Following is the full text of the Report 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, delivered at the Second Session of the
Tenth National People's Congress on March 6, 2004:
REPORT 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
By Ma Kai Minister in Charge of the National Development and Reform
Commission
Fellow Deputies,
As entrusted by the State Council, I am now reporting to this session 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. I am
presenting these to you for your examination and approval and also for comments
and suggestions from members of the National Committee of the Chinese People's
Political Consultative Conference (CPPCC). I. Implementation of the 2003 Plan
for National Economic and Social Development
Acting in accordance with the resolution on economic and social development
adopted at the First Session of the Tenth National People's Congress (NPC), the
people of all our ethnic groups vigorously worked under the leadership of the
Communist Party of China (CPC) to promote reform, opening up and the
modernization drive over the past year. We won a great victory in the fight
against the severe acute respiratory syndrome (SARS), and we overcame natural
disasters and other difficulties. Our national economy had rapid growth, good
performance and strong vitality, and we successfully attained our main targets
for economic and social development.
1. The economy grew rapidly, and economic efficiency improved significantly.
China's GDP hit 11.6694 trillion yuan in 2003, a 9. 1% increase over the
previous year. Per capita GDP rose to 9,030 yuan, exceeding the important
benchmark of US$1,000 for the first time when calculated at the present exchange
rate. Growth of domestic demand was accelerated. Investment in fixed assets for
the whole country was 5.5118 trillion yuan, a year-on-year increase of 26.7%.
Retail sales of consumer goods totaled 4.5842 trillion yuan, up 9.1%. Consumer
prices rose by 1.2%.
Economic efficiency improved in step with economic growth. Government revenue
for the entire country was 2.17 trillion yuan, 14.7% more than the previous
year. Economic efficiency in the industrial sector reached a record high. Total
profits of state- owned and large non-state owned industrial enterprises were
815.2 billion yuan, an increase of 42.7%, 22 percentage points greater than the
previous year. State-owned enterprises and enterprises with the controlling
stake held by the state generated 378.4 billion yuan in profits, an increase of
45.2%. Of the industrial products made last year, 98.1% were sold.
2. Structural adjustment was vigorously carried forward, and economic
vitality continued to improve. The acreage devoted to high-quality crop
varieties increased. The acreage sown to high- quality special wheat accounted
for 38% of China's total acreage sown to wheat, 7 percentage points higher than
the previous year. Principal crops were further concentrated in the areas with
the most suitable conditions. The livestock and fishery industries continued to
develop, and the output of dairy products increased by 25%. Smooth progress was
made in major agricultural, forestry and water control projects. Manufacturing
industries with a high technological content led industrial growth. The
production of electronic and information products grew by 34%. Treasury bonds
continued to play a major role in promoting structural adjustments. A number of
projects of great importance for long-term economic and social development were
completed and put into operation, and they performed well. Water was
successfully stored in the Three Gorges Reservoir; permanent locks on the Three
Gorges Project were opened to navigation; and the project's first set of
generators began producing power. Construction was started on the eastern and
central routes of the South-to-North Water Diversion Project. An additional
46,000 kilometers of highways and 1,164 kilometers of newly completed railway
lines were opened to traffic. The power industry developed more quickly. The
country produced 1.9 trillion KWH of electricity in 2003, 15.5% more than in
2002. The generating capacity of newly started projects and projects put into
operation during the year each totaled more than 30 million KW. Tertiary
industry continued to develop, and some new service industries expanded rapidly.
The number of telephone subscribers reached 532 million, a year-on-year increase
of 112 million.
Economic growth was driven to a greater degree by internal momentum. The
total amount of funds invested by enterprises from their own resources for
technological upgrading increased by 30.2%. The non-state sector of the economy
invested actively. Investment from collective and individually-owned businesses
grew by 22.9%, 6. 1 percentage points greater than the previous year. Exports
from collective and private businesses rose by 83.1%, contributing significantly
to the rapid growth of China's exports.
3. New strides were made in developing the western region, and implementation
of the strategy for reinvigorating northeast China and other old industrial
bases began. Ecological conservation and environmental protection work in the
western region was further intensified. Some 3.37 million hectares of farmland
were returned to forests; 3.77 million hectares of barren hills and wasteland
were afforested; and 6.66 million hectares of seriously degraded grassland were
improved. Greater efforts were put into infrastructure development. An
additional 317 kilometers of track was laid on the Qinghai-Tibet railway line.
The eastern section of the West-to-East Natural Gas Piping Project was
completed, allowing natural gas to be delivered to east China. An additional
power transmission capacity of over 8 million KW was installed as part of the
West-to-East Electricity Transmission Project. Another 4,200 kilometers of
highways connecting county seats were built or upgraded. An adequate supply of
potable water was ensured for 8.6 million more rural people. More than 300,000
rural households had access to methane. Implementation of the strategy for
reinvigorating northeast China and other old industrial bases began. The eastern
and central regions accelerated their development, and new areas of economic
growth kept emerging.
