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Second, we need to maintain a proper balance between ensuring steady growth and making structural adjustments.

In its current stage of development, China has to deal simultaneously with the slowdown in economic growth, making difficult structural adjustments, and absorbing the effects of previous economic stimulus policies. As resource-related and environmental constraints grow and costs for labor and other factors of production rise, a model of development that draws on high levels of investment and energy consumption and is heavily driven by quantitative expansion becomes difficult to sustain. We must therefore improve the economic structure while ensuring steady growth. The growth rate must be kept steady to ensure that economic performance is stable, and that employment and personal incomes carry on increasing, thus creating a favorable environment for making structural adjustments and transforming the growth model.

At the same time, structural adjustments must be made to consolidate the foundation for ensuring steady growth. We need to increase research and development spending, raise total factor productivity, improve quality, standards, and brand-building, strengthen the service sector and strategic emerging industries and increase their share of the economy, improve the Overall structure of economic growth, and work harder to foster new areas of growth and growth poles. With these efforts, we can ensure that economic upgrading and development reinforce each other.