I. Various adverse internal and external influences have been overcome. National economy has maintained rapid growth; the country’s economic power, overall national strength and international competitiveness have all reached a higher stage.

1. The country’s economy has kept a stable and rapid growth. With the 13 years’ sound leadership of the Central Party Committee, reform and opening up program has been advanced to a new stage, inflation has be effectively managed, the impacts brought by the Asian Financial Crisis and international economic depression have been overcome, and the tendency of deflation has been contained. The ups and downs of economic growth have been avoided. From 1990 to 2001, the annual growth rate of Gross Domestic Product averages 9.3 percent, about 7 percentage points higher than the 2.5 percent world economic growth rate of the same period. The national economy maintains a good momentum of growth this year. For the first three quarters, the GDP grew by 7.9 percent, 0.3 percent higher than the same period of last year. The GDP for this year is projected to be over 1 trillion Yuan.

2. Economic strength has been enhanced. The Gross Domestic Product of 2001 reached 9,593.3 billions Yuan, which doubled that of the year 1990, hence China leaped from the tenth place in the world and the second place among developing countries to the sixth place and first place respectively. Productions of main industrial and agricultural products, such as grain, meat, steel, coal, cement, digital program-controlled switchboard, ranked number one in the world. Foreign exchange reserve has amounted to US$246.5 billion July this year from 1989’s US$5.55 billion, ranking the second in the world. Grain reserve has reached a historic high level.

3. The quality of economic growth and efficiency kept improving. Guided by the central government’s strategic thoughts of improving economic efficiency as core of economic development and transferring economic growth from extensive mode to intensive mode, technology, production and management of enterprises have been greatly modernized. In 2001, energy consumed by every 10 thousand Yuan’s output has reduced by 73.3 percent on the basis of 1990, and the social productivity from 1990 to 2000 has experienced an average annual growth of 14.8 percent. China’s enterprises’ international competitiveness has been continuously increased. Fiscal revenue of 2001 reached 1,637.1 billion Yuan, which is a 6.1-fold increase of the 1990’s.

II. In accordance with the requirement of strategic adjustment put forward by the Fifteenth Party Committee, great efforts have been made in structural adjustment, which effectively promoted economic structure rationalization and optimization.

1. Structures of primary, secondary and tertiary industries are better coordinated. In 2001, the proportion of the added value of 3 industries in GDP has changed from 1990’s 27: 42: 31 to 15: 51: 34.

2. “Three Optimizations” and “One Increase” have turned up agricultural structure. The first optimization is in crop mix, where grain crop, economic crop and feed crop are coordinated, and major agricultural products are concentrated in advantageous areas. The second is agricultural products structure optimization. Improved varieties of crops account for 95 percent of the country’s total. The third is optimization of rural industries, where the proportions of animal husbandry and fishery in the total production of farming, forestry, animal husbandry and fishery raised respectively by 4.7 and 5.4 percentage points. Fourthly, the level of agricultural products processing and efficiency keeps increasing. Production in the form of “corporation plus farmers” and order farming is developing very fast, and a large number of leading agricultural products processing enterprises, specialized counties and villages have emerged, which have effectively raised the added-value of primary products, extended agricultural chain and increased farmers’ income. Agricultural productivity has been increased tremendously.

3. The overall quality of industry and its international competitiveness are obviously strengthened. Innovations of traditional industries are accelerated. Traditional industries such as color TV, washing machine, textile and container have strong worldwide competitiveness. High-tech industry becomes a new point of economic growth. Its industrial output from 1996 to 2001 grew annually by around 20 percent. High-tech industrial belts with their own characteristics have been formed in the Yangtze Delta, Pearl River Delta, Cross-Bohai Sea, along Shenyang-Dalian highway and around cities such as Xi’an, Chengdu, and Chongqing. Information technology, modern bio-technology are widely applied in all aspects of social life. Equipment manufacturing industry has seen new accomplishment. By implementing manufacturing projects of urban mass transportation equipment, environmental protection equipment localization, digital communication equipment localization, Chinese equipment manufacturing enterprises have enormously improved their self-alliance capability. Structure of service industry keeps being optimized. The proportions of some traditional service industries such as wholesaling, retailing, and catering have gone down, and that of communication service has increased. New services such as consulting, logistics, chain management and community service are booming. Tourism, in particular, with its rapid development, has become a new point of economic growth.

4. Bottleneck restraints for economic and social development brought by infrastructure and basic industries have by and large been removed; capability of energy production, transportation and communication have improved greatly. China’s installed power generation capacity and highway length both rank the second place, and numbers of fixed telephone and mobile phone subscribers are number one in the world. Urban water supply, transport, garbage and waste water treatment have been notably improved, which have developed the cities’ function, and improved the cities’ appearance.

