IV. Adapting to the New Situation Following China’s Entry into the WTO and Opening Wider to the Outside World
China’s entry into the WTO indicates that our opening up has entered a new stage. We need to actively participate in international economic cooperation and competition on a broader scale and in greater depth and complete our tasks for the first year of China’s membership in the WTO.
In recent years and especially over the past few months, we have done a great deal of work to meet requirements for China’s entry into the WTO. Review of relevant state laws and statutes has been completed by and large, and a number of laws and regulations have been repealed, revised and formulated. Beginning January 1, 2002, China’s general tariff level has dropped from 15.3% to 12%, and the reduction involved more than 5,300 taxable items. This year we need to concentrate on increasing our international competitiveness and fulfilling the following tasks on the basis of what has been achieved. First, following the principles of the uniformity of law, nondiscrimination, and openness and transparency, we need to quickly improve the system of foreign-related economic laws and statutes so that they are suitable to domestic conditions and the WTO rules and able to guarantee fair and efficient law enforcement. Second, according to China’s commitments in its entry into the WTO, we need to gradually expand the spheres of activity open to foreign businesses. In addition, we need to promptly formulate and revise market access standards for quality, sanitation, epidemic prevention, environmental protection and safety. Third, we need to study, master and fully exercise all the rights that China enjoys as a member of the WTO, and promote and participate in regional economic cooperation. Fourth, we need to study and publicize information about the WTO and its rules, and we need to provide training to public servants, especially leading cadres at and above county and division level and to managerial staff in large and medium-sized enterprises by stages and in groups. We need to bring forth, through training, a contingent of people who are well acquainted with the WTO rules and international economic cooperation and trade.
Foreign trade work has to be done conscientiously. We need to continue implementing the strategy of market diversification to increase this year’s exports. We will retain existing markets for China’s exports and open new ones. We will adjust and optimize the mix of export commodities, improve their quality and raise their added value. The policy measures for encouraging exports must be fully carried out. Key enterprises that generate large sums of foreign exchange through export and enjoy a good reputation should be ensured of tax refunds in full and on time. We will promptly reform and improve the system of export tax refunds. Tax exemption, reduction and refunding measures will be applied to those commodities which producers manufacture and export on their own or entrust foreign trade businesses to serve as agents for exporting. We will expand export credit insurance and provide more support for export. Reform of the customs service must be deepened to further facilitate customs clearance and to improve customs supervision. We also need to further reform and reorganize state-owned foreign trade businesses and diversify foreign trade entities and export channels. In continuing implementing the “go global” strategy, we need to encourage and help eligible enterprises under various forms of ownership to set up factories or undertake contracted projects outside China, particularly in neighboring countries, in order to increase the export of technology, equipment, materials and labor. We will import advanced technologies, key equipment, and raw and semi-finished materials that are in short supply in China. We will gradually diversify China’s import markets for strategic supplies.
We will continue to utilize foreign funds and optimize the mix of foreign investment. We will focus on bringing in advanced technology, modern managerial expertise and qualified specialists. We need to encourage, through guidance, foreign businesses to invest in modern agriculture, industries using high and new technologies, construction of infrastructure facilities, and development of the western region and to participate in the restructuring and reorganization of state-owned enterprises. We should encourage foreign businesses, especially transnational corporations, to set up research and development centers, production bases and regional headquarters in China. To promote the development of China’s service industries, we need to attract large reputable foreign enterprises and intermediary agencies engaged in commerce and trade, tourism, accounting and auditing. We also need to create conditions for attracting investment by small and medium-sized overseas enterprises. We need to continue improving the investment environment and the legal system. We need to do everything in accordance with the law, render better services to investors, improve our efficiency, and standardize our work related to attracting foreign businesses and investment. We will gradually give foreign-funded enterprises the same treatment as their Chinese counterparts. We support Shanghai in its bid to host the World’s Fair for 2010.
V. Thoroughly Rectifying and Regulating the Order of the Market Economy
Thoroughly rectifying and regulating the order of the market economy is urgently needed to expand domestic demand and ensure sound economic growth. This is an inevitable choice we should make in consequence of China’s entry into the WTO and the new steps taken to open China to the outside world. This is also an important measure to improve the socialist market economic system, upon which success or failure of China’s modernization hinges. On the basis of the initial results achieved last year, we need to press ahead with this task with a still greater resolve and even more effective measures.