4. There was all-round development in science, technology, education and all
other social undertakings as well as continued progress in ecological
conservation and environmental protection. Basic and hi-tech research was
intensified. Continued progress was made in the state innovation system. The
first successful manned spaceflight by Shenzhou-V was another milestone in
China's hi-tech development. Education continued to develop. Fresh progress was
achieved in compulsory education. Regular institutions of higher learning across
the country enrolled 3.822 million students, 617, 000 more than the previous
year. Efforts to develop public health facilities were intensified, and about 6
billion yuan from the sale of treasury bonds was allocated to develop an
anti-SARS infrastructure, disease prevention and control networks at the
provincial, prefectural and county levels, and a public health emergency
response system. The rate of natural population growth was 6.01. Implementation
of key cultural projects proceeded smoothly. Radio, film, TV, the press,
publishing, sports and other undertakings continued to develop.
Ecological conservation and environmental protection were intensified, and
economical and multipurpose utilization of natural resources was promoted. Some
2.05 million hectares of forests were developed to improve ecological conditions
or serve as shelterbelts. Banning or temporarily suspending animal grazing
allowed for 8.6 million hectares of grassland to be effectively protected and
rationally utilized. Pollution control and treatment were accelerated in key
river valleys and regions, including the drainage basins of the Huaihe, Haihe
and Liaohe rivers, Taihu, Chaohu and Dianchi lakes, and the Three Gorges
Reservoir. The percentage of urban sewage receiving centralized treatment, the
percentage of urban household garbage safely disposed of, and the multipurpose
utilization of industrial solid waste all increased moderately.
5. The various reforms pressed ahead in an orderly manner, and China
continued opening wider to the outside world. Institutional restructuring of the
State Council was completed smoothly, and steady progress was made in
institutional restructuring of provincial-level governments. The experimental
reform of rural taxes and administrative charges was carried out throughout the
country. Important steps were taken in the reform of the state- owned assets
management system and state-owned enterprises. Reform of the electric power,
telecommunications and civil aviation industries was continued. The export tax
rebate mechanism was improved. The reform of state-owned commercial banks was
accelerated. The Chinese People's Insurance Company and the China Life Insurance
Company completed their reorganization and transformation into stock companies
and were successfully listed on overseas stock exchanges. Smooth progress was
made in the trial reform of rural credit cooperatives in eight provinces and
municipalities directly under the central government. Trials for restructuring
the cultural system were started in selected regions. Major and important cases
were investigated and prosecuted in the course of rectifying and standardizing
the order of the market economy, resulting in gradual improvement of the market
environment.
Foreign trade grew rapidly. Imports and exports totaled $851.2 billion, a
year-on-year increase of 37.1%. The scope of foreign investment continued to
expand, and the quality of foreign investment utilization constantly improved. A
total of $53.5 billion in foreign direct investment was actually utilized. Fresh
progress was made in implementing the strategy of "going global," and overseas
investment was further expanded and diversified.
6. More jobs were created, and people's lives continued to improve. A total
of 8.59 million more urban residents found jobs, and 4.4 million laid-off
workers were reemployed in 2003; both figures exceeded the targets set for the
year. The registered unemployment rate was 4.3% in cities and towns at the end
of 2003. The urban population had a per capita disposable income of 8,472 yuan,
an increase of 9% in real terms, and the rural population had a per capita net
income of 2,622 yuan, an increase of 4.3% in real terms. Living allowances for
laid-off workers and old-age pensions for retirees were basically paid on time
and in full. Social security coverage further increased, as more people became
covered by old-age, medical, unemployment or workman's compensation insurance.
Some 22.35 million urban residents received subsistence allowances, 1.7 million
more than in 2002. The government allocated special funds to help people in
disaster- afflicted areas restore production and improve their living
conditions. Programs to give people work in place of relief subsidies continued
to expand. Better roads and supplies of electricity and potable water in
poverty-stricken areas improved working and living conditions there. Steady
progress was made in pilot programs to move impoverished people out of areas
afflicted by extremely poor ecological conditions.
Because of the complicated and volatile international situation, the
unexpected SARS outbreak and the numerous natural disasters, these achievements
in China's economic and social development were made only with great difficulty.
They are attributable to the correct leadership of the CPC Central Committee
with Comrade Hu Jintao as General Secretary, which maintained control of the
overall situation and remained calm and resolute in making decisions. Credit
also goes to local authorities and government departments, which consciously
followed the important thought of Three Represents, unified the broad masses of
cadres and people and worked hard in a down-to-earth manner. These achievements
are also due to the National People's Congress strengthening its oversight and
guidance and the CPPCC taking an active part in the deliberation and
administration of state affairs.
