Premier Zhu Rongji's Explanation of 10th Five-Year Plan Drafting

Better social security system

The Proposal of the Communist Party of China (CPC) Central Committee for Formulating the 10th Five-Year Plan (2001-05) for National Economic and Social Development urges localities to actively expand employment, improve the social security system and the livelihood of the people.

The proposal was examined and approved by the Fifth Plenary Session of the 15th CPC Central Committee last week.

The proposal said that expanding employment is required to further stimulate economic development and safeguard social stability. It is an important part of macro-economic control.

It is necessary to speed up economic growth and further develop labour-intensive industries and collectively and privately owned businesses, according to the proposal.

As an important pillar of the socialist market economy, an overall social security system has a significant bearing on the reform, development and stability of the nation.

The central authorities encouraged an early establishment of an independent social security system, which will no longer belong to businesses themselves, but will attract funds through various channels.

The proposal also stressed the need for modern and strict management of the social security system, and the need to pursue a proper pension system for urban employees.

Meanwhile, medicare and unemployment insurance for urban workers were underlined by the proposal.

China plans to gradually adopt a system of unemployment benefits to help laid-off workers in State-owned enterprises, according to the proposal.

The final target of economic growth is to improve the material and cultural conditions of the people, which will also provide momentum for the sustainable development of the economy, the proposal said.

The central authorities want to see more improvement in living standards, with increased housing space, a cleaner environment, an effective network of public facilities, increased ability to buy personal computers and cars, a high-level of infrastructure, enjoyable entertainment activities, efficient medicare and good social order.

In addition, the proposal stressed the importance of raising the income of people nationwide, especially those with low incomes. It is necessary to pursue the principle of making efficiency a priority while also taking fairness in distribution into account, according to the proposal.

The proposal said it is essential for people with capital or technology to have a share in earnings.

It called for pilot reform measures to be used in the form of annual salary or options for outstanding managers and technicians.

China will further adjust the distribution system by improving the tax policy, initiating an inheritance tax and preventing the income gap from further expanding.

Meanwhile, the proposal emphasized socialist ethical and cultural progress throughout the country. It urged a modern socialist culture with Chinese characteristics when the nation is confronted with Western ideologies and cultures.
The proposal also urged the raising of people's overall quality of life, both materially and culturally, and called for increased national cohesion.

Infrastructure construction stressed

The CPC proposes that, in the coming five to 10 years, the construction of water conservation, transportation, energy and other infrastructure projects will be further reinforced.

The proposal put forward that the reinforcement of infrastructure construction is a very important task during the coming five to 10 years. Efforts should be made to rationalize structure, readjust layout, improve project quality, expand investment channels and raise investment efficiency to bring infrastructure construction to a new level.

It said water conservation construction needs overall planning and comprehensive management. Efforts should be focused on minimizing flood disasters and solving the problems of water shortage and water pollution.

An overall plan for national water conservation construction and plans for harnessing major rivers should be formulated in a scientific way and be implemented energetically, it said.

The sustainable utilization of water resources is a strategic issue in China's economic and social development, for which the key is to improve water using efficiency and put conserving water high on the agenda.

The proposal pointed out that transportation construction needs unified and rational planning, and the construction of roads, railways, ports, airports and piping systems should be reinforced to form an unimpeded, safe and convenient modern transportation system.

The focus of transportation construction will be on improving road and railway networks; reinforcing urban road and rail transportation construction; developing water transportation; opening feeder air routes; and reinforcing the building of oil and gas pipelines.

According to the proposal, full use should be made of resources in energy construction.

Also, the energy structure should be rationalized to improve efficiency and to protect the environment.

Major measures include the development of clean, high-quality coal; accelerating the prospecting, development and use of oil and gas; actively using overseas oil and gas resources through co-operative development and other channels; promoting the construction of a nationally unified power transmission network; developing new sources of energy and renewable energies; and spreading energy-saving technologies.

Agricultural and industrial goals outlined

The Proposal of the CPC Central Committee for formulating the 10th Five-Year Plan (2001-05) outlined the nation's goals of consolidating and strengthening the primary status of agriculture and accelerating re-organization and restructuring of industry for the next five years.

According to the proposal, strengthening the position of agriculture is an important part of economic restructuring and the basis for maintaining economic growth and social stability.

The proposal said that great importance should be attached to preserving and expanding the capacity of grain production, building stable bases of grain production, developing a grain security system that is compatible with the specific conditions of China and the requirements of a socialist market economy and guaranteeing the essential balance between demand and supply of grain.

The proposal called for the country to be fully aware of the importance of difficulties in the development of agriculture, always put the development of agriculture as the top priority in economic growth and guarantee sustainable, stable development of agriculture on the basis of improving overall quality and efficiency.

According to the proposal, every possible means should be adopted to increase the income of farmers because this concerns both the development of agriculture and rural areas and the development of the economy as a whole.

It called for greater efforts to be made in restructuring the agricultural sector, actively expanding the sources for the increase of farmers' income, stepping up support and protection of the farming sector, effectively slashing the burdens of farmers and securing the sustainable increase of the income of farmers.

