Premier Wen Jiabao said the government's main concern last year was the stimulus package to fight the financial crisis. He said last year's experience showed the government was correct to stick to the market mechanism, balancing short-term concerns with long-term strategy, and taking both domestic and international considerations into account. He said it was important to align improvements in living standards with economic growth and to incentivize central and local governments.

Wen said 2010 will be a crucial year as China strives to maintain rapid economic growth while reforming its growth model. The global situation will improve this year but the world economy remains fragile. Many countries are facing hard choices on monetary policy. With commodity prices and exchange rates fluctuating, trade protectionism has resurfaced. Under these circumstances, China faces numerous uncertainties, he said.

China has great potential to boost domestic demand as industrialization and urbanization accelerate, Wen said. But it has undeniable domestic problems. The Chinese economy lags behind in innovation and internally-generated growth; farmers' incomes lag behind, the financial sector faces growing uncertainty; other major issues include medical care, education, housing and the skewed distribution of wealth. Wen said China must not be blindly optimistic about the current situation. China's economy is picking up steam but has not fully recovered.

Wen said the government would continue to implement a proactive fiscal policy and a moderately easy monetary policy. But increasing emphasis will be placed on adjusting the structure of development, and managing inflation expectations.

Wen said the financial crisis had not only hit GDP growth, but had challenged the Chinese development model. He said a growth model based on massive investment, high consumption of resources, high levels of pollution and low efficiency is unsustainable. China must shift its development model towards energy and resource conservation, progress in science and technology and building a highly skilled workforce. He said the country needs to rebalance investment and consumption, and imports and exports, to bring its development model in line with the concept of scientific development.

Wen said the government will continue to take steps to improve people's livelihood, paying attention to employment, social security, income distribution, housing, education and rural living standards.

Wen reaffirmed the government would continue reform and opening up, adding that progress would be made in the reform of state-owned enterprises, resource pricing, finance and taxation, and reform of government institutions.

Premier Wen also addressed the issue of culture, pointing out that China's development requires not only economic strength but also cultural development. He said if China did not improve its cultural and ethical level it could not become a developed nation.

Wen reaffirmed China's stand on climate change and committed to exploring low-carbon technologies, promoting high-efficient energy-saving technology, and developing new and renewable energy sources. Concrete measures will include construction of smart grid, the planting of not less than 6 million hectares of forest. He underlined China's commitment to active international cooperation on climate change.