While affirming our achievements, we are clearly aware that there are still
many difficulties and problems in China's economic and social development that
we cannot afford to ignore. Some longstanding, deep-rooted problems have yet to
be solved, and there are still structural barriers holding back economic and
social development. Moreover, there are new circumstances and problems affecting
the operation of the economy. First, farmers have difficulty increasing their
incomes and grain production has dropped considerably. The 2003 increase in per
capita net income for the rural population was 0.5 percentage points lower than
in 2002. The problem of indiscriminate expropriation of arable land is serious.
Grain output for 2003 decreased by 26.4 billion kilograms year-on-year. Second,
the problem of unemployment remains serious. We still have about 14 million
laid-off workers and unemployed people in cities and towns. Approximately 10
million new urban residents are expected to enter the labor force this year. In
addition, large numbers of surplus rural laborers still need to shift to
non-agricultural industries and urban areas. Third, there is an excessively wide
income gap among some members of society, and in both urban and rural areas many
low-income people lead a fairly difficult life. Fourth, the economic structure
is still irrational, and too much of our economic growth is based on extensive
production. 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.
Considerable disparity remains between supply and demand in coal, electricity,
oil and transport capacity, and the shortages of resources are increasingly
affecting development. Fifth, economic and social development remains
imbalanced. The public health service system is far from sound. The situation
that rural education remains weak as a whole requires fundamental changes.
Sixth, the order of the market economy 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.
II. Regulatory Targets and Main Tasks for Economic and Social Development in
2004
The year 2004 is an important year for achieving the targets set in the Tenth
Five-Year Plan and a crucial time for maintaining good momentum in economic
growth. To ensure economic and social development this year, we must follow the
guidance of Deng Xiaoping Theory and the important thought of Three Represents
and fully implement the guiding principles of the Sixteenth National Congress of
the CPC and the Third Plenary Session of its Sixteenth Central Committee. We
must continue to put the people first and articulate and bring to fruition a
conception of all-round, balanced and sustainable development. In line with the
need to balance urban and rural development, balance development among regions,
balance economic and social development, balance development of man and nature,
and balance domestic development and opening wider to the outside world, we must
shift the focus of our economic work onto restructuring the economy, changing
the mode of economic growth, and improving its quality and efficiency. We must
nurture, guide and make good use of everyone's initiative in accelerating
development so as to bring about sustained, rapid, balanced and sound
development of the national economy and all- round social progress.
Our main macro-control targets for 2004 are as follows:
- Economic growth rate around 7%.
- Nine million new jobs for urban residents and registered urban unemployment
rate confined to 4.7%.
- Rise in the consumer price index of about 3%.
- Increase in total import and export volume of 8%.
To attain these targets, we need to focus on accomplishing the following
tasks.
1. Adopting comprehensive measures to increase rural incomes and maintaining
and increasing grain production capacity. Following the principle of "giving
more, taking less and loosening control," we will strive to increase rural
incomes, aiming for an increase in the per capita net income of 5% in 2004. We
will continue to carry out strategic restructuring of agriculture and the rural
economy. We will implement a plan to arrange where crops are grown so as to use
cropland to the best geographical advantage. We need to strengthen scientific
research in agriculture and apply research results more widely. We will promote
the development of intensive processing of farm and livestock products and other
non- agricultural industries in rural areas, and improve the distribution of
farm products. We will develop farmers' cooperatives for specialized production
and speed up industrialization of agricultural operations. We will strengthen
the emergency animal epidemic prevention system, improve the systems of quality
standards of farm products and for inspecting, testing and certifying them, and
implement the Action Plan for Pollution-Free Food. We will promote the
adjustment and transformation of township and village enterprises, selectively
develop small towns, and strengthen intra-county economies. Vocational training
will be offered to rural laborers, and better information will be provided to
guide the movement of surplus rural labor in an orderly way. The problem of
withholding or delaying payment of the wages of migrant rural workers in cities
must be solved, and a mechanism to ensure the timely payment of such wages will
be established and improved. Pay for farmers will be included in the budgets for
government-financed rural construction projects to ensure they are properly
paid. We will deepen the reform of rural taxes and administrative charges,
reduce the rates for agricultural taxes and eliminate taxes on all special
agricultural products except tobacco to effectively lighten the burden on
farmers. We will give more people work in place of relief subsidies as part of
the effort to improve the mechanism for alleviating rural poverty through
development. Emergency disaster relief work must be done well, and proper
arrangements will be made for the work and daily lives of needy rural
households.
