Zhu made the remarks while explaining the Proposal for Formulating the 10th Five-Year Plan for National Economic and Social Development at the Fifth Plenary Session of the 15th Communist Party of China (CPC) Central Committee last week.

Zhu explained 10 aspects of the proposal:

Implementation of the 9th Five-Year Plan;

Main objectives and tasks during the 10th Five-Year Plan period;

Optimizing and upgrading the industrial structure;

Coordinated economic development among different regions and between urban and rural areas;

Developing science, technology and education and the fostering of talented professionals;

Deepening reform and opening wider to the outside world;

Raising people's living standards and improving the social security system;

Advancing socialist, ethical and cultural progress and the construction of the socialist democracy and legal system;

National defense building;

Strengthening and improving the Party's leadership.

Reviewing China's economic and social development achievements during the 9th Five-Year Plan period (1996-2000), Zhu said that with the successful implementation of the 9th Five-Year Plan, China materialized its second strategic objective in the modernization drive, greatly increasing productive forces and seeing people living a relatively comfortable life.

Major historical changes have also taken place in the balance with market supply and demand, in the environment for economic development and in external economic relations.

"All those changes have laid a solid foundation for implementing the 10th Five-Year Plan and for hitting the third strategic target," he said.

However, many contradictions and problems still exist in the country's social and economic life, which should not be ignored, he noted.

These problems include an irrational industrial structure, imbalanced economic development between different regions, being comparatively backward in science and technology, the weak competitiveness of enterprises in general, the shortage of some important resources, increasing employment pressure, a deteriorating environment in some areas, slow income rises for some residents, and the increasing gap in income distribution, he said.

There is a lack of a sound environment in which enterprises of all kinds of ownership can compete on an equal footing and seek common development.

He also pointed out that corruption and extravagance still exist, and the situation of public security is poor in some areas.

Zhu called for enough attention to be paid to these problems and effective measures to be taken to tackle them during the 10th Five-Year Plan period.

On the main objectives and tasks during the 10th Five-Year Plan period, Zhu stressed that to sustain fast economic development, it is imperative to make strategic readjustments to the country's economic structure by focusing on improving economic efficiency.

The CPC Central Committee proposal noted that during the 10th Five-Year Plan period, development must be the theme, with economic restructuring as the masterstroke, reform, opening-up and scientific and technological progress as the driving forces, and enhanced living standards as the basic point.

Zhu said the proposal centers on solving problems in economic and social development by putting forward suggestions on guiding principles, major tasks and overall strategy.

On strengthening agriculture's primary position, Zhu gave special emphasis to speeding up the reform of the taxation system in rural areas, saying that government staff in towns must be cut and taxes and fees reduced to alleviate farmers' burdens.

On infrastructure construction and resource strategy, Zhu stressed the importance of handling the issue of water conservation from a strategic perspective.

He said that while many parts of the country, especially large and medium-sized cities in the north, are suffering a frequent shortage of water, the practice of wasting water is rampant everywhere. "The situation should be remedied immediately," he said.

Zhu called for great efforts to popularize various kinds of measures to save water, and to develop water-saving agriculture, industry and services, in a bid to establish a society concerned about conserving water.

Zhu disclosed that the State will soon publicize preferential policies to support the country's strategy of opening up the western region, which will include stepping up financial support and encouraging enterprises at home and abroad to invest in the region.

The advance and innovation of science and technology must be quickened, Zhu said, adding that the reform of the science and technology research system should be wider to form a new system catering to market demand, to link scientific research with economic development.

Zhu called for more opening up of the market and breaking the monopoly of some government departments and enterprises to establish a unified, fair and standard market system in the country.

New ways should be adopted to utilize foreign investment, including mergers, acquisition, investment funds and securities investment to utilize middle and long-term overseas capital, Zhu said.

Efforts should be made to attract multinational companies to invest, set up research and development (R&D) centers, and participate in the restructuring and regrouping of State-owned enterprises in China, he said.

Zhu noted that in setting up joint ventures, it is not necessary for Chinese enterprises to have a controlling share except in those vital to the national security and economy.

