He also promised almost $30.5 billion in increased spending on old age pensions, workers' compensation and other forms of social security.
Wen said the government would pay more attention to concerns of farmers and workers over corruption, land seizures and environmental problems and act quickly to address such complaints.
Wen called on banks to not only increase credit to rural areas, but to strictly limit loans to industries that consume large amounts of energy or are highly polluting. He said that highly polluting, small thermal power plants and "backward iron foundries and steel mills" would be shut, and market forces and taxes would be used to save energy and cut pollution in other industries such as cement and aluminum.
Wen also promised to improve China's industrial safety record.
On the military, Wen said the government would speed up the transformation of China's 2.3 million armed forces into a high-tech fighting force.
"We must energetically carry out the transformation from military training based on mechanized warfare to military training … to increase the troop's ability to fight a defensive IT (information technology) war," he said.
On Sunday, Jiang Enzhu, a spokesman for China's national legislature, said the $44.94 billion defense budget for 2007 would mainly be spent on boosting wages and living allowances for members of the armed forces and on upgrading armaments.
The 2007 budget marks an increase of $6.84 billion over last year and is the third highest jump since 1990, surpassed only by increases of 21 percent in 1995 and 18 percent in 1994.
In his speech Monday, Wen repeated Beijing's opposition to efforts by Taiwan activists to make the island's de facto independence permanent. He said the mainland would promote direct transport and communications links across the Taiwan Strait.
"We firmly believe that with the efforts of all Chinese people, including our Taiwan compatriots, complete reunification of China will definitely be realized," he said.