Today, the 1.3 billion Chinese people have caught up with the times. They are firmly on the path to prosperity. Socialism with Chinese characteristics is full of vigor and vitality. The Chinese nation, which has made important contributions to the progress of human civilization, is now standing firm in the East.
In the past 30 years, building on the achievements made since New China was born, we have made remarkable achievements in all our endeavors. Reform and opening up has been our driving force.
With institutional reform in various sectors, we were able to turn a highly concentrated planned economy into a vigorous socialist market economy. To set up and improve the socialist market economic system, we have installed a two-tier management system that is based on the household contracting system and features an integration of unified management with separate management. A basic economic system was established, with public ownership as the pillar and all forms of ownership developing together. A distribution system was installed mainly on the principle of distribution according to work, while allowing other modes of distribution. An economic management system has taken shape, enabling the market to play the basic role in resource allocation under the macro-regulation of the government. Along with deepening reform of the economic system, we have reformed political, cultural and social institutions, creating flourishing entities to suit China's actual circumstances.
By opening our door wider, we have turned a closed or semi-closed society into a completely open one. This is a historic change. We have persisted in the basic policy of opening up to the outside world in our economic development and stepped up the growth of an open economy. Special economic zones have been established, followed by the opening of the coastal areas, areas along big rivers, the border regions and the hinterland, and finally, accession to the WTO. From "introducing foreign capital and technology into China" to "going global," we were able to avail ourselves of both domestic and international markets and both Chinese and foreign resources. This has helped strengthen China's international competitiveness. During the period from 1978 to 2007, the total import and export of China increased from $20.6 to $2.17 trillion, ranking the third in the world and becoming the No.1 country in terms of foreign reserves. The paid-up overseas investment amounted to nearly $1 trillion. International cooperation speeded up China's economic development while contributing a lot to the world economy.
As we concentrated our efforts on economic development, our national capacity has improved significantly. Our GDP rose from 364.5 billion yuan in 1978 to 24.95 trillion yuan in 2007, the average annual growth rate being 9.8 percent, more than three times the world average during the same period. China's economy now ranks fourth in the world in terms of GDP. By relying on our own efforts, we have been able to provide adequate food to a population of 1.3 billion. Our main agricultural and industrial output now ranks first in the world. Major world-class scientific and technological innovations continue to emerge. The high and new technological industries are developing vigorously. Rapid progress has been made in the construction of infrastructure including water conservancy, energy, transportation and telecommunication. The ecological environment keeps improving. Both the city and the countryside have taken on a new look.
We have paid great attention to improving people's lives. On the whole, our people now live moderately prosperous lives. The past 30 years saw the fastest increase in the income of people both in the cities and the countryside. The people have benefited a great deal from the reform and opening up policy. The average annual disposable income of city and town residents rose from 343 yuan in 1978 to 13,786 yuan in 2007, an increase of 6.5 times. The average annual income of farmers rose from 134 yuan in 1978 to 4,140 yuan in 2007, an increase of 6.3 times. The poor population in rural areas went down from 250 million in 1978 to 14 million in 2007. The average per-capita living space for both city residents and farmers has multiplied. People are richer, have better food and clothes, live in larger homes and enjoy better transportation services. The economy of shortage that had plagued us for a long time before reform and opening up has been fundamentally changed.
Our people's right to run the country is better protected as we are promoting socialist democracy. Political reform is deepening. The system of people's congresses, the system of multi-party cooperation and political consultation under the leadership of the CPC, the system of regional autonomy for ethnic minorities and the system of grass-root self-governance have all continued to improve. A legal system with Chinese characteristics is taking shape. The rule of law is being effectively practiced. Major progress has been made in building a socialist legal system. Citizens' participation in politics is expanding. Human rights are being improved in all aspects. The Patriotic United Front is expanding. There is greater harmony among different political parties, ethnic groups, religions, social strata and between Chinese on the mainland and overseas.