Premier Zhu Rongji gave a report on the Outline of the Tenth Five-Year Plan for National Economic and Social Development (2001-2005) to the opening of the Fourth Session of the Ninth National People's Congress Monday, March 5.

Implementation of Science Development Strategy

Premier Zhu gave particular stress to the true implementation of the strategy of invigorating the country by relying on science, technology and education.

In his report, the premier called for greater efforts toward high-tech research that is of great strategic importance and strive to make breakthroughs in some key areas that have a direct bearing on the economic lifelines and national security and that will help enhance the independent creative power and promote industrialization of achievements in high and new technologies.

Meanwhile, Zhu said, it is necessary to provide technical support to the efforts to upgrade traditional industries, with emphasis put on processing and conversion of agricultural produce, manufacturing of equipment, conservation of water and energy, and after-treatment of textiles.

The premier called for greater efforts to strengthen basic and applied research, especially frontline interdisciplinary research, strengthen applied basic research in selective areas where China enjoys advantages and which are important to development. He called for new progress in genomics, information technology, nanoscience, ecology and geoscience. He also called attention to the fusion of natural and social sciences to promote the development of management science and to the development of philosophy and other branches of social sciences.

On accelerating reform of the structure of science and technology development system and the integration of science and technology with the economy, the premier stressed the necessity to strengthen the state creative system and make enterprises the main body of technical progress and creation.

"We need to continue to encourage research institutes engaging in technology development to become part of enterprises or to be converted into enterprises, push forward the reform of non-profit making research institutes, and establish a number of internationally influential research institutions," he noted.

He also stressed the importance of developing intermediary service organizations in the areas of science and technology, improving the mechanism of risk investment, and establishing a growth enterprise market to support small and medium-sized enterprises in their technical innovation.

Zhu urged persistence in advanced development of education, saying that education should be geared up to modernization, the world and the future, with emphasis on quality education so as to enable students to develop in an all-round manner, morally, intellectually, physically and aesthetically.

Premier Calls for Pushing Forward Reforms

To further improve the socialist market economy, promote economic restructuring and ensure economic growth, China will press ahead with reforms and open wider to the outside world.

He pledged to deepen reform of state-owned enterprises to enable them to compete as equals in a market economy. The key issue in this regard is to accelerate the establishment and improvement of a modern corporate structure, he noted.

China needs to encourage large and medium-sized state-owned enterprises to adopt the share-holding system and to change their operational mechanism by listing their shares on the stock market, setting up joint ventures with foreign investors, or holding each other's shares, the premier said.

He stressed that the state must hold a controlling stake in strategic enterprises that concern the national economy and national security, but not necessarily in others. More efforts need to be made to separate the functions of government from those of enterprises, and the functions of government need to be transformed to reduce administrative oversight and approval.

Zhu urged further reforming the management systems of industries under state monopoly, such as electricity, railways, civil aviation and telecommunications, and introduce a mechanism for competition.

The ownership system needs to be further improved, he said. "We need to uphold the dominance of the public sector of the economy, let the state-owned sector play a leading role, develop various forms of collective undertakings, and support, encourage and guide a healthy development of private and individual sectors of the economy," he stressed.

Zhu called for overhauling and regulating market order, and expanding the market system. This is an urgent task to ensure normal operation of the economy and an important measure to strengthen the socialist market economy, he said.

China must persist in cracking down on criminal activities such as producing and marketing fake and shoddy goods, tax evasion, tax fraud, obtaining foreign currency through deception, and smuggling, he said.

On enhancing macro-control, and deepening reform of the finance, taxation, banking and investment systems, the premier said that China needs to gear its macroeconomic policies to changing economic situations.

While expanding domestic demand and checking the trend of deflation, China needs to be on guard against possible overheated economic growth and inflation, Zhu noted. "We will continue to implement a prudent monetary policy and regulate money supply in a timely fashion to keep the renminbi stable," he said.

