China are clearly aware that there are still many difficulties and problems in China's economic and social development that we cannot afford to ignore, the top legislature was told Saturday.

Ma Kai, minister in charge of the State Development and Reform Commission, made the remarks in his report to the legislature on the implementation of the 2003 Plan for National Economic and Social Development and on the 2004 Draft Plan for National Economic and Social Development.

"Some longstanding, deep-rooted problems have yet to be solved, and there are still structural barriers holding back economic and social development," he said.

Moreover, he added, there are new circumstances and problems affecting the operation of the economy.

Farmers have difficulty increasing their incomes and grain production has dropped considerably, as the increase in per capita net income for the rural population in 2003 was 0.5 percentage points lower than in 2002, he said.

The problem of indiscriminate expropriation of arable land is serious, and grain output for 2003 decreased by 26.4 billion kilograms year-on-year, said the minister.

The problem of unemployment remains serious as there were about14 million laid-off workers and unemployed people in cities and towns, and approximately 10 million new urban residents are expected to enter the labor force this year, he said.

In addition, large numbers of surplus rural laborers still need to shift to non-agricultural industries and urban areas.

He noted that there is a wide income gap among some members of society, and in both urban and rural areas many low-income people lead a fairly difficult life.

The minister said the country's economic structure is still irrational, and too much of its economic growth is based on extensive production, and the problems of haphazard investment and low-level, redundant expansion are worsening in some industries and localities, resulting in excess energy consumption, serious waste of resources and environmental pollution.

He added that economic and social development remains imbalanced in China as the public health service system is far from sound and the situation that rural education remains weak as a whole requires fundamental changes.

The order of the market economy, he noted, remains somewhat chaotic.

"We urgently need to improve the social credit system. Major industrial accidents occur frequently. We need to take a long-term perspective rooted in the present and solve these problems through reform and development," Ma said.

(Xinhua News Agency March 6, 2004)