Zhu also urged the establishment of a fair mechanism of income distribution, encouraging profit-sharing and enhancing the role of taxation in regulating income levels.

To keep in line with the demands of economic reform and the modernization drive, the reform of the political system will continue during the 10th Five-Year period along with enhancing democracy and the reconstruction of the legal system, Zhu said.

The decision-making process should be more scientifically designed and be democratic to ensure that the people will be able to exercise their rights in accordance with laws, he said.

The premier called for a continued fight against corruption, with overall consideration of the new situation in a market economy. A sound supervision and administration system must be established to curb corruption, he said.

Major tasks during 2000-2005

Zhu said that in drafting the 10th Five-Year Plan, China should focus on development, pursue economic restructuring, and take reform and opening-up to the outside world and scientific and technological advancement to be the driving forces.

Boosting living standards should be taken as the fundamental starting point of the national economic and social development program for the 2001-2005 period, Zhu said.

He noted that the 10th Five-Year Plan is the first such plan in the new century, in the beginning of the third stage of China's modernization drive and following the completion of the initial stage of establishing the socialist market economy. Therefore, it will be of great significance to formulate a plan that is practical and encouraging and serves as a guideline for economic and social development in the 21st century.

The first five or 10 years of the new century will be crucial to the country's economic and social development, the strategic restructuring of the economy, the perfecting of the socialist market economy and the expansion of opening-up, according to Zhu.

He pointed out that one of the guiding principles of the proposal is to pinpoint development as a key subject of the 10th Five-Year Plan, concentrating on the central point of economic construction. He said the decision was based on the correct assessment of both domestic and international situations.

Noting that development is the absolute principle, Zhu said the 10th Five-Year Plan has to seize opportunities, accelerate development and maintain growth to secure consistency of pace and efficiency.

"In order to maintain rapid economic growth, we have to concentrate on the focal point of improving economic efficiency and carry out a strategic restructuring of the economy," he said.

"This is the basic theme of the 10th Five-Year Plan," he said.

China has come to the point where it promotes economic growth with economic restructuring, he said. "It will be impossible to make further progress without economic restructuring, and it will be impossible to achieve healthy growth without economic restructuring."

It is not a partial adjustment, but an all-round renovation that involves aspects of industrial structure, regional distribution and the relationship between urban and rural areas, and is aimed at improving overall quality and competitiveness for sustainable growth, the premier said.

According to Zhu, the reform and opening-up should be pushed forward in order to maintain the rapid growth of the economy. He said that reform and opening-up are necessary to increase national strength and people's wealth and are strong driving forces for restructuring the economy and pushing forward economic growth.

"In order to narrow the gap between China and the developed countries and increase comprehensive national strength, we have to use the advancement of science and technology as another strong driving force, further implement the strategy of revitalizing the nation through science and education, accelerate advancement and innovation of science and technology, and foster, attract and assign proper roles to talented people so as to achieve new and greater progress in science, technology and education," he said.

Zhu emphasized that the government must give priority to improving people's living standards. He said the government has to create more employment opportunities, increase residents' income, rationalize the distribution of income, perfect the social security system and ensure people have a better life.

Zhu noted that the proposal of the CPC Central Committee has put forward suggestions about the guidelines, major tasks and general arrangement of social and economic development from 2001 to 2005.

He said the proposal focuses on the issue of social and economic development. Since the proposal is not a summary of the 10th Five-Year Plan, it mainly focuses on important issues of strategy, the general situation and policy.

Zhu noted that as it is approved by the CPC Central Committee, the proposal will serve as the basis for the State Council to draft the outline of the 10th Five-Year Plan, which has to be approved by the National People's Congress (NPC) before being made public and implemented.

He said that the draft version will include some necessary quotas and projects, though fewer in number and less detailed than those in previous five-year plans. Zhu said the outline will also put forward specific policies and measures designed to guide economic activities with economic leverages instead of intervening in the operation of enterprises with administrative rules.

Zhu said that this reflects yet another step forward with the requirements of the socialist market economy.

This is a distinct feature of the proposal that the CPC Central Committee has put forward, Zhu said.