Working in an all-round way while emphasizing key points. We need to pay great attention to the current outstanding problems and concentrate on the following tasks: First, we need to severely crack down on all illegal and criminal activities related to the production and sale of counterfeit and shoddy goods, especially food, medicines and medical apparatus that seriously endanger people’s lives and health. Second, we need to continue rectifying and standardizing the markets for construction and cultural products and the order of finance and taxation. Unremitting efforts must be made to combat such crimes as tax fraud and evasion, evading foreign exchange control, obtaining foreign currency through deception, pyramid selling and smuggling. Such violations of the law as forging invoices and vouchers and falsifying accounts must be dealt with severely. We need to regulate and standardize accounting firms and other intermediary service organizations. We will make great efforts to rectify the order of the tourism market. Third, the financial order needs to be thoroughly rectified. We need to earnestly investigate and deal with business activities that violate laws and regulations concerning banks, securities and insurance companies, and other financial institutions. We need to resolutely ban illegal financial institutions and illegal financial activities. Financial swindling, illegal fund-raising, manipulation of the securities market, insider trading, and malicious evasion and cancellation of debts should be investigated and dealt with according to law. Fourth, local protectionism and monopoly of industries must be eliminated. We need to deal with and stop, according to law, the acts of abusing privileges to set up trade barriers, obstruct commodity circulation and impede fair competition. We will continue to tighten management of the market for finished oil and market fairs. Prices and fees need to be rectified. Fifth, the management of industrial and traffic safety needs to be strengthened. The safety responsibility system needs to be improved. To prevent major worksite accidents, we must take effective measures to correct supervision and performance of work that violate safety rules and regulations. We need to tighten supervision and management over the entire process of handling dangerous chemicals and inflammable and explosive materials from their production, marketing, transport and warehousing to their use. Factories and mines that produce inferior products, contaminate the environment, damage resources or do not meet production safety standards must without exception be shut down in accordance with the law. In rectifying and standardizing the order of the market economy, we need to concentrate on investigating major cases and severely punish those guilty of crimes or corruption.
Seeking both temporary and permanent solutions while focusing on the permanent solution. The qualifications of all kinds of market entities need to be carefully examined to properly control market access. Government departments at all levels must sever their ties with enterprises and intermediary organs in accordance with relevant regulations. They must further take effective measures to implement the regulations on separately managing the receipts and expenditures of administrative charges and incomes from imposition of fines and confiscation. Comprehensive and departmental budgets need to be prepared to ensure that all departments have sufficient funds to perform their duties according to law and strictly enforce the law. We need to strengthen rule of law, improve the regulations linking administrative penalties to criminal investigation and prosecution, resolutely prevent and correct the acts of failing to punish lawbreakers and replacing punishment with imposing a fine, and deal with violations of the law more severely. We need to solve problems of law enforcement involving authorities at different levels or various government departments at the same level and improve the system of responsibility for law enforcement and the system of accountability. We need to effectively improve social credibility and gradually develop moral standards throughout society based on honesty and moral integrity. We need to accelerate the establishment of credibility records for enterprises, intermediary agencies and individuals, making those with a record of bad conduct pay a price for what they have done, and have their credibility ruined and even punishing them according to law. We will extensively apply modern means of supervision, utilize online information, establish interconnected networks and share information. We need to accelerate the reform of the system of distributing goods and develop modern methods of distribution to make it difficult to put counterfeits and shoddy goods on the market. We need to give full play to the role of industrial associations and intermediary organizations, change and improve their mechanisms of self-discipline and attach importance to supervision by the general public and news media.
VI. Implementing the Strategy of Developing the Country Through Science and Education and the Strategy of Sustainable Development and Strengthening Spiritual Civilization
Expediting scientific and technological progress and innovation. We will accelerate the establishment of a state innovation system. We will concentrate on strengthening basic research and research in high and new technology of strategic importance and improve our capability of independent innovation. To upgrade industries and increase their competitiveness, we will strengthen research and development of key technology and industry-specific technology and accelerate the application of research results to production and their dissemination. We will set up new and improve existing mechanisms to encourage venture investment and provide incentives for scientific and technological innovation. We will further reform the management system for science and technology and deepen the reform of applied research institutes and non-profit research institutes. Departmental and regional barriers will be removed to rationally allocate research resources in society in order to form a management system for science and technology that integrates government departments, local authorities, institutions of higher learning and enterprises. We will step up the establishment of technological development centers of large and medium-sized enterprises. We will develop philosophy and social sciences and focus on research on topics of long-term, strategic importance, and topics that affect the overall interests of the country. We will effectively protect and manage intellectual property rights.