China needs to carry out a comprehensive reform of wholly state- owned commercial banks in the light of modern banking principles and bring the role of policy banks into full play, according to the premier. China needs to develop medium-sized and small banking institutions, standardize and improve the securities market, and safeguard the interests of investors. China also needs to expand the insurance industry and improve supervision of financial institutions, he added.

Preparations for WTO Accession

Premier Zhu Rongji stressed that China should lose no time to prime for the accession to the WTO and get everthing done properly during the transitional period.

Zhu called for more effective measures to change the ways of government administration, enhance the competitiveness of Chinese enterprises; bring the foreign trade system into line with international convention and make it conformable to the national conditions; step up the work of reviewing and revising relevant laws and regulations; and train people well versed in international trade rules.

Meanwhile, China should expand import and export trade, with emphasis on the export of high-quality goods and technology; optimize the mix of export commodities by expanding the share of high and new technology products and by raising the technological contents and added value in traditional commodities exported in large quantities; expand the scale of the service sector; standardize the regulation of processing industries and increase the value-added increment of such trade; vigorously promote diversification of export markets and open up new ones.

In import trade, China should focus on importing advanced technology, key equipment and important raw and processed materials that are urgently needed in the country, he said.

According to the outline, by 2005, China's imports and exports will top 680 billion US dollars, with the proportion of electronic and machinery products to increase to 50 percent of the total.

Zhu urged better utilization of foreign capital; open the service sector to foreign investment step by step; encourage foreign investors, especially multinational corporations, to invest in high-tech industries and infrastructure; and encourage them to set up research and development centers in China and to participate in the restructuring and renovation of state-owned enterprises.

The government will support eligible enterprises to get listed on overseas stock markets and further improve the investment climate, and explore new ways to utilize more foreign investment, such as acquisition, merger, risk investment, investment funds, and investment in securities.

The premier encouraged enterprises with comparative advantages to invest in processing trade abroad, to develop foreign resources in cooperation local partners, to contract for construction projects, and increase export of labor service. But the premier stressed oversight and management of such enterprises in order to prevent a drain on state property.

Improve People's Living Standards

One of the important tasks for the next five years is to bring about a big improvement in the living standards of the people and make their life more comfortable, said Premier Zhu Rongji.

In the report, the premier promised to make great efforts to improve the living standards of the people and establish a sound social security system.

A sound social security system is a big matter that concerns reform, development and stability, the premier said. "We need to ensure that basic living allowances for laid-off workers from state-owned enterprises and basic pensions for retirees are paid in full and on time," he said.

At the same time, he noted, it is necessary to establish a social security system, which, independent of enterprises or government institutions, has a diversified sources of funds, standardized rules and socialized management and services.

The premier promised to make greater efforts to improve the basic old-age insurance system for urban workers that combines social pool with individual accounts, improve the unemployment insurance system and gradually incorporate the basic cost-of- living allowances for workers laid off by state-owned enterprises into unemployment insurance; and promote the basic medical insurance system for urban workers and carry forward the reform of medical institutions and the medicine distribution system.

He urged to set up reliable and stable mechanism that ensures the raising of funds, effective operation and strict management of the social security system and develop social security undertakings, such as social welfare, social relief, special care to disabled servicemen, and to family members of revolutionary martyrs and service and social mutual aid; safeguard the legitimate rights and interests of women, the under-aged, the aged and the handicapped; and support the various programs to help the handicapped.

During the Tenth Five-Year Plan period, we face the demanding task of expanding employment, the premier revealed.

While maintaining a fairly high growth rate of the economy, attention should be given to developing labor-intensive industries with comparative advantages, especially service businesses that can provide large numbers of jobs; encourage the development of collective, private and individual businesses to create more jobs; set up a flexible employment system to provide a greater variety of jobs; help people change their ideas about employment and encourage them to start their own businesses or find jobs for themselves; make greater efforts to develop the labor market, improve employment services, expand job training, and form a market-oriented employment mechanism.

Zhu pledged to increase income of urban residents, especially those with low incomes, and improve their housing and transportation conditions.