III. Reform has achieved historic progress, and the shift from a planned economy to a socialist market economy has been basically realized. Preliminary socialist market economy has been established.

To establish socialist market economy is an unprecedented undertaking. The third generation collective leadership with Mr. Jiang Zemin at the core has put forward the objective of establishing a socialist market economy, vigorously promoted the reform of economic structure, actively eliminated the systematic impediments of productivity gains, and established preliminarily a socialist market economy.

1. Market plays a fundamental role in allocating resources. First of all, both industrial and agricultural productions are decided by market. All mandatory plans for agricultural production have been removed, and industrial production mandatory plans are limited to 5 kinds of products, including timber, gold, cigarette, salt and natural gas, among which mandatory plans only exist in some links in the production chain and a number of product types. Secondly, prices of commodities and service are determined by market. Currently, prices of 95.8 percent retail commodities, 92.5 percent agricultural and sideline products and 87.4 percent productive materials are determined by market. Thirdly, markets of production factor have developed to certain scale. Stock market is developing rapidly, a uniform market for inter-bank borrowing and lending has been set up, bill discounting market and Treasury bond market have come into being. Labor market is being optimized, and trade volume of both technological market and land market are continuously increasing. Fourthly, market environment is improving day by day. A great number of modern commodity markets with over 10 billion Yuan trade volume have become important channels which connect production with sales and link cities with countryside. Modern logistics centers, distribution centers and e-business have developed. At the same time, necessary market laws and regulations have been amplified, and market supervision and licensing agencies have been gradually perfected. Regional blockade and monopoly have been abolished, and an open and fair market system has been set up.

2. The economic system, which has public ownership at its dominant position and allows for diverse forms of ownership, has been basically formed. First, state-owned economy makes further development with stronger controlling power. By the end of 2001, state-owned property has reached 10,931.6 billion Yuan, which is 91.4 percent more than that of the year of 1995. The state-owned economy is the leading force in key areas that concern the national economy and people’s livelihood. The establishment of a modern enterprise system is the orientation of the reform of state-owned enterprise. Reform of state-owned enterprises has been accelerated, which improves the quality and efficiency of the state-owned economy. Secondly, non-state-owned economy is growing vigorously, and it has become an important strength of national economy. In the year of 1990, non-state-owned economy including private economy accounted for only 10 percent of the country’s industrial added value, and the present figure is over one third. Private sector of economy has become an important channel of absorbing labor force.

3. Macro regulatory system has been basically established. Economic, legal and necessary administrative tools have replaced mandatory plans. Economic regulation are realized through indirect means instead of the former direct means, by applying comprehensively the taxation, interest rate, price and investment policies.

4. Social security system has been basically formed. The primary endowment insurance system for urban employees, which features by a combination of social pooling and individual accounts, has been basically set up. The primary medical insurance system for urban employees has been initiated, and unemployment insurance has been improved.

IV. Open economy is developing rapidly. An overall opening structure is set up which lifts the opening-up drive to a new stage.

Foreign trade reached a new stage. China’s import and export volume of 2001 has reached US$509.8 billion, which is 4.4 times of the 1990’s, and China’s ranking in the world has hence been raised to 6th from 16th. China has been the largest foreign capital receiving developing country for 9 consecutive years. From 1990 to 2001, foreign capital of US$510.8 billion is used, among which US$378 billon is foreign direct investment. 96 percent of foreign direct investment since China’s reform and opening up is realized in this period of time. The foreign capital flew into China even faster in the first 3 quarters of this year, when the foreign direct investment actually utilized went up by 22.6 percent, 1.9 percentage points more than that of last year. The structure of export commodity has kept improving, and main export goods have shifted from agricultural products, raw materials, textile processing products to machinery and electronics. China has successfully entered WTO, which marks a new phase of China’s opening up. China’s “Going Out” strategy made a good start: many Chinese enterprises make full use of their comparative advantages to invest overseas, establish factories in other countries and conduct Sino-foreign economic and trade cooperation. China’s overseas investment has come to a large scale and extended to more areas. Foreign contracting and labor service cooperation are developing very fast, and China has become one of the world top 10 international project contracting countries.

V. Western Development Strategy has made significant progress and regional economy has been developed in a more coordinated way.

Western development strategy was first put forward by President Jiang Zemin in 1999, and he has given a series of important directives since then. Over the last more than two years, western development has achieved material progress. The present western China has a new and dynamic atmosphere: it has maintained social stability, economic development, national unity and people’s living standards have been improved.

1. Unprecedented amount of projects and infrastructure investment have been made to the West. The State has arranged 36 key projects with total investment of over 600 billion Yuan. 34 projects have started construction so far. The southern, middle and northern lines of the West-East Power Transmission have been basically formed, the Tibet-Qinghai railway is progressing well, and the whole route of the West -East Gas Pipeline Project has been carried out.

While implementing key projects, other forms of construction in the countryside have also been strengthened, such as water supply, undeveloped counties’ road construction, and power transmission, broadcasting and television network and biogas projects. The living conditions in western China countryside have been greatly improved.

2. Start to rebuild beautiful environment. A number of eco-construction projects are initiated, such as reforestation, natural forest protection, Beijing-Tianjin sand control, and natural grassland restoration and etc. In 2000 and 2001, the state has invested over 30 billion Yuan in western China’s eco-environmental construction projects. At present, reforestation is carried out in 24 provinces, autonomous regions, Direct Administrative Municipalities and Xinjiang Production and Construction Corps. By the end of July, arable land as big as 43.27 million mu has been transferred into forest, and another 39.26 million mu of barren land has been reforested.

3. Feature economy and advantageous industries are developing rapidly. A number of feature agricultural production bases have been set up. They are majored in cotton, sugar, cigarette leave, fruits, meat, and Chinese herbs, and a number of leading sideline products enterprises have been developed. Advantageous resources such as hydro-power, natural gas, coal, rare earth, sylvite, phosphate mine, and non-ferrous metals are being explored in a more intensive manner. The construction of energy and minerals production bases and leading enterprises is further strengthened.

VI. Great achievements have been made in socialist cultural and ideological progress, legal system improvement, science, technology, education, culture, and health. National defense and ethnic unity is continuously strengthened.

The Central Party Committee has put forward the strategy of “developing the country by relying on science and education” in 1995, according to the trend of world economic and scientific development. Scientific renovations and technological progress are encouraged, and the fundamental position of primary education is highlighted, science, technology and education are fully developed. The country’s technological strength has been enhanced, and a large number of scientific and technological achievements have been made. “Renovation Project” and “863 Program” are successfully implemented, and breakthroughs in aeronautics, astronautics, information, new material and bio-engineering have been made. There are a number of achievements in basic research which attract international attention, and remarkable success is attained in applied technology. Reform on applied science research institutions affiliated with ministries has been initially completed, and the reform now is spreading to other forms of research institutions. More and more scientific achievements are translated into practical productive forces and then introduced into market. Education gets into a new development stage, which makes education play a more effective role in guiding the economic and social development. Remarkable progress has been made in primary education by realizing the objective of the “Two Primary Tasks”: primarily making the 9-year compulsory education universal and primarily eliminate illiteracy of young and middle-aged people. High school education and diverse vocational education are further advanced; reform of higher education system has made significant progress, and higher education enrollment enlargement is warmly welcomed by the public. Socialist cultural and ideological progress is strongly enhanced by sticking to coordinated development of economy and society, and by increasing the investment in social undertakings under the conditions of a developing economy and increasing financial capacity.

VII. The growth of population has been effectively controlled. Resources conservation, eco-construction and environment treatment have produced remarkable effect. The capability of maintaining sustainable development is increasingly strengthened.

The Central Party Committee with Mr. Jiang Zemin as its core has made a significant decision to make sustainable development. This decision is made for the country’s long-term development and it is in accordance with China’s fundamental national situation, which is featured by large population and limited resources.

1. Population reproduction mode has made a historic shift. The natural growth rate of population has reduced from 1989’s 15.04 percent to 2001’s 6.95 percent. Population reproduction mode has shifted form “high birth rate, low mortality rate and high growth rate” to “low birth rate, low mortality rate and low growth rate”. Population quality keeps increasing.

2. Rational exploration and preservation of resources yield remarkable effect. Arable land is effectively protected. Saving on water in farming and urban life is making progress. Deforestation and random mining are basically under control. Harvest of forest along upstream of Yangtze River, middle and up stream of Yellow River is forbidden. Timber production of northeast China and Inner Mongolia is greatly reduced. Besides, notable achievements have been made in marine resource preservation and energy conservation.

3. Environmental protection is deepened and extended. Discharge of pollutants is effectively controlled. Pollution prevention and control in key river valleys, areas and cities have produced effect of the current stage. Urban pollution has been treated. Laws on environmental protection have seen significant development, and people’s awareness keeps increasing.

VIII. Relation between market demand and supply made a historic shift from seller’s market to buyer’s market. People’s living standard has seen a historic improvement, people have solved the problem of food and clothing, and most of them are enjoying a fairly comfortable life. The dream of having adequate food and clothing cherished by the Chinese people over the past thousands of year has finally come true.

1. Income of people in both urban and rural areas increased by a big margin. From 1990 to 2001, farmer’s income per capita increased by 62 percent. Urban resident disposable income per capita more than doubled. The people’s deposit outstanding has reached 8,000 billion Yuan, but that of 1989 was 500 billion Yuan.

2. Consumption level and living quality have been increased notably, and consumption volume keeps enlarging. In 2001 total retail volume of consumption goods increased 3.5 folds that of 1990. Great changes have taken places in consumption structure. The proportion of people’s expense on food per capita to the total consumption per capita has reduces from 1990’s 54.2 percent to 2001’s 37.5 percent in cities and from 58.8 percent to 47.7 percent in countryside. People’s living conditions of both urban and rural residents improved remarkably: living space, quality, and necessary accessories are all upgrading. People are enjoying a much comfortable life. Since reform and opening up, quality of consumption goods has kept upgrading: such as bicycles, wrist watch, sewing machine, computer, and automobile, commercial housing, and etc. Some durable consumption goods become popular in countryside.

3. Living conditions of low income groups in both rural and urban areas are improving. For the purpose of ensuring the basic living of people with living difficulty, such as laid-off workers from state-owned enterprises and other unemployed people, a number of social security systems (basic living security system for SOE laid-off worker, unemployment insurance system and urban resident basic living security system) are well set up and connected, which realizes “the insurance for those should be insured”. By the end of 2001, poverty-stricken population in countryside has reduced from to 28 million, and prior to reform and opening up the figure was 220 million. Some areas with harsh conditions for subsistence or poor eco-environment have also embarked on the road of sustainable development.

The valuable experience of China’s reform and opening-up with the Party’s leadership over the last 13 years can be summed up as the following points:

1. Making economic development our central task and to seek solutions of development for problems raised on the way of marching forward. In this period, we are faced with both opportunities and challenges. The Central Party Committee has always emphasizes on grasping all possible opportunities, exploring new ways and avoiding the beaten track, and always making development as the priority in policy-making and nation building. The Central Party Committee also stresses that accelerating development is the crux of solving China’s problems, and we should speed up development by all possible means.

2. Adhere to the reform of building market-oriented economy and handle properly the relations between reform, development and stability. The Central Party Committee has always underlined that development must rely on reform. Economic system reform must be promoted in an all-round way according to the requirements of liberating and developing the productive forces, and the objective of the reform is to establish a socialist market economy. Economic system and operating system to be established must be favorable to the development of the productive forces. At the same time, the relations between the depth of reform, the speed of growth and the affordability of society should be addressed. The reform can only be deepened and the growth be accelerated in a stable society, which will promoted by reform and development.

3. Adhere to opening further to the outside world and make good use of the resources and markets both at home and abroad. The Central Patty Committee has made it a basic national policy to open further to the outside world. It has also stressed that we should actively take part in the international competition and faced the challenges. We have to push our opening up drive to a higher level under the current situation where economic globalization and world economy restructuring have been accelerated. We should walk on both legs of “going global” and “introducing in”, and make full use of the resources and markets both at home and abroad. Strategic solutions to resource and employment problems must be found out so as to expand economic development and maintain a rapid, sustained and sound national economic development.

4. To make sober assessment of the situation, to be responsive to the changes of the time and to make decisive adjustments of the macro-policies in line with the changed situations, and always take hold of making macro regulation in our own hands. Faced with drastic changes of situations both at home and abroad, the Central Party Committee adopted right measures in the opportune time. When overheated economy prevailed, the moderately tightening fiscal policy brought about economic “soft landing”, which avoided violent fluctuation. When effective demand was slack, actions of stimulating domestic demand were adopted and the moderately tightening fiscal policies were shifted to an expansionary fiscal policies and a steady monetary policy, which maintained sustained, rapid and sound economic development.

5. We must always work for material progress and at the same time for cultural and ideological progress, and improve the socialist legal system. Over the last 13 years, the Central Party Committee has always emphasized that socialist modernization is an undertaking with material progress and cultural and ideological progress supplementing each other. Only with the two types of tasks both successfully completed, can we call it the socialism with Chinese characteristics. While vigorously developing socialist economy, social cultural and ideological progress must be put in an important position, providing the modernization program with a powerful ideological driving force and strong intellectual support. Besides, the Central Party Committee also stressed improving democracy and legal system, managing state affairs according to law, and establishing a socialist country ruled by law. Therefore, all undertakings of the whole country will be continuously pushed forward.

(China.org.cn November 11, 2002)