Continuing to give priority to the development of education. We will intensify our efforts to improve quality-oriented education and strengthen ideological and political work at schools in order to help our students improve their moral qualities, intellectual ability, physical fitness and aesthetic appreciation. We will strengthen basic education and consolidate and expand the achievements we have made in making nine-year compulsory education basically universal and eliminating illiteracy among young and middle-aged people in rural areas. We will pay particular attention to quickening the pace of making nine-year compulsory education universal in poverty-stricken areas and areas inhabited by ethnic minority groups. We will extend the reform of the management system for rural compulsory education under which county authorities assume main responsibilities. We will make sure that teachers are paid in full and on time. Senior secondary school education will be vigorously expanded. We will steadily develop regular higher education by adjusting the division of disciplines. We will make great efforts to develop secondary and higher vocational education. We will reform the curriculum and teaching materials, updating instruction content and improving the quality of teaching. We will continue to promote the reform of the internal management system of institutions of higher learning and commercialize their support services. The ideological level and professional competence of teachers should be raised in an all-round way. We will accelerate the application of IT to education and develop modern distance education. The government will increase its input in education and encourage, support and standardize the running of schools by non-governmental sectors or by Chinese-foreign cooperation.
Earnestly implementing the strategy of tapping human resources. We will adhere to the guiding principle of making the ranks of cadres more revolutionary, younger in average age, better educated and professionally more competent and the principle of having both political integrity and professional ability. We will accelerate the training and selection of outstanding personnel, especially those who are well trained in high technology, international finance, accounting, trade, law or modern management in order to meet the new needs of reform and opening up and the modernization drive. We will deepen the reform of the personnel system related to cadres to improve their selection, appointment, evaluation, incentives and supervision. We have to become adept at identifying young promising scientists and technicians and boldly give them responsible work. We will give full play to the role of engineers, technicians and skilled technical workers. In income distribution, we will implement the policy of letting technology, management and other essential factors of production have a rightful share. Scientists, technicians and senior managerial personnel who have made outstanding contributions shall be rewarded. We will take still more effective measures to attract and employ well-trained personnel from abroad and encourage Chinese students studying overseas to return home and work in China.
Maintaining sustainable development. We must adhere to the basic state policy on family planning and implement the Population and Family Planning Law. We will pay particular attention to improving family planning work in rural areas and among the floating population, keep the birth rate low, and provide good prenatal and postnatal care. We will conscientiously implement the programs for the development of work concerning women and children and protect the legitimate rights and interests of women and minors. Better care will be given to the aged. Programs to help the physically and mentally challenged deserve our concern and support. We will protect and rationally use land, mineral resources, fresh water, marine resources, forests, pastures and climatic resources in accordance with the law, implement a system of rigorous management of arable and forest land and focus on saving water and energy. We will utilize natural resources more effectively and improve the system of compensation for their use. We will continue to put more money in environmental protection. Efforts to protect the ecological environment and to prevent and control pollution will be intensified. The construction of key environmental protection and pollution control projects will be accelerated. The quality of the environment in major river valleys, regions, cities and sea areas will be improved by effectively controlling and reducing the discharge of pollutants there. We will introduce clean production methods and develop the environmental protection industry. We will expand ecological demonstration zones. More trees and grass will be planted. We will strengthen the protection of wetland. A system will be established for protecting the environment and for preventing and reducing natural disasters. We will expand health services and pay special attention to public health and to medical services in rural areas. We will explore various forms of health security in rural areas and improve the medical conditions of rural hospitals. We will prevent and treat major diseases, including contagious and endemic diseases. We will develop a nationwide fitness program and raise the competitiveness of our athletes. Good preparations will be made for the Olympic Games in Beijing in 2008 to promote reform, opening up and the modernization drive in the capital.
Promoting spiritual civilization. We must make unremitting efforts to educate all our cadres and the people in Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thinking of “The Three Represents”. We will continue to run the country by virtue as well as by law. The “Citizens’ Code of Conduct” will be implemented to encourage all our people to develop the basic virtues of “patriotism and observance of law; courtesy and honesty; solidarity and friendship; diligence, frugality and self-improvement; and devotion and contribution”. We will emphasize education in patriotism and promote the national spirit of rejuvenating China. We will work hard to disseminate scientific knowledge, to dispel ignorance and superstition, and to encourage people to be more scientifically minded and have enlightened, healthy lifestyles. We will promote mass activities to cultivate spiritual civilization. We will step up the development of social sciences, literature and art, the press and publishing, radio, film and television, and other cultural undertakings. We will maintain the correct orientation of public opinion and produce more and better works that reflect the spirit of the times and the wishes of the people. We will further reform the press and publishing, radio, film and television industries and attach great importance to the role of Internet services and their management. We will protect cultural relics and build more libraries, museums, cultural centers, science and technology centers, archives and other public cultural and sports establishments. We will improve policies for industries related to culture and encourage non-government sectors to participate in cultural undertakings. Persistent efforts will be put into the fight against pornography and other illegal products. We will severely crack down on piracy and smuggling of video disks. We will increase cultural exchanges with other countries.