We will strengthen our grain production capability and improve the country's
food security. The acreage sown to grain must be expanded. We will work hard to
increase the yield per unit area and ensure that grain output totals 455 billion
kilograms this year. We will practice the most stringent possible system for
protecting farmland. We will reform the way land is expropriated and
requisitioned and the mechanism of compensating for its expropriation and
requisition. The transformation of farmland to non-agricultural purposes will be
planned and managed strictly. We will launch a project to industrialize
production of high-quality grains, and establish a group of state production
centers concentrated in major grain producing areas to produce high- quality and
special grain crops. Investment will be increased to develop improved crop
strains, promote wider application of advanced agricultural techniques, prevent
and control plant diseases and pests, improve irrigated areas, develop dry
farming and water-saving irrigation, turn hillsides into terraced fields and
build silt trappers. Improvement of low- and medium-yield farmland will be
accelerated. Major grain consumption areas will also be obligated to protect
their primary farmland to maintain necessary grain production capacity and
ensure adequate local grain reserves.
2. Adjusting the orientation of investment using treasury bonds to make full
use of their role in promoting restructuring and balancing development. We will
ensure the continuity and stability of our macroeconomic policies, adhere to the
principle of stimulating domestic demand, and continue to implement a proactive
fiscal policy and a prudent monetary policy. At the same time, we will make
timely and appropriate adjustments to the emphasis and intensity of these
policies in response to changes in the economy. Premier Wen Jiabao pointed out
in his Report on the Work of the Government yesterday that we would issue 110
billion yuan worth of long-term construction treasury bonds this year. We must
manage and use them well in line with the resolutions of this session. This year
the focus of these funds will be shifted from the previous emphasis on expanding
domestic demand and stimulating economic growth to promoting restructuring and
balancing economic and social development. They will be mainly used for the
following: first, to increase support for developing agriculture and rural areas
by building more small and medium-sized infrastructure projects such as
water-efficient irrigation facilities, potable water supplies, roads, methane
production facilities, hydroelectric plants and pasture enclosure projects, so
as to promote balanced urban and rural development; second, to place greater
emphasis on developing social undertakings by investing more in infrastructure
projects for public health and medical care, elementary education, primary-level
governments, people's courts and public security, procuratorial and judicial
organs, so as to promote balanced economic and social development; third, to
support development of the western region and adjustment and transformation of
northeast China and other old industrial bases, so as to promote balanced
regional development; fourth, to continue to improve ecological conservation and
environmental protection, so as to promote balanced development between man and
nature; and fifth, to build more key infrastructure projects, so as to create
the conditions necessary for long-term, stable economic and social development.
We will speed up construction on key bond-financed projects. The preparatory
work for laying the track on the Qinghai-Tibet railway line will be basically
completed in 2004, and the cumulative length of laid track will reach 647
kilometers. We will accelerate the preliminary work on the South-to-North Water
Diversion Project and meet the schedule and quality standards for the
construction under way. The entire West-to-East Natural Gas Piping Project will
be put into commercial operation. An additional power-generating capacity of 8.2
million KW will go on line in the West-to-East Electricity Transmission Project.
Construction will begin this year on the Chinese Center for Disease Control and
Prevention, the second phase of the National Library of China project and the
China Digital Library project. We will strengthen inspection, supervision and
management of bond- financed projects to ensure more efficient use of the funds
and the quality of these projects.
3. Adjusting and optimizing the industrial structure and keeping economic
growth stable. In line with the needs of the new road of industrialization we
are taking, we will promote technological innovation and speed up industrial
restructuring, emphasizing rejuvenation of equipment manufacturing industries.
We will accelerate the industrial application of advances in new and high
technology. We will continue working on hi-tech projects to develop live
broadcast satellite systems, the next generation Internet, biology and new
medicines. We will work to put the national economy and society on an IT basis.
We will put greater effort into upgrading centers for modern equipment
manufacturing industries and developing a group of new industries. We will
improve our capability for independent development and for producing complete
sets of key equipment. We will successfully carry out specific projects to
domestically produce urban mass transit equipment, environmental protection
equipment, heavy-duty industrial gas turbines, large-capacity hydroelectric
power generating facilities, coal mining combines and other major equipment.
At present, exercising appropriate control over the scale of fixed assets
investment and rigorously curbing haphazard investment and low-level, redundant
construction in some industries and regions constitute both an important task
for industrial restructuring and a pressing need to keep economic growth stable
and rapid and free from drastic fluctuations. We will strengthen and improve
macro-control, and guided by the market, we will use mainly economic and legal
means supplemented by administrative means to guide and promote sound
development of the iron and steel, electrolytic aluminum and cement industries.