Optimizing industrial construction

Premier Zhu called for efforts to be made to strengthen the agricultural sector, accelerate the use of information technology and promote the construction of infrastructure.

Zhu said China pays great attention to ensuring grain security, increasing income for farmers and alleviating their heavy burden of feeding the country.

"For a large socialist country like China with more than 1 billion people, it is now and will always be most important to rely on ourselves to solve the grain problem," said Zhu.

Zhu stressed that when grain supply temporarily outruns demand, which is happening now, the country should not neglect the consolidation of the farming sector.

"This year's overall decrease in grain output has warned us again that our agricultural base is still flimsy and lacks an anti-disaster capacity."

China should attach great importance to protecting and improving the grain production capacity and building production bases with a stable output to ensure grain security.

Zhu urged governments at all levels to stick to CPC's basic policies for rural areas and take effective measures to increase the income of farmers.

Reform of the rural taxation system should be increased, government staff in towns should be streamlined, and taxes and fees should be reduced to effectively ease the burden on farmers.

Zhu said it is a difficult task for China to continue the modernization and industrialization process, and one strategic measure is to promote the use of information technology in economic and social development.

Zhu noted that industrialization is the basis for developed countries to enter the information technology-based stage. The new historical opportunity provides China the chance to integrate industrialization with information technology, to use information technology to upgrade the industrial sector, and to promote the advancement of productive forces.

The premier underlined further strengthening of infrastructure construction in the fields of water conservation, transportation and energy.

The lack of water resources has severely inhibited China's economic and social development, Zhu said, adding that the proposal has highlighted economizing and protecting water resources as a strategic task while stressing the importance of building water conservation projects.

Various water-saving measures should be applied and the development of water-saving agriculture, manufacturing and service industries should be encouraged.

Another problem in the resource sector lies in energy, especially oil, said Zhu. He noted that domestic oil production cannot meet the demands of economic and social development and spending large amounts of money on oil imports is not a long-term choice.

Zhu emphasized the need for great efforts to readjust the energy structure and take various measures to minimize oil consumption.

Zhu stressed that the key to economic restructuring is taking the market into proper consideration and relying on the development of technology. At the same time, government intervention and policy regulation should be adopted to effectively guard against any duplication in construction, Zhu said.

Speeding up western development

China has pledged to strive for a major breakthrough in infrastructure construction and environmental development in its western region in 5-10 years to create a good start for western development.

The proper restructuring of the regional economy is a significant part of the overall strategy of national economic restructuring, Zhu said.

"We should seek every opportunity to implement the western development strategy to achieve a co-coordinated development among different regions of the country, and at the same time promote the urbanization process," he said.

Developing the west is an "arduous" historic task brought forth by late leader Deng Xiaoping's vision of achieving common prosperity in regional economic development, Zhu pointed out.

In Deng's view, in the initial stage of China's development, the middle and western regions would have to support the opening and growth of the eastern coastal regions. In the second stage, when the coastal regions have gained strength, it would be their turn to help the middle and western regions.

Zhu said that western development is of great economic and political significance and needs several generations' persevered efforts. "Therefore, we should have a strong sense of urgency and get mentally prepared for the long-term effort," he said.

Zhu pointed out that infrastructure construction, environmental protection, science and education should be given priority in western development. A number of key projects like the project to pipe natural gas and electricity from the west to eastern areas should also be given much attention, he added.

"The Chinese Government will soon introduce new favorable policies to support western development," Zhu disclosed, adding that these policies include an increase of funds into infrastructure construction, promotion of the opening-up of the west and incentives to attract overseas investment.

"All these favorable policies will be gradually perfected through actual practice," Zhu stressed.

Zhu also urged eastern coastal regions to actively engage in western development and to take concrete measures to help the region's development.

"It is not only required by the national economic development, but will also provide new development opportunities for the east itself," Zhu said.

"The implementation of the western development strategy is by no means implying a slowdown in eastern development," Zhu noted. He said that the eastern development was and will continue to be crucial, both financially and technologically, to the national economy.

Promoting science, technology and education

Premier Zhu Rongji urged the nation to attach strategic importance to the role of science, technology and education, and the fostering of talented professionals.