He urged efforts to build more low-cost housing and establish a system to ensure its supply and energetically develop public transit system; strengthen city greening and infrastructure projects in urban and rural areas; improve the living environment of urban and rural residents; develop community disease prevention and control and health services; improve health services in rural areas; and expand public sports facilities.

Strategy of Sustainable Development

Premier Zhu Rongji pledged to bring about a more harmonious development of population, resources and environment and place the sustainable development strategy in a more prominent position.

In his report the premier urged more efforts to do the family planning work well in the rural areas and among the floating population; and establish an interest-oriented family planning mechanism and at the same time develop the undertakings for the aged.

On the issue of protecting natural resources and using them properly, Zhu called for the protection and proper use by law of valuable resources such as fresh water, farmland and energy in accordance with the law; gradually establish a system of reserves for strategically important mineral resources and ensure their safe supply; strengthen the comprehensive development, utilization and conservation of marine resources; increase the recycling of resources in order to utilize the resources more effectively; improve the system of paying compensation for the use of natural resources; safeguard the rights and interests of the state as the owner of mineral and other resources; improve laws and regulations in this regard and strengthen law enforcement.

Referring to improving ecological conservation and strengthening environmental protection, the premier called for greater efforts to complete natural forest protection projects on the upper reaches of the Yangtze River and the upper and middle reaches of the Yellow River, intensify the building of shelterbelt system in Northeast, North and Northwest China and on the middle and lower reaches of the Yangtze; control urban pollution by comprehensive measures so as to improve markedly the environmental quality of large and medium-sized cities; protect the rural environment, especially from pollution caused by farm chemicals; and improve the environmental, meteorological and seismological monitoring systems to help prevent and reduce natural disasters.

Ethics in Line With Socialist Market Economy

Premier Zhu Rongji called for the building of an ideological and ethical system adaptable to the socialist market economy and combination of governing the country by law with governing the country by moral principles.

The premier pledged to vigorously promote socialist spiritual civilization.

China should consolidate and strengthen the guiding role of Marxism and educate the people in Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping Theory; promote patriotism, collectivism and socialism; continue education of our cadres in the important principle of "Three Represents" (The Communist Party of China represents the requirement to develop advanced productive forces, an orientation towards advanced culture, and the fundamental interests of the overwhelming majority of the people in China.) and foster the spirit of studying hard, being politically-minded, and being honest and upright; and adhere to a correct outlook toward the world and life and have correct values.

China must provide correct guidance to public opinion, and place strong emphasis on the establishment and management of new information media; build more libraries, cultural centers, science and technology centers, museums, archives, and recreational centers for young people and senior citizens; deepen reform of the cultural system and promote the development of industries related to culture; and organize and standardize the cultural market and persist in the fight against pornographic and other illegal products.

Political Reform

Premier Zhu Rongji has called for developing a socialist democratic political system and governing the country according to law .

China will press ahead with reform of the political system; implement democratic election, democratic decision making, democratic management and democratic supervision; protect the extensive rights and freedoms of the people as prescribed by law; and respect and guarantee human rights, energetically improve socialist democracy and the legal system, he said.

China should continue to strengthen the legislative and supervisory role of the People's Congress, and expand the role of the Chinese People's Political Consultative Conference (CPPCC) in political consultation, democratic supervision, and administration and deliberation of state affairs; and bring the legal system into line with a socialist market economy, he said.

Governments at all levels must conscientiously subject themselves to the supervision of the people's congresses at corresponding levels and consult with the CPPCC and they must govern in accordance with law and be strict in performing official duties, the premier said.

He urged deepening reform of the judicial system, strictly enforcing laws, and administering justice impartially; putting greater efforts into combating corruption and building a clean government; strengthening legal education and raising the awareness of law among all citizens; and strengthening development of legal infrastructures and improving the qualifications of procuratorial, judicial and public security officers.

He pledged using legal means to combat ethnic separatist activities, religious extremist forces, violent and terrorist activities, cults, and illegal activities carried out under the guise of religion.

Defense Industry

China will readjust its defense industry, develop new weapons and equipment, and utilize modern technology, especially high technology, to improve the defense capabilities and combat effectiveness of the armed forces.

"As we focus our efforts on developing the national economy, we must also strengthen our national defense and increase our defense capabilities," the premier said, noting that strengthening national defense and building up the armed services is an important guarantee for the security of the state and the success of the modernization drive.

"We need to strengthen defense-related scientific research, reform and restructure science, technology and industry related to national defense, develop new weapons and equipment, utilize modern technology, especially high technology, to improve the defense capabilities and combat effectiveness of the armed forces, and ensure their preparedness for any contingency," he said.

He urged working conscientiously to implement the military strategy of active defense in the new era; persisting in reform and innovation; strengthening the armed forces through science and technology, with emphasis on quality and thrift; running the armed forces by law; streamlining the armed forces in a Chinese way in order to build a more modernized, standardized revolutionary army; and raising the people's awareness of the importance of national defense and improving the mobilization system.

China will continue to pursue an independent foreign policy of peace, develop friendly relations and cooperation with all countries on the basis of the Five Principles of Peaceful Coexistence, and strive for a long-term peaceful international environment and good relations with its neighbors, he said.

Do Utmost for Peaceful Reunification

The mainland side will, together with the vast majority of its compatriots in Taiwan, resolutely put a stop to any separatist attempt and do its utmost to achieve peaceful reunification.

"An early settlement of the Taiwan issue and the accomplishment of national reunification are the shared aspirations of the entire Chinese nation and an enormous task we are now facing," the premier said.

The mainland will continue to follow the basic principles of " peaceful reunification" and "one country, two systems" and the eight-point proposal put forward by President Jiang Zemin, he noted. "We will, together with the vast majority of our compatriots in Taiwan, resolutely put a stop to any separatist attempt and do its utmost to achieve peaceful reunification," he said.

Zhu pledged to adhere to the one China principle, continue to push for cross-Straits dialogue and negotiations on that basis, and promote economic, cultural and personnel exchanges between the two sides.

"We are confident that with the unremitting efforts of all Chinese people, the great cause of national reunification will surely be accomplished at an early date," he stressed.

"As we enter the new century, we will continue to adhere to the principle of "one country, two systems" and the basic laws of Hong Kong and Macao special administrative regions. We will render full support to the chief executives and governments of Hong Kong and Macao in their efforts to govern the regions in accordance with law, and defend the long-term prosperity and stability of Hong Kong and Macao," he said.

Tasks in 2001

The year 2001 is the first year of the new century and the first year for the implementation of the Tenth Five-Year Plan for National Economic and Social Development (2001-2005).

To ensure a good beginning, it is crucial to act in the spirit of the recently-convened Fifth Plenary Session of the Party's Fifteenth Central Committee and its conference on economic work, and do all aspects of this year's work well.

China will adhere to the policy of expanding domestic demand and continue to follow a proactive fiscal policy and a prudent monetary policy, he said.

In 2001, China will issue 150 billion yuan worth of long-term treasury bonds, and invest the ensuing revenue in projects under construction and development projects in its western regions.

The premier also promised to raise staff salaries of government organizations and institutions at an appropriate rate; increase the earnings of urban residents with low incomes; put strengthening agriculture and increasing farmers' incomes on the top of the economic agenda, and take effective measures to solve outstanding agricultural and other problems presently facing rural areas; and consolidate and build on achievements in the reform of state-owned enterprises, and pay special attention to establishing a modern corporate structure, transforming operational mechanisms and intensifying scientific management.

China should quicken its preparations for accession to the World Trade Organization (WTO), he stressed. "We need to improve the social security system, create more jobs by various means, and raise people's living standards," he said.

Zhu said that an important and pressing task is to make great efforts to reorganize and standardize the order of the market economy. He urged promoting spiritual civilization and improving democracy and the legal system; continuing to handle properly the relationship between reform, development and stability, improving all facets of public security and maintaining social stability.

"We fully support Beijing's bid to host the Olympic Games," he said.