We will vigorously encourage mergers and regrouping in these industries, support
enterprises that can benefit from economies of scale to expand rapidly, and
allow market forces to determine their success or failure. We will put into
practice all regulatory measures set forth in the Report on the Work of the
Government for providing guidance through state policy and planning and
industrial information, tightening market access and strengthening management of
land use and credit.
We must work hard to alleviate bottlenecks in economic development. We will
accelerate development of large coal mines and the coal transport system, so as
to increase the coal supply without compromising production safety. We will
continue developing power generating facilities and power grids in accordance
with the principle of giving priority to building power generating capacity and
ensuring its rational distribution. In 2004, construction will be started on
power plants with a combined capacity of 40 million KW, new power generating
capacity of 37 million KW will come on line, and desulphurization equipment will
be built simultaneously as required. We will improve management of power grids
and the demand for power to ensure a safe power supply. We will properly
organize the production and import of crude and processed oil and speed up the
building of a national strategic oil reserve. We will better regulate economic
operations in accordance with the laws of the market to balance supply and
demand in coal, electricity, oil, transport capacity and important raw and
processed materials. We will develop more trunk lines and transportation hubs.
The basic way to alleviate the disparity between supply and demand in coal,
electricity, oil, transport capacity and important raw and processed materials
is to increase the supply as much as possible and at the same time to
effectively change the pattern of economic growth, restructure the economy, and
restrict haphazard development of industries and enterprises that waste energy
and resources and cause serious pollution and to encourage all industries to
save energy and eliminate waste.
4. Implementing a proactive employment policy and continuing to expand
consumer spending and improve people's lives. We will further implement existing
measures such as fiscal and credit support and tax and fee cuts and exemptions
and do everything possible to create more jobs. We will give full play to the
role of labor-intensive industries, small and medium-sized enterprises and
non-public sectors of the economy in expanding employment. We will vigorously
develop the tertiary industry and expand avenues for employment in traditional
service industries such as business, food and beverage service and
transportation. We will create more jobs in the areas of public health, urban
environmental protection, medical care, as well as community and domestic
services. We will expand employment in tourism, education, training, culture,
sports and information services. We will promote diverse types of employment and
encourage people to be flexible in taking a job or become self-employed. We will
improve the employment service system, strengthen the reemployment assistance
system and provide better job training, job introduction and employment guidance
services to laid-off workers and the unemployed. We will work harder at job
placement for college graduates and ex-servicemen.
We will improve the consumer environment, expand consumer spending and
gradually increase the proportion of consumption in our GDP. While doing
everything possible to increase rural incomes, we will improve commodity
distribution facilities and commercial outlets in rural areas and develop
infrastructure facilities there such as those for water, power and roads, thus
creating conditions for rural residents to expand their consumption. We will
continue to implement the "three-stage guarantee" and ensure that the living
allowances for workers laid off from state-owned enterprises and the pensions of
retirees are paid on time and in full. We will improve the social assistance
system, provide subsistence allowances to the urban poor and help needy urban
families solve their practical problems. We will increase the supply of low- and
moderate-price commercial housing, stimulate the secondary housing market and
expand consumer spending on housing. We will vigorously develop urban public
transport services. We will steadily increase consumer spending on private cars
and communications. We will encourage people to spend more on travel, sports,
fitness and culture. We will accelerate the development of the credit system and
develop consumer credit. We must combine efforts to expand consumption with
those to strengthen regulation of income distribution. We will raise the minimum
wage appropriately to increase the incomes of urban residents, especially low-
and middle-income people. We need to strengthen supervision over income
distribution in monopoly industries and intensify collection and management of
individual income tax to regulate excessively high incomes.
5. Increasing revenue, reducing expenditures and ensuring steady and sound
financial operations. We will improve tax collection and management and crack
down on tax evasion and tax fraud to ensure steady revenue growth. We will
adjust the pattern of budgetary expenditures and tighten control over them. We
will focus on increasing funding to solve the problems facing agriculture, rural
areas and farmers and to support employment work, social security, education,
science, culture and health. We must ensure that government employees' salaries
and government retirees' pensions are paid on time and in full, and that state
organs receive the funding necessary for their normal operations. We will
continue to have zero growth in our general expenditures. Total national revenue
in the budget for 2004 is 2.357 trillion yuan and total expenditures are 2.6768
trillion yuan. This keeps the central government budget deficit within 319.8
billion yuan.
We will control the scale of credit reasonably by using a variety of monetary
policy instruments. We will focus on adjusting the pattern of credit and
encourage and guide commercial banks to provide more credit support to promote
restructuring, expand consumption and create more jobs. We will accelerate
development and improvement of the financial market, tighten financial
regulation, and guard against and defuse financial risks. We will constantly
improve the mechanism for determining the exchange rate for the Renminbi and
keep it stable at a rational and balanced level. The broad money supply (M2) and
the narrow money supply (M1) will both increase by about 17% in 2004.
