engines and fueling the development of emerging industries. For example, the output value of the energy conservation, environmental protection and resource recycling industry exceeded 2 trillion yuan last year and is expected to have reached up to 4.5 trillion yuan in 2015, which brings along great development opportunities and potentials. To integrate the development and transformation is also conducive to balancing the economic growth, restructuring, and prices, and maintaining the fast yet steady economic development.
Second, transformation-based development is to be realized by fueling domestic demand, taking innovation as the driving force, and achieving inclusive growth. The urban population is under 50% of the total Chinese population, and the consumption rate is also less than 50%, considerably lower than those in developed countries and even other developing countries in the same development stage as China. So, there is still a long way to go in urbanization, and our people have great consumption potentials. We need to focus on the strategic economic restructuring, make overall plans for advancing the industrialization, urbanization and agricultural modernization, improve and extend the long-term mechanism for consumption, and enable the economic growth to be based on domestic demand. The transformation-based development is in nature the development driven by innovation. We will fully take advantage of the human resources in our country, give play to their wisdoms, advance the S&T innovation, and increase the S&T content of the economic growth. The intent and purpose of transformation-based development is to enable the development gains to be used as much as possible to improve people's living standards. We will adhere to the people-centered principle, take the survival and development of the 1.3 billion populations as the starting point, carry out a batch of major projects intended for improvement of people's living standards, weave up a "safe net" for maintaining people's subsistence, and constantly improve people's life quality in the development course.
Third, efforts need to be made to advance the balance and interaction between economic and social development with the resources and environmental conservation. We are well aware that the resources will not be supporting, the environment will be beyond carrying capacity, and the economy will be hard to sustain without changing the extensive growth patterns. China will make full use of the target-driven mechanism for resources conservation and environmental protection, promote the technical updating and industrial upgrading, and promote the transformation of the entire economy. We will speed up the industrial restructuring and optimization, and save resources and protect the environment at the sources. In the meantime, we will make greater efforts in treatment of water pollution, air pollution, and soil pollution, give top priority to solving environmental problems that have negative impact on the public health, try to treat pollution of previous times and not contribute to new pollution, create livable environment, and constantly improve people's life quality. It is the fundamental point of transformation-based development, and we will never take the old path of achieving economic growth at the cost of the environment.
Fourth, a modern industrial system aimed at energy conservation and efficiency improvement will be put in place to support the transformation-based development. There is a big gap between China and the world in terms of the comprehensive energy efficiency, and there is great potential for energy conservation and efficiency improvement. The focus of energy conservation is getting to the root cause and at the source, while the focus of efficiency improvement is the industrial optimization. We will further phase out inefficient production capacity, curb the development of energy-intensive and highly polluting industries, carry out major projects on energy conservation in the industrial, transport, and construction sectors, encourage the companies to promote the large-scale transformation to energy efficient technologies, and enable the traditional industries to conduct cleaner production and reinvigorate. In the meantime, we need to vigorously develop emerging industries and high-tech industries including energy conservation, environmental protection, circular economy, and low-carbon industries, and accelerate the development of the service industry. In the next five years, we will take comprehensive measures to bring down the energy use per unit of GDP output by 16%, and bring the proportion of the added-value of the service industry up by 4 percentage points. "One down and one up" may greatly improve the economic growth quality and the benefits, and is an integral part of the transformation-based development.
Fifth, the reform and opening up policy will be the driving force for the transformation-based development, which is actually an extensive and thorough reform. China's economic restructuring is entering a profound and daunting stage, and the transformation will have no vigor or guarantee without ensuing reforms. We will carry out the reforms throughout the economic transformation process, try to make breakthroughs in key sectors and links, and under the guidance of relevant mechanism, enable the economic development to take a path with change of development mode and restructuring. Price is the most sensitive signal of the market, so we will give priority to the pricing reform on resource products, try to introduce differential and stage-based consumption policies for energy and resources, and enable the pricing mechanism to play a better role in regulation. Investment, fiscal, taxation, financial, and trade policies are powerful leverages for regulating the corporate behaviors, so we'll work faster to improve these measures. Effective incentive and disincentive mechanisms will be established through deepening reforms, so that the idea of transformation-based development can be more and more popular with the people and becomes the self-conscious behaviors of companies and the whole society.
China's transformation-based development is under way in the context of economic globalization and it is open-ended. We will implement more proactive opening-up strategies, expand the opening-up areas and space, survive the test of the global market, optimize the foreign trade structure, use the foreign capitals in an innovative approach, and realize mutual benefits and win-win situation. In the meantime, we will also fuel the domestic demand while expanding the opening-up areas and space, adjust the structure amidst international competition, and enhance the economic strength and quality. Environmental protection is a common cause of the mankind. We will engage in international environmental cooperation with a responsible attitude, absorb state-of-art environmental ideas and management experience from abroad, and do a better job in advancing the development of ecological civilization. To take the initiative to address climate change is the strategic move for China's economic and social development. We are ready to work with the international community towards the success of the upcoming Durban Summit on Climate Change and make new contributions to the world sustainable development.
Dear Council members and experts,
This year is the 20th anniversary of the CCICED and the last year of its fourth phase. The Council has organized nearly 1,000 Chinese and international experts over the past two decades to conduct a raft of far-sighted and strategic studies on the major issues in the fields of environment and development in China, and proposed policy recommendations, many of which have been adopted by the Chinese Government and proven effective. In the passing five years, the fourth phase of the Council has focused on the development of the 12th Five-Year Plan for National Economic and Social Development, carried out a batch of significant policy study programs, and contributed wisdoms and strength to the sustainable development cause of the country. I would like to extend gratitude for your efforts. The Chinese Government has said yes to the running of the fifth phase of the Council. I hope that in its new phase, the Council would continue to take the advantage of its rich human resources and open visions, look at the reality and future of China's environment and development field, take the initiative to introduce advanced ideas and practices from the international community, conduct thorough studies on major issues, and do a better job in serving the country's transformation-based development.
I wish a great success of the meeting, and every success of your work, good health to the Council members, experts and guests. I wish you all the best!
Thank you.

(This English version is for your reference only.In case any discrepancy exists between the Chinese and English context, the Chinese version shall prevail.)

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