The fourth session of the 11th National People's Congress, and the fourth session of the 11th National Committee of the Chinese People's Political Consultative Conference, will be held beginning next week.

One important agenda to be weighed during the two sessions is to review and approve the outline for the nation's 12th five-year plan covering the period for 2011 to 2015.

Since 1953, China has drawn up eleven five-year plans. Through the implementation of these plans, China has achieved marked successes.

China's annual economic growth rate exceeded 10 percent during the past five years. In 2010, China's gross domestic product expanded 10.3 percent year on year to 39.8 trillion yuan (6 trillion U.S. dollars), surpassing Japan as the world's second largest economy.

However, China still faces great challenges, including a widening wealth gap, unbalanced development between urban and rural areas, weak competitiveness in its industries and enterprises and an economic growth model which over-relies on investment and exports.

Wu Jinglian, senior research fellow of the Development Research Center of the State Council, or China's cabinet, said the transformation of the nation's economic development pattern is the key to solving long-term economic problems.

China would stick to the strategy of expanding domestic demand, consumption in particular, and seek a new phase of economic growth boosted by consumption, investment and exports, according to the outline of the 12th five-year plan.

"Boosting domestic consumption could offset an expected slower pace of growth in the global economy that may reduce demand for Chinese goods," Wu said.

"China would also address rising concerns about income inequality and social instability, and strive to reduce some of the structural factors behind China's high household saving rate," said Ding Yuanzhu, a researcher with the National School of Administration.

The income distribution system would be improved, especially for residents with middle and relatively low salaries, so as to expand their consumption capacity, the outline said.

Also, the government vowed to improve people's livelihoods over the next five years. The ratio of government expenditure on living standards and social programs would be raised. Social security coverage would be extended and the public service system would be improved to build positive public expectations.

Ding said the government has improved its ability in providing public services, such as the launch of a rural endowment insurance system and rural medical cooperative system, during the past decade.

"However, it was the first time for the government to put forward the establishment of a comprehensive public service system covering both urban and rural residents and the equalization of basic public services in a five-year plan proposal, which indicates the government set higher goals for itself in improving people's livelihoods.

"China should further perfect its public finance management and give more support to underdeveloped and landlocked regions to achieve equalization of basic public services," Ding said.

The formulation of the 12th five-year plan, which began at the beginning of 2008, involved thousands of people and solicited public opinions extensively.