6. Balancing the development of regional economies so that the eastern,
central and western regions can complement each other and develop together. We
will improve and implement all the policies and measures for developing the
western region. We will do a good job on major projects having a bearing on the
long-term development of the western region and small and medium-sized projects
vital to the immediate interests of the people there. We will provide more
funding for upgrading roads connecting county seats and building roads to
villages, and continue to solve the problem of a potable water supply for people
and livestock. Construction will be started on the Jiudianxia Water Control Hub
and other key projects. We will speed up the building of airports on feeder air
routes in the western region. We will build on our achievements in returning
cultivated land to forests, and effectively help those farmers and herdsmen
whose land has been returned to forests solve their problems of food, firewood
and low incomes. We will develop distinctive economic undertakings and
industries that have a competitive edge. The number of skilled personnel working
in the western region will be increased, and laws and regulations concerning the
region will be improved.
In implementing the strategy for revitalizing northeast China and other old
industrial bases, we will focus on making innovations in systems and mechanisms.
We will promote the strategic regrouping of enterprises in such key
manufacturing industries as iron and steel, automobiles, petrochemicals, and
heavy equipment. We will ensure full implementation of the fiscal, taxation,
social security and financial service policies that support the restructuring
and transformation of the old industrial bases. We will press ahead with helping
cities that rely mainly on natural resource exploitation to change their
economic model.
We will help the central region to exploit its overall advantages in
location, resources, trained personnel, and education, strengthen its
industrialized agricultural production and manufacturing centers, promote the
optimization and upgrading of its economic structure, foster new areas of
economic growth and become more industrialized and urbanized. The eastern region
will be encouraged to seize the opportunities to upgrade its industries and
technologies and become more competitive internationally, and areas where
conditions permit should take the lead in realizing modernization. Economic
exchanges and cooperation will be increased among the eastern, central and
western regions to create economic zones and belts with distinctive features.
7. Promoting steady growth of foreign trade and utilizing foreign funds
better. We will increase export volume and profits by following the strategy of
revitalizing foreign trade through science and technology, winning customers
through quality and diversifying our markets. We will improve the export tax
rebate mechanism. Good arrangements will be made to import important commodities
and advanced equipment that are in short supply in China. We will introduce the
foreign trade agent system, register foreign trade entities in accordance with
the law and ensure that enterprises have independent decision-making power over
their export and import activities, regardless of their form of ownership. We
will accelerate establishment of technological standards and improve the
early-warning system for industrial losses.
We will coordinate domestic development with opening up and continue to
implement policies and measures for expanding opening up and encouraging foreign
investment. We will place greater emphasis on acquiring advanced technologies
and managerial expertise from abroad and recruiting high-caliber foreign
personnel. We will improve our macro guidance for overseas investment and
improve fiscal, taxation and financial policies to encourage capable enterprises
to "go global," regardless of their form of ownership. We will strengthen
economic cooperation with our neighboring countries and regions and gradually
improve and fully implement closer economic partnership arrangements between the
mainland on the one hand and Hong Kong and Macao on the other.
8. Continuing to implement the strategy of sustainable development and
balancing social and economic development with population growth, resource
exploitation and ecological protection. We will continue our good work on key
ecological projects, including projects to protect natural forests, key
shelterbelt projects and projects to control the source of sandstorms affecting
Beijing and Tianjin. We will improve our overall ability to manage and protect
nature reserves, functional ecological zones, scenic spots and historical sites.
Measures will be intensified to control pollution in the drainage basins of the
Huaihe, Haihe and Liaohe rivers, Taihu, Chaohu and Dianchi lakes, and the Three
Gorges Reservoir and in areas along the routes of the South-to- North Water
Diversion Project, and to control discharge of sewage from large industrial
projects and pollution caused by acid rain and sulfur dioxide. We will continue
to prevent and control pollution in key industries and cities and increase the
proportion of urban sewage and garbage treated. We will promote clean production
and develop environment-friendly industries.
We will raise people's awareness of endangered natural resources and the need
to conserve them, vigorously develop recycling industries and establish a
conservation-minded society. We will improve plans, standards, policies, laws
and regulations for energy and water conservation. We will rapidly develop and
apply advanced applied technologies for conserving and replacing resources. We
will concentrate on technological upgrading of the metallurgical, nonferrous
metals, power, petrochemical, building materials and paper industries to help
save energy, water and materials and more fully utilize resources. We will
protect land and resources in accordance with the law, develop them rationally,
and pay attention to the exploitation and conservation of marine resources.
We will adhere to the basic state policy of family planning, keep the
birthrate low, and improve the health of newborns. The natural population growth
rate will be confined to 7 in 2004.
9. Continuing to promote development of science, technology and education and
developing all social undertakings. Development of the state innovation system
and the scientific and technological infrastructure will be accelerated. We will
strengthen basic and hi-tech research, promote the application of scientific and
technological advances in production, and improve the ability of enterprises to
make technological innovation. We will begin work on large national science
laboratories and installations such as the Shanghai Synchrotron Radiation
Facility. We will make good progress in constructing the National Nanoscience
Center. National engineering research centers will be set up in the fields of
biology, informatics, new materials and pharmaceuticals, and a number of
national key laboratories will be upgraded. We will support key enterprises to
build their state-level technology centers. We will energetically promote the
development of philosophy and social sciences.
We will implement the strategy of relying on talented personnel to strengthen
the country. We will energetically train, recruit and properly use all kinds of
talented personnel. The top priority for our work in education will continue to
be rural education. We will lose no time in improving the mechanism for ensuring
adequate funding for rural education to make it more regular and
institutionalized. We will intensify our efforts to make nine-year compulsory
education basically universal and to basically eliminate illiteracy among young
and middle-aged people in the western region. We will continue the project to
renovate dangerous primary and secondary school buildings in rural areas and the
national program to make compulsory education universally available in
poverty-stricken areas. We need to successfully carry out our pilot projects for
modern distance education in rural primary and secondary schools. We will
improve the system of government and non-government subsidies for students from
indigent families. We will work harder to develop high-quality universities and
key disciplines and improve the quality of higher education. We will increase
the number of key senior secondary schools and vigorously develop vocational
education and continuing education. Training of high-level technicians will be
stepped up. Plans call for enrolling of 4 million undergraduate students and
330,000 graduate students in regular institutions of higher learning in 2004.
We will actively develop culture, health, sports, radio, film, TV, the press,
publishing and other undertakings. Primary-level public cultural facilities will
be improved. We will better protect our natural and cultural heritages. We will
expedite development of our disease prevention and control system, public health
emergency response system, major epidemic disease information network and system
for supervising enforcement of health-related laws and regulations. We will
strengthen the medical and public health infrastructure and the environmental
sanitation infrastructure in rural areas. Application of digital and computer
network technologies in radio, film and TV will be accelerated. We will promote
the sound development of the sports industry. We will make good progress in
constructing Olympic venues and related facilities. III. Promoting Economic
Restructuring Vigorously but Prudently
In accordance with the decision made at the Third Plenary Session of the
Sixteenth CPC Central Committee, we must seize the favorable opportunities
presented by the rapid economic growth, the relatively desirable financial
situation and the fairly relaxed environment to push forward reforms in key
areas in a selective, planned way and eliminate structural obstacles to
developing the productive forces. This is of great significance for solving
current outstanding economic problems, attaining this year's targets and
continuing to develop for years to come.
Improving the fundamental economic system whereby public ownership is
dominant and diverse forms of ownership develop together. We will adjust the
distribution pattern and structure of the state sector of the economy more
quickly and improve the mechanism for redirecting investment of state capital so
that it can move more rationally. The system for managing and supervising state
assets will be improved. A budgetary system for state capital management and a
performance evaluation mechanism for enterprises will be established. The
transformation of state-owned enterprises into standard stock companies will be
vigorously promoted. We will strongly encourage state, collective and non-
public enterprises to invest in each other in order to promote a mixed ownership
economy. We will foster the formation of large internationally competitive
companies and enterprise groups and further reduce government control over small
and medium-sized state-owned enterprises so as to reinvigorate them. Measures to
support reforms in the power, telecommunications and civil aviation industries
will be improved. We will organize reform of the postal system well. We will
promptly work out plans for reforming the railway system. Commercialization of
water and gas supplies and other urban public utilities will be accelerated.
Diverse forms of collective economy will be developed. Development of non-public
sectors of the economy will be encouraged, supported and guided. We will fully
implement all policies that give non- public enterprises the same treatment as
other types of enterprises in market access, investment, financing, taxation,
land use and foreign trade. We will speed up the process of commercializing
services and improve services and oversight for non-public enterprises.
Promoting the reform of the fiscal, taxation and financial systems. Fiscal
systems at and below the provincial level will be improved and standardized, and
the financial resources at the disposal of governments at county and township
levels will be increased. We will gradually shift from a "production VAT" to a "
consumption VAT;" we will do this first in some industries in northeast China in
2004 on a trial basis. All measures for reforming the export tax rebate system
will be fully implemented. We will introduce a shareholding system in the Bank
of China and the China Construction Bank and continue carrying out pilot
projects for reforming rural credit cooperatives. Interest rates will be
steadily deregulated. Capital markets will be vigorously developed, and the
proportion of direct financing by enterprises will be raised. Management of
enterprise bonds will be improved, and the amount and types of the bonds they
issue will be increased. Regulatory systems for the banking, securities and
insurance industries and mechanisms for coordinating them will be improved.
