3. Further progress was made in development of the western region, and the revitalization of Northeast China and other old industrial bases got off to a good start. Notable results were achieved in infrastructure development in the western region. A total of 80 billion yuan was invested to fund 10 new major projects in 2004. The entire West-to-East Natural Gas Pipeline Project was put into commercial operation as scheduled. Additionalpower-generating capacity of 8 million kilowatts went on line in the West-to-East Electricity Transmission Project, raising the total installed power-generating capacity to over 20 million kilowatts. An additional 396 kilometers of track was laid on the Qinghai-Tibet Railway. Expanded or newly built airports in Xingyi,Lhasa, Hotan and Yan'an were put into operation. The natural environment was improved. We returned 667,000 hectares of farmlandto forest, afforested an additional 3.255 million hectares of barren hills and uncultivated land, and improved 5.6 million hectares of seriously degraded grassland. Restructuring and technology upgrading in Northeast China and other old industrial bases was accelerated. Hi-tech projects for enhancing the ability of enterprises to make technological innovations were carried out smoothly. Work to solve the problem of sinkholes in coalmining areas went into full swing. In the eastern and central regions, wecontinued to develop distinctive economies under macroregulation and accelerated structural adjustments.

    4. Economic restructuring was further deepened, and China opened wider to the outside world. All controls on the grain market were lifted. The pace of introduction of the shareholding system in large state-owned enterprises was quickened. A basic framework for oversight and management systems for state-owned assets was established. The experimental reform to transform the Bank of China and the China Construction Bank into stock companiesprogressed smoothly. The pilot reform of rural credit cooperativeswas expanded. Important progress was made in the reform to deregulate interest rates and make them subject to market forces. Implementation of the reform of the investment system was begun. Taxes on all agricultural specialties except tobacco were rescinded, and the agricultural tax was reduced or exempted. Pilotprojects to transform the VAT were begun in the old industrial base of Northeast China. The reform of export tax rebate mechanismwas fully implemented. We continued to deepen the reform of the administrative approval system, eliminating or streamlining 495 more items requiring administrative approval. We continued to carry out pilot projects for a new cooperative medical care systemin rural areas and to reform the urban medical service system. Thereform of the cultural system progressed smoothly. 

    China's foreign trade leapt to a new level. The total volume ofthe country's imports and exports reached 1.1548 trillion US dollars for the year. Exports accounted for 593.4 billion US dollars, up 35.4 percent year-on-year, and imports amounted to 561.4 billion US dollars, up 36 percent, yielding a trade surplus of 32 billion US dollars. The export mix continued to improve, with rapid increases in the export of electromechanical products and new and high technological products. China's foreign reserves totaled 609.9 billion US dollars at the end of 2004. We made more and better use of foreign capital, with the amount of foreign direct investment actually used over the past year totaling 60.6 billion US dollars, an increase of 13.3 percent. Investment in theservice sector continued to increase, and the number of R&D centers and regional headquarters established by multinational companies in China increased significantly. Further progress was made in implementing the "go global" strategy. Implementation of the Closer Economic Partnership Arrangement between the mainland and Hong Kong and between the mainland and Macao went smoothly.