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WesternDevelopment

China will continue its reform initiatives in a bid to improve its socialist market economic system during the next five years, according to the Proposal of the CPC Central Committee for Formulating the 10th Five-year Plan for National Economic and Social development.

The proposal stressed the importance of reform, exploration and innovation to break systematic obstacles to the development of productivity.

The proposal pinpointed the reform of SOEs as the key link in China's economic restructuring, saying that large and medium-sized SOEs must deepen their reforms to establish a modern corporate system characterized by clear ownership, explicit rights and responsibility, disconnection between the government and enterprises and scientific management.

Large and medium-sized enterprises should be encouraged to embrace the shareholding system through public listings, entering joint ventures with foreign partners and cross shareholding, the proposal said.

The government will further relax its control over small and medium-sized enterprises to inject more vigor into them, it added.

The CPC Central Committee proposal recognized non-public ownership as an important part of the socialist market economy and pledged to create a fair competitive environment among enterprises of different ownerships.

"We shall support, encourage and guide the healthy development of private enterprises, especially small and medium-sized technology-intensive companies," the proposal said.

It also stressed the importance of establishing a unified and orderly nationwide market that allows fair competition and does not have monopolies.

The proposal pledged to further relax government control over prices to allow the market system to work.

"The means of planning, finance and banking must beusedcomprehensively. The leverage functions of price, tax, interest rates and exchange rates must be allowed to play their part, so as to guide and promote economic restructuring and safeguard the stable growth of the economy," the proposal said.

In the near future, the proposal said an active fiscal policy must be continued to spur corporate and social investment and stimulate consumption.

It noted that financial reforms must be deepened in order to perfect the organizational, market, supervision and macro-control systems in the financial sector.

"A stable and healthy monetary policy must be employed for the instant adjustment of money supply, safeguarding the stability of the exchange rate of the renminbi , and supporting the adjustment of economic structure and economic growth," stated the proposal.

It pointed out that China's opening up to the outside will enter a new stage during the 10th Five-Year Plan period.

"With China's accession to the WTO, our country will enjoy more opportunities to attract foreign capital, technology and management expertise, promote the optimization and upgrading of the industrial structure and expand our exports, while at the same time, it will face severe challenges brought on by stronger international competition," the proposal said.

To address the challenges, the proposal said China must improve its investment environment, attract more foreign capital and improve the quality of foreign investment.

The use of foreign capital must be combined with the adjustment of industrial structure, the reform of SOEs and the development of the western regions, it said.

China will also continue with the step-by-step opening of its banking, insurance, telecommunications, foreign trade, internal trade, tourism and other service sectors to foreign competition, and gradually apply local treatment to foreign investment projects, according to the proposal.

The country will take a positive stance towards encouraging foreign businesses, especially multinationals, to invest in its high-tech sectors and participate in the restructuring of SOEs as well as in infrastructure construction, said the proposal.

China will positively explore the possibility of using medium and long-term foreign investment in the form of acquisitions, mergers, investment funds and securities investment, the CPC proposal said.
It noted that China will also step up its supervision over financing activities in foreign currencies to prevent foreign debt risks.

The country will accelerate the clean-up, revision and perfection of its economic laws and regulations to increase its policy transparency, according to the proposal.

The proposal stressed that more attention must be given to product quality, the diversification of markets and the use of high technology in expanding China's goods and services exports.

It adds that China should also positively participate in multilateral trade systems, strengthen regional economic cooperation, and step up its economic and technological cooperation and exchanges with other developing countries.

The reform of the foreign trade system must be deepened to establish a system that complies with international practices and the specific situation in China, the proposal said.

China will further step up the development of the resource-rich western areas to promote a coordinated development among different regions of the country, according to the proposal.

The implementation of the western development strategy is of great significance to the country's economic development, national solidarity and social stability. It is also a key step in achieving the country's strategic goal of building a well-to-do society in all areas of life in the new century.

The proposal pointed out that western development is an "arduous" historic task, which should be fulfilled with both a sense of urgency and long-term effort.

"Within five to 10 years, China expects to achieve a breakthrough in the infrastructure construction and environmental development in the western region to create a good start for western development," the proposal said.

To achieve these goals, the proposal said, more effort should be made to build key projects in communications, water conservation, telecommunications, power and urban facilities as well as the project to pipe natural gas and transmit electricity from the west to the eastern areas.

Concrete measures should be taken step by step to improve the environment and production conditions in the west, the proposal noted.
The Chinese Government will increase funds in this regard to support the implementation of the western development strategy, and more funds will be channeled to the region populated by ethnic minorities, the proposal stresses.

The proposal urged that the industrial and urbanization process be promoted and new economic growth opportunities pursued to fully tap the western areas' resources.

As a complementary region to the west, the eastern areas are urged to play a more significant role in driving the country's economic development. Some areas in the east with better development conditions will be encouraged to achieve modernization goals ahead of others, according to the proposal.



(China Daily 10/19/2000)
 
   
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