Making arrangements for the reform of the investment system. We will promptly
formulate and improve measures to support reform of the investment system.
Enterprises will be able to make investment decisions independently in line with
the principle that "the investor makes the investment decisions, reaps the
profits and bears the risks." Scientific and democratic decision-making
mechanisms for government-funded projects will be improved, and examination and
approval procedures will be simplified and standardized. The contractor system
for construction will be vigorously promoted. We will establish an
accountability system for investment. While expanding enterprises'
decision-making powers over investment, we will strengthen the system of macro-
controls over investment. We will rely mainly on economic and legal measures
supplemented by administrative measures when necessary to curb haphazard
investment and low-level redundant construction in some industries and maintain
a rational scale of investment. A system for supervising and managing investment
will be established and improved.
Improving pricing mechanisms. We will promote the use of different
electricity prices for periods of high and low demand and high and low supply to
properly deal with serious pricing problems as they arise. We will reform the
mechanism for modulating air passenger and freight rates. Drug price management
will be improved and drug prices will be further reduced. Great efforts will be
made to reform the water pricing system to promote water conservation. The
system of charges for urban sewage and garbage treatment and disposal of
dangerous waste will be fully implemented. We will continue the system of public
notice of prices and charges. We will take into full consideration the ability
of all sectors of society to tolerate price changes, and we will control the
timing and magnitude of price adjustments to keep market prices basically
stable.
Deepening the reform of the grain distribution system. We will improve the
grain distribution system in line with the idea of lifting controls on grain
purchasing, directly subsidizing grain producers, changing the way grain
enterprises and strengthening macro-control. The system of direct subsidies for
grain producers will be gradually improved. Reform of state-owned grain
enterprises will be accelerated. The cotton distribution system will be
improved. Macro-control and market oversight of grain and cotton distribution
will be strengthened and improved.
Improving the social security system. Based on a review of the experience
gained from pilot projects in Liaoning Province, we will extend the application
of approaches that have worked out to pilot projects in Heilongjiang and Jilin
provinces. We will improve the basic old-age insurance system by continuing to
combine contributions from enterprises and institutions with personal accounts.
We will speed up the development of the systems of workman's compensation
insurance and maternity insurance. We will explore ways to reform the social
security system for state organs and institutions and to set up a system of
subsistence allowances for rural residents where conditions permit.
Improving the market supervision system. We will speed up the development of
a social credit system. We will improve the mechanism for product quality
oversight and control. We will continue to rectify and standardize the order of
the market economy. We will crack down on illegal activities such as
manufacturing and marketing fake or shoddy goods, commercial fraud, smuggling
and selling smuggled goods. We will launch campaigns to clean up markets that
have a direct bearing on people's health and lives such as those for food and
medicine. We will continue to clear up problems concerning administrative
charges. We will launch special investigations of prices and charges, including
education charges and power rates, which affect rural residents. We will
strengthen oversight of production safety.
Deepening reforms of the systems of science, technology, education, culture
and health. We will reform the management system of science and technology,
improve the modern enterprise system in institutes engaged in technological
development and promote the reform of institutes engaged in public welfare
research. We will consolidate and improve the system of rural compulsory
education that is managed by governments at multiple levels, with county
governments playing the principal role, as well as the system of higher
education that is managed by the central and provincial governments, with the
latter playing the main role. We will establish and improve the system of
vocational education that is managed by governments at multiple levels, with
local governments playing the principal role and with both overall government
planning and non-government participation. We will continue the pilot reform of
the cultural system. We will deepen the reforms of the medical insurance system,
the medical and health systems, and the medicine distribution system. We will
successfully introduce a new type of system for rural cooperative medical care
and health services on a trial basis in selected regions. Fellow Deputies,
Successfully carrying out the work of economic and social development this
year will be an arduous but important task. Willingly subjecting ourselves to
the oversight and guidance of the NPC, heeding the comments and suggestions from
the CPPCC, and performing our official duties in accordance with the law
constitute an important guarantee for our success in this work. We must follow
the leadership of the Party Central Committee with Comrade Hu Jintao as General
Secretary and the guidance of Deng Xiaoping Theory and the important thought of
Three Represents and earnestly implement the guidelines set at the Sixteenth
National Congress of the Party and the Third Plenary Session of its Sixteenth
Central Committee. We must keep pace with the times, work hard with a pioneering
and innovative spirit, be realistic and pragmatic, and strive to complete all
the tasks for national economic and social development in 2004.