The proposal pointed out that the restructuring of agriculture and the rural economy should be market-oriented, based on scientific and technological advances and persistent in exploring a new broadness and depth of production growth.

It said that great efforts should be made to push forward the development of a universal service system in rural areas, with the supply of technological and information services as the focal point.

Support should be given to the innovation and spread of farming technologies so as to make advanced, practical technologies accessible to more farmers, according to the proposal.

The establishment of the systems of market information about farm produce, food quarantine and quality standards should be accelerated to guide the farmers to turn out quality farm produces in line with market demand.

The proposal said that deepening rural reform is the fundamental measure to preserve and promote the motivation of farmers. It said that the development of a legal framework guaranteeing the land system in rural areas should be accelerated so as to maintain the dual management system that encompasses unified and independent management and is based on household contract.

It said that on the basis of pilot reforms in certain areas, the reform of replacing arbitrary fees imposed by administrative authorities with taxes should be accelerated in the rural areas. At the same time, the reform of government structure at township level should be carried out in an active and proper way.

With industrialization as a major way for modernization of agriculture, the country should encourage and support the enterprises that process and sell farm produce to give farmers access to the market so as to develop a system of profit-sharing and risk diversification.

According to the proposal, the country should increase input in agriculture and rural areas through various channels, encourage rural residents to participate in capital construction of farmland, accelerate construction of roads, power grids, water pipelines, telecommunications facilities and other infrastructures in rural areas and improve the conditions of production, living and market in rural areas.

The proposal noted that re-organization and renovation of industrial enterprises and optimization of the industrial structure are imperative tasks of economic restructuring and extremely important to the sustainable growth of the economy. Therefore, the overall quality and competitiveness of the industrial sector should be improved.

It said that the industrial sector should effectively change the style of growth, enhance the capabilities of technological innovation, adopt new and high technologies and accelerate upgrading of conventional industries.

The proposal urged the closure of factories and mines that turn out products of poor quality, waste resources, cause serious pollution, or lack safety, and the dismantling of outdated equipment and phasing out outdated technology.

It said that enterprises should go bankrupt if they suffer losses for a long time, have debts larger than assets and have no means to reverse the losses.

According to the proposal, acceleration of re-organization of industrial enterprises should be in line with the principles of specialized division and economies of scale. The country should form a group of large companies and enterprise groups that have their own intellectual property rights, strong core businesses and powerful flagship entities.

It said that the country should actively facilitate the growth of small and medium-sized companies, especially scientific and technological companies.

The re-organization and restructuring of the industrial sector should be conducted in accordance with the rule of market. The State should properly guide the orientation of investment so as to avoid construction of redundant projects and duplication, according to the proposal.

Because China has abundant human resources, the country should pay attention to the development of labour-intensive industries, according to the proposal.

It said that the country should insist on developing its own technological innovations as well as introducing technologies from other countries and pay attention to the balance between the feasibility and advancement of technologies.

Inprove socialist market economic system, speed up western development

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 Communist Party of China (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 State-owned enterprises (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 vigour 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 be used comprehensively. 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 yuan, 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 co-operation, and step up its economic and technological co-operation 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 co-ordinated 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.

Strengthening democratic legal system

The CPC decided to strengthen the country's democratic legal system during the next five years.

According to the document, developing a democratic political system and building a socialist country with the rule of law will be an important goal of China's socialist modernization drive.

The people's democratic dictatorship under the leadership of the industrial workers' class and based on the alliance of workers and the farmers should be adhered to and improved on, the document said.

The people's congress system, the multi-party co-operation and political consultation system under the CPC leadership and the regional autonomy system should all be adhered to and improved on, the document said.

The political restructuring should further be pushed forward, as well as the building-up of a democratic legal system, it said.

In terms of political restructuring, the document said that legislation and supervision work of the people's congresses should be further enhanced, and relations between deputies and the congresses and their constituents should become closer to ensure a scientific and democratic policy-making.

Democratic elections, democratic policy-making, democratic management and democratic supervision must be implemented across the country to guarantee citizens with far-ranging rights and freedom and to respect and protect human rights, it pledged.

Grassroots governments and autonomy organizations of the masses should be optimized for public participation, and all the regulatory, management affairs of grassroots governments, factories and villages must be open to public supervision.
The building and improvement on the legal system facilitating the socialist market economic operations is the key to China's legal work, it said, noting that property-ownership relations, credit transaction and contract matters under the conditions of a market economy must be covered by law and administered in accordance with law, so as to ensure a sound market order and protect fair competition.

Government work should operate in line with statutory laws while improving the public servants system, with government functionaries held responsible for their conducts and their performances regularly checked. Judiciaries shall be reformed to guarantee their independent rights to prosecution and trials, as well as to ensure justice be served, said the document.

Activities to split the motherland in the name of ethnic issues and other illegal doings in the name of religion must be dealt with in accordance with law and vicious cults must be banned, it said.

Social security measures must be implemented at the grassroots level, criminal activities endangering national security and public orders, as well as social vices like prostitution, gambling and drugs shall be severely cracked down upon and wiped out, it said.

