Wen: Ladies and gentlemen, good morning. As you know, there are more than 2,000 journalists from China and abroad covering the NPC and CPPCC sessions. However, due to the limited seating capacity of this hall, only about 700 of them are present here. I'd like to use this opportunity to express my thanks to the journalists for their interest in China's reform and development as well as their objective and fair coverage of China.
Let me also say, as a matter of fact, every person in China has great interest in the affairs of their own country. Yesterday I logged onto xinhuanet.com and saw hundreds of questions raised by ordinary people, since they knew I was going to give a press conference. I was deeply touched by their interest in national affairs. Many of their proposals and suggestions narrowed the serious consideration of the government.

Now the session of the NPC is over, yet the road ahead could be rather bumpy. We must be mindful of potential problems and get fully prepared for the worst. We must be sober-mined, cautious, prudent especially when the situation is getting a little better.

Our nation has gone through so many disasters and hardships in history that we are now blessed with the essence of urgency, determination for survival and aspirations for peace and development. Our country is so big, problems so numerous and complicated. And we, as a nation, must have courage to overcome difficulty, confidence to win and dauntless spirit to work hard and prevail.

Today I'm here at this press conference ready to answer your questions. I'll speak from my heart. I'm neither nervous nor afraid.

Xinhua: Last year, you said macro-regulation was a new and severe task for the government. It was no easier a task than fighting against SARS. Now that a year has passed could you comment on last year's work with regard to macro regulation? Could you speak to new features and characteristics of macro regulation for this year? Will you intensify the policy measures?

Wen: In the past couple of years, we have been facing a battle of contact in terms of economic development. To fight this battle, we have combined a series of policies. We can say now these policy measurers have achieved remarkable results.

We have been successful in avoiding major ups and downs in the economy, preventing excessive price hikes, keeping prices at a stable level and maintaining steady and fairly rapid economic growth. Now we must not slacken in our efforts in the slightest way. The situation we are facing now is like going upstream. If we don't forge ahead, we will be left lagging behind. Let me put the problems we face in proper prospective.

First, the foundation for macro regulation needs to be consolidated further. We face considerable difficulty in further raising grain output and increasing farmers' income. In particular, because of price rises in capital goods, it is more difficult for us to achieve these goals in terms of increasing grain output and farmers' incomes. Moreover, investment growth in fixed assets may pick up again. Coal, electricity, oil and transportation are in short supply. In the first two months of this year, power generation has increased by 12 per cent. Yet 25 provinces, autonomous regions and municipalities experienced blackouts. In the economy, the supply chain is overstretched.