In his explanation made during the CPC session, Zhu listed three key points of development in the science and technological fields for the next five years, as follows:

First, strategic high-tech research should be carried out, focusing on the technology of information, biology, new materials, manufacturing, and aerospace and aviation. China should increase its ability to make independent technological renovations in the major fields of national economic and security interest.

Second, technological support should be given to reform and upgrade traditional industries.

Third, more studies should be undertaken in order to strengthen the technological foundation for the progress and renovation of science and technology.

Zhu called for further deepening of the restructuring of the country's science and technological sector, to build a new system that is compatible with the requirements of a market economy.

The State should create a sound environment for the progress and renovation of science and technology, through speeding up the setting-up of a venture investment system, opening a second-board stock exchange, and supporting the industrialization of new and high technology, the premier noted.

"Professionals are the most important and valuable resource," Zhu stressed, "particularly under the current circumstances with the fast-developing new technological revolution."

China needs to promote a large number of professionals in various fields in a bid to meet the requirements of the information revolution and China's upcoming entry into the WTO, he said.

Reform of the education system should be carried out in order to improve the mechanism of fostering new talents and the overall quality of labor, Zhu said.

Further reform and opening-up

Zhu said China's economic restructuring and development hinges on reform.

"In the next five years or more, we must unswervingly promote reform, widen the opening-up, and break through systemic obstacles that hinder the development of productive forces, in an effort to provide powerful driving forces and guarantees for national economic and social development," the premier stressed.

China can realize the objectives of getting the large and medium-sized State-owned enterprises out of difficulty within three years, which is only a temporary target, he said.

He added that it is a long-term task and needs great effort to deepen the reform of State-owned enterprises.

"Most important is to build up a modern corporate system, promote shareholding and strengthen scientific management," Zhu said.

An important issue that must be tackled in promoting the reform of State-owned enterprises is to separate the function of government and businesses. Otherwise, enterprises will never become the principal part of market competition, he said.

Zhu called on relevant government departments and such monopoly sectors as power, railways, civil aviation and communications to promote management system reform according to the function-separation principle, adopt competitive mechanisms, and reduce administration in a move to adapt the relationships of governments, enterprises and the market to the requirements of a socialist market economy.

"We must adhere to the basic economic system under which public ownership plays the major part, while economies of diversified ownership seek common development," Zhu said.

Only by sticking to diversity, continuing restructuring and improving ownership structures can China adapt to and promote the development of social productive forces, he said, noting that private firms are important components of the socialist market economy.

"We should create a fair competitive environment for enterprises with different forms of ownership, and support, encourage and guide private and individually-run businesses, especially small and medium-sized science and technology-based enterprises, to develop healthily," the premier emphasized.

Further efforts should be made to open up market prices, break up monopolies and regional barriers in a bid to set up and improve a unified and orderly national market system for fair competition, and fully utilize the role of the market in resource distribution and restructuring, he said.

The premier said that during the 10th Five-Year Plan period, emphasis should be placed on cultivating and developing key market elements, and regulating and developing the securities market.

Corresponding macroeconomic polices should be adopted according to changes in the macroeconomic situation. In the early period of the 10th Five-Year Plan, the proactive fiscal policy and the stable monetary policy should be continued in order to promote investment and consumption, and encourage exports, he said.

"China's opening-up will enter a new stage during the 10th Five-Year Plan period. So we should increase efforts to make preparations for entry into the World Trade Organization in a bid to raise our competitiveness and gradually expand opening areas," Zhu said.

The premier stressed that the form of foreign capital used could be more varied, such as purchasing, mergers, investment funds, securities investment, and medium- and long-term foreign investment.

Positive efforts should be made to attract foreign multinational corporations to invest in China, set up technological development centers, and participate in the reorganization and transformation of State-owned enterprises, he said.

"It is not necessary for China to hold controlling shares in businesses when running joint ventures, except for important ones concerned with State security and economic vitality," he said.

Improving people's life

People are expected to live a better life during the 10th Five-Year Plan period after their living standards generally hit the "well-off" level at the turn of the century, Zhu said.

He said the key to improving people's livelihoods is to increase their employment opportