In order to expand domestic demand, China first of all should raise the incomes of urban and rural residents, especially those with low incomes, to increase their purchasing power.
This was remarked by Premier Zhu Rongji Tuesday, when he was delivering the Report on the Work of the Government at the opening of the Fifth Session of the Ninth National People's Congress.
First, the government needs to take more effective measures and adopt all possible means to increase farmers' incomes and lighten their burden.
Second, the urban social security system needs to be further improved. The most pressing task is to ensure that subsistence allowances for laid-off workers from state-owned enterprises and basic pensions for retirees are paid on time and in full. "We will not allow new arrears to occur anywhere," he stressed.
The government will improve the unemployment insurance system, and at the same time, strengthen the system of subsistence allowances for urban residents, so that all eligible poor urban residents will have their essential needs met.
Now that the central government has greatly increased its budgetary funding for subsistence allowances, local governments, on their part, must do the same, according to the premier.
For industries and enterprises in dire straits, the government will take effective measures to help their workers out of their plight, Zhu said. He pledged to continue reforming the basic medical insurance system for employees in urban areas, the medical and public health systems and the pharmaceuticals production and distribution system.
Pilot projects for improving the social security system being carried out throughout Liaoning Province and in some cities of other provinces and autonomous regions will be pushed forward.
The government will work hard to raise, manage and make good use of funds for national social security programs.
Third, the government will again appropriately raise the basic wages and salaries of employees in government departments and institutions and the pensions of their retirees. Enterprises under all forms of ownership also should appropriately increase the wages and salaries of their employees on the basis of improved economic performance.
The premier said that local governments in those places that owe salaries to cadres, procurators, judicial and public security officers and teachers must take effective measures to solve this problem as soon as possible.
He said that local financial departments should first of all ensure that wages and salaries are paid. Wages and salaries that are in arrears must be paid as soon as possible, he stressed.
"We need to ensure that wages and salaries are paid on time and in full even if for that new construction projects have to be canceled and things that are not urgent have to be given up or reduced in scale," the premier said.
On the basis of strict determination of the number of personnel, the central financial authorities will subsidize these outlays through transfer payments to those provinces, autonomous regions and municipalities directly under the central government that cannot meet their obligations, according to the premier.
Provincial financial departments will also subsidize those cities and counties in financial straits through transfer payments.
Fourth, the government will exert every effort to expand employment and reemployment. "This is an important means of increasing people's incomes," he stressed.
He pledged to afford job opportunities on a more extensive scale and create more jobs, and intensify the efforts to develop labor-intensive industries, service trades, and small and medium- sized enterprises that can provide a good many jobs. Efforts will be made to create more jobs in community services, he noted.
The government will adopt elastic, flexible and diversified forms of employment, and develop the labor market, improve the employment service system, and conscientiously implement policies of preferential treatment that encourage self-employment and expand employment.
Special employment assistance should be given to members of disadvantaged groups, he said.
Fifth, the government will expand the scope of consumption, and improve the climate for consumption; eliminate all barriers to consumption by deepening reform and adjusting policies; and encourage people to spend more on housing, tourism, automobiles, telecommunications, cultural activities, sports and other services and develop new focuses of consumer spending, according to the premier.
(Xinhua News Agency March 5, 2002)