II. The Objectives and Guiding Principles of the Tenth Five-Year Plan

Looking ahead at the situation at home and abroad at the beginning of the 21st century, it can be said that the next five to ten years will be an extremely important period for China’s economic and social development. The worldwide new scientific and technological revolution is progressing rapidly with great momentum. The economic globalization trend is gaining strength. Many countries are actively restructuring their industries, and our neighboring countries are accelerating their development. All this serves as a severe challenge and a historic opportunity for us to strive to catch up and achieve development by leaps and bounds. At home, we are at a crucial juncture in economic restructuring, and reform is in a very difficult period. Our entry into the World Trade Organization will bring us a number of new problems. We are facing many arduous tasks. Many deep-seated problems need to be solved. All this requires us to seize the opportunity and accelerate development. At the same time, there are many favorable conditions for our national economy to achieve rather rapid development over a fairly long period.

In light of the situation and tasks facing us during the Tenth Five-Year Plan period, the Outline sets forth the main targets for economic and social development in the next five years as follows: maintain a fairly rapid growth rate in the national economy, achieve noticeable success in the strategic restructuring of the economy, and make marked improvement in the quality and benefits of economic growth to lay a solid foundation for doubling the 2000 GDP by 2010; make significant progress in establishing a modern corporate structure in state-owned enterprises, increase the soundness of the social security system, improve the socialist market economy, and open wider to the outside world and strengthen cooperation with other countries; expand avenues of employment, increase the income of urban and rural residents steadily, improve people’s material and cultural standards of living, and improve ecological conservation and environmental protection; accelerate the development of science, technology and education, further improve the quality of the Chinese people, and achieve marked progress in improving spiritual civilization, democracy and the legal system.

The Outline of the Tenth Five-Year Plan embodies the following major guiding principles.

Making Development the Central Theme. We stress a balance between high growth rate and good economic returns and attaining fairly rapid growth by improving economic returns. Sound economic growth must be based on strong market demand and good economic returns. This is a fundamental principle. Based on an overall analysis of conditions in all sectors of the economy, we have set the target for the average annual economic growth rate in the Tenth Five-Year Plan period at around 7%. Though slightly lower than the actual growth rate of the Ninth Five-Year Plan period, it is still fairly high. Arduous efforts have to be made to attain this target through better economic performance. However, as there exist some uncertainties both at home and abroad, we have to leave some leeway when defining our target. This will help people focus on restructuring and improving economic returns, and also help prevent overheating of the economy and poor quality or redundant development.

Concentrating on economic restructuring. We have already reached the point where we cannot further develop the economy without making structural adjustments. Under the old economic structure and its crude manner of growth, products will not be marketable, and it will be impossible to sustain resources and preserve the environment. We must adjust the economic structure in developing the economy and maintain a relatively rapid growth in structural adjustments. In the next five years, efforts should be intensified to adjust the patterns of economic development between different industries, between different regions, and between urban and rural areas, with emphasis on the industrial structure. We should stabilize and strengthen agriculture as the foundation of the economy, accelerate industrial reform, reorganization, upgrading and optimization, vigorously develop the service industry, accelerate efforts to base the national economy and society on information, and continue to reinforce the infrastructure.

Making reform and opening up and technological progress the driving force. The success of both economic development and structural adjustment depends on institutional, scientific and technological innovation. In the next five years, we must unswervingly pursue reform, open China wider to the outside world, and break down the institutional obstacles to the development of productive forces. This will provide a strong impetus for economic and social development. In addition, we have to give priority to the development of science, technology and education, further implement the strategy of developing China through science and education, invigorate science and technology, train more skilled personnel, and better integrate science, technology and education with the economy.

Making improvement of the people’s living standards the basic starting point. Raising the people’s living standards in both urban and rural areas is the basic goal of our economic development and a crucial factor for expanding domestic demand and stimulating sustained economic growth. We must give priority to raising the people’s living standards. To accomplish this we must create more jobs, increase personal income, distribute income more equitably, improve the social security system, and ensure a more comfortable life for the people.

Coordinating economic development with social development. We should make great efforts to improve socialist spiritual civilization, democracy and the legal system, balance reform, development and stability, accelerate development of various social undertakings, and ensure social stability. We need to pay close attention to and solve issues of population, resources and the ecological environment, take further steps to implement the strategy of sustainable development, and stimulate coordinated economic and social development.

The Outline for the Tenth Five-Year Plan emphasizes its strategic, macro-economic and policy characteristics. It contains fewer specific targets and sets more tentative ones adjustable to structural changes. The Outline focuses on key development areas and the settlement of major problems, orients our efforts, and presents corresponding policies and measures. It stresses that the role of market mechanisms should be fully exercised in the implementation of the Plan, and that economic levers, economic policy and legislation be further employed in the government’s macro-control. In the process of formulating the Plan, we need to encourage more participation by all elements of society, thus making it a process of giving full scope to democracy, absorbing all useful ideas, and reaching agreement among all sides.