China will also create a "level playing field" for the development of both State-owned and private enterprises, said Li Rongrong, another ministerial official at the press conference which was held on the sidelines of the ongoing 16th National Congress of the Communist Party of China (CPC).

Since the beginning of this year, China's national economy has maintained a good momentum of rapid growth, said Zeng, minister of the State Development Planning Commission.

"It's expected that the nation's gross domestic product (GDP) will exceed 10,000 billion yuan (US$1,200 billion) in 2002, up about 8 per cent from last year," he said.

The first three quarters have already seen the national economy grow by 7.9 percent, 0.3 percentage points higher than the same period in 2001, he said.

The total imports and exports are likely to amount to US$600 billion, and contractual foreign direct investment will hopefully record a new high of more than US$50 billion this year, Zeng added.

Li, who is minister of the State Economic and Trade Commission, said China's industrial exports increased by 16.7 per cent a year from 1989 to 2001, contributing significantly to national economic and social development.

Asked about the consistency of China's economic policies in the years to come, Zeng said the main policies expressed in General Secretary Jiang Zemin's report to the Party congress on Friday are actually consistent with policies conducted since the 15th Party congress in 1997.

In addition to maintaining consistency, China will readjust and improve its economic policies to keep pace with the times and in accordance with new situations, he said.

In response to a question on a provisional regulation his commission released on Saturday regarding the use of foreign capital for restructuring State-owned enterprises (SOEs), Li said the statute indicated that China is deepening SOE reform and opening up wider to the outside world.

Details of the regulation are not currently available.

Li said the regulation is a continuation of a circular the commission issued last week along with the China Securities Regulatory Commission, which gives foreign investors wider access to China's stock market by allowing them to use the public tender process to buy State-owned or institutional shares in home-grown listed companies.

He did not specify the proportion of shares to be held by Chinese partners in an SOE restructured with foreign funds, but said the number of SOEs will continue to shrink in the years ahead.

"One thing is quite certain: The number of State-owned enterprises will drop further," Li said.

He estimated that the remaining SOEs will improve their quality and service.

Already the number of SOEs in China has plunged from 102,300 in 1989 to 46,800 last year, Li said.

But the overall profits they made jumped to 238.9 billion yuan (US$28.7 billion) in 2001 from a meagre 74 billion yuan (US$8.9 billion in current exchange rate) in 1989, he said.

Li said SOE reform is the "most difficult and most challenging central link" of the entire economic restructuring of China.

Reform will only deepen further in China's pursuit of a new industrialization model that includes using high-tech methods, and having good economic returns, low resource consumption, little pollution and efficient use of human resources, he said.

While continuing to sharpen the competitive edge of the State sector, China will also support and guide the private sector for better development to create a mutually beneficial situation where the public and private sectors help each other, he said.

Li says his commission does not give special treatment to SOEs.

China's commercial banks have no responsibility and are not obliged to render loans to SOEs, he said.

"We treat SOEs and private firms equally," he said. "All our policies are made public on our website." Private and State firms are equal competitors and enjoy the same market access. All economic sectors open to foreign capital will also be open to domestic private businesses, he said.

Zeng said: "If private enterprises show financial strength and have a good reputation, we will be in a position to approve them to issue bonds."

The downsizing of State-owned enterprises in the deepening reform and restructuring has laid off up to 24 million workers in recent years, Zeng said.

Among them, 17 million have found new jobs, but more than 6 million still frequent re-employment centres, he said.

The pressure on employment is also mounting because each year, some 10 million new workers - such as college graduates - enter the workforce, and a surging number of farmers migrate to urban areas seeking jobs, Zeng said.

As a result, the unemployment rate is projected to hit 4 per cent by the end of this year, Zeng added. This is slightly higher than the same figure at the end of 2001.

Despite the rising unemployment rate, China is still stable, partly because the country's social security system has played its due role, he said.

Governments at all levels have given top priority to addressing unemployment, the minister said.

To solve problems cropping up on our way forward through development, China will speed up economic development to ease its employment pressures, Zeng said.

The country's economic restructuring will gain speed, and the development of the service industry will increase, he said.

Emerging private enterprises can absorb some of the redundant labour, he said.

In addition, the government will provide services in training laid-off workers and create more labour markets, he said.

The past 13 years have been the best period yet in the history of China's development, where people have gained more than ever before and the society has enjoyed the highest level of stability, Zeng said.

(China Daily November 11, 2002)