VII. Further Transforming Government Functions and Improving the Work Style
These measures are needed to adapt to the new situation in the reform and opening up and to build an honest, diligent, pragmatic and efficient government. We need to fully carry out the spirit of the Sixth Plenary Session of the Fifteenth Party Central Committee by concentrating on the following three tasks:
Accelerating the transformation of government functions. Great progress has been made in reforming government institutions and in transforming government functions, but many problems remain to be solved. We need to further emancipate our minds, shake off the fetters of the traditional planned economy, and transform government functions into economic regulation, market supervision, social management and public service. We need to further define the functions of government departments to prevent cases like shifting one’s responsibility to others or having no one take responsibility. We should conscientiously implement the basic principle of “running the country according to law”, perform official duties lawfully and managing the government by high standards. We should deepen reform, reduce the scope of administrative examination and approval, standardize and simplify necessary approval procedures, stress openness and transparency, and clearly define responsibilities. For this purpose, the State Council has already issued instructions, and all local governments and departments should implement them conscientiously. We must accelerate the utilization of information technology in government administration, and promote e-administration to improve our working efficiency and exercise more effective supervision.
Improving the work style of the government. There is the need to carry the fight against corruption further and build a clean and honest government. Performing official duties honestly and serving the people are requirements that derive from the fundamental purpose of our Party and the government, as well as basic norms that every government functionary must strictly abide by. Governments at all levels and all cadres must stay honest and clean and abide by the law. We must thoroughly investigate and prosecute those who have violated the law and discipline, or abused power for personal gains. We need to conscientiously implement the Party Central Committee’s decision to make this year a year for improving the government work style. We should resolutely get rid of formalism and bureaucratism, which harm both our country and the people. No effort should be spared to cut the number of meetings and official papers to a minimum. We should initiate investigations and studies, go all the way down to the realities of life and to the people to learn their actual conditions, listen to their opinions, share their weal and woe, and lose no time in solving the problems that they resent or are dissatisfied about. We must resolutely check bad practices, such as false reports to deceive one’s superiors or subordinates, misuse of the people’s financial resources, and coercion. We should speak the truth, do solid work, and stress practical results.
Resolutely combating extravagance and waste. Extravagance and waste are already a serious problem in production, construction, circulation or consumption. Some local authorities like to build ostentatious projects in order to make a good impression or show their achievements. In urban development, they indiscriminately pursue things of the highest grade or standard. Some local authorities launch unfeasible construction projects when they cannot even pay wages on time. Some local authorities build luxurious office buildings and halls in violation of relevant regulations. Festivals and ceremonies of every conceivable description are celebrated, during which the hosts vie with one another for lavishness. Officials use public funds for wining and dining, extravagant entertainment and private travel abroad. This misconduct invariably consumes large sums of money, so we must resolutely stop this tendency. First, we must widely publicize the principles of working diligently, building the country and doing everything diligently and frugally. We must resolutely put an end to the erroneous practice of doing things without considering the actual conditions and probable results. Second, expenditures must be reduced. No effort should be spared to cut production, construction and distribution costs. All government departments, enterprises and institutions must make every cent count and prohibit all unnecessary expenses. All regions, departments and work units are obligated to formulate specific targets and measures for eliminating waste and reducing expenditures this year. Third, economic and financial discipline must be strictly enforced. A system of centralized collection and payment by the state treasury will be instituted for this purpose. Control over budgets, auditing and special financial accounts at all levels should be tightened. We will strengthen the management of revenues that exceed budget forecasts. Cases involving off-books accounts and arbitrary spending in violation of regulations will be investigated and dealt with severely.
Governments at all levels must conscientiously subject themselves to the supervision of the people’s congresses at the corresponding levels and their standing committees, take the initiative to strengthen ties with committees of the Chinese People’s Political Consultative Conference, and listen to the views of the democratic parties, federations of industry and commerce, prominent figures without political party affiliation, and mass organizations. We need to further improve the democratic policy-making system, encourage people to oversee the work of government departments and their functionaries, widen the channels for promptly reporting social conditions and popular sentiments, and ensure that government work truly reflects the people’s wishes and interests.
(Xinhua News Agency March 16, 2002)