The document also elaborated on China's future defence policies, saying that national defence must be further strengthened along with economic progress.
New high-technology weapons shall be developed to enhance the Chinese army's defence capability for new situations that may arise, it said.

On the role of the CPC in China's socialist modernization drive, the document said that its administerial capability must be improved and updated, especially the capability to regulate the national economy and social development.

It said that the Party must follow the three principles raised by General Secretary Jiang Zemin that the Party must always earnestly represent the development requirements of China's advanced social productive forces, the progressive course of China's advanced culture, and the fundamental interests of the overwhelming majority of the Chinese people.

Promote science and technology

The CPC called for strenuous efforts to promote science and technological progress and innovation, so as to enhance the overall national strength and carry out the strategy for sustainable development.

The proposal set such goals as strengthening technological innovation, developing high and new technology, and upgrading the technological level of industries.

High-tech research should be conducted energetically and efforts should be concentrated on making breakthroughs in the key fields of information, biology, new materials, advanced manufacturing, aerospace and aviation. The ability to make independent technological innovations must be improved in the high-tech sectors which are linked to national economic lifelines and State security.

The CPC Central Committee wanted to deepen the structural reform of the science and technological sector to build up a new system compatible with the demands of a market economy.

International exchanges and co-operation in science and technology should be increased, it said. Foreign companies should be encouraged to open research and development institutions in China, while local science and technology firms should be encouraged to conduct research and development overseas to promote the sharing of resources and information.

The proposal highlights the importance of professionals, saying that in the final analysis, international competition, now and in the future, is the competition of professionals. The fostering, attracting and utilizing of professionals should be made a strategic task, it stressed.

Meanwhile, education is the basis for cultivating professionals, it said. China should take the road of reform and innovation in developing its education sector and gear its education to the needs of modernization, the world and the future, it noted.

It urged the advancement of quality education advocating the spirit of innovation and practical abilities.

The CPC Central Committee urged continuation of the policy of encouraging people to study overseas and return to the motherland afterwards.

It highlighted the importance of fostering talented people who can become leaders in various fields. The personnel system should be reformed to create conditions for the growth, selection and appointment of young and excellent leaders, it said.

It proposed to continue the strict control of the population; rationally utilize, save and protect resources; and strengthen environmental protection by launching major afforestation projects throughout the country and dealing with environmental problems in urban areas.

Proposal attaches great importance to information technology

The proposal attached great importance to speeding up the development of the information and service industries.

The proposal noted that the promotion of the application of information technology is the trend in current world economic and social development and the key link to upgrading China's industrial structure and realizing industrialization and modernization.

The proposal listed the construction of information infrastructure as a preferential task for national economic and social development and urged the promotion of structural innovation so as to ensure that the information industry strides forward.

Information technology should be used extensively in all circles of society and the use of computers and the Internet should be widespread, said the proposal.

Digital technology and the Internet should be used in various sectors including governmental administration and management, public service, enterprise management and daily operations.

Various kinds of information products and Internet services should be provided to consumers and conditions should be created to promote the use of information technology in sectors such as banking, finance, taxation and trade departments. The development of e-commerce should be accelerated.

The information industry should be integrated with related cultural sectors. Schools should actively promote education in computers and Internet technology.

The construction of infrastructure for the information industry should be strengthened. High-speed, wide-band transmission networks should be developed and improved, and the construction of networks connecting consumers should be sped up. The use of the Internet should be dispersed and the integration of the networks of telecommunications, TVs and computers should be promoted.

According to the proposal, the development of the software industry and integrated circuit industry should be accelerated, the production of new components, computer and Internet products, digital video and audio products should be supported, and equipment manufactured with information technology and system integration ability should be promoted. The information service industry, especially the Internet service industry, should be actively developed, the proposal said.

Meanwhile, the proposal said that in the process of the strategic readjustment of the economic structure, it is necessary to accelerate the development of the service industry and improve service quality in the sector.

It is necessary to develop modern services and restructure traditional services, the proposal said. In the future, the proportion of the service industry in the gross domestic product should be increased markedly while more people can be employed in the sector.

The quality and technical standards of the modern service industry should be improved, especially in sectors such as information, finance, accounting, consulting and legal services.

The traditional service industry should be restructured with modern management styles and technology. Emphasis should be placed on the development of commerce and trade, transportation and civil services.

The development of chain stores, distribution centers, a diversified transportation system and online selling should be promoted.

The development of the service industry should meet consumers' demands. The real estate industry should be developed with an emphasis on the construction of low-price housing projects. Standardized property management should be popularized.

The tourism industry should be actively developed, and tourism resources should be developed and protected. The community service industry should be accelerated to provide more facilities for residents. The industries of entertainment, education and training, fitness and hygiene should be developed to cater to the needs of consumers.

The service industry in the countryside should also be developed and its market environment improved, said the proposal.

It called for accelerated improvement in the market, saying that the monopoly in the service industry should be broken down, market access should be widened and market competition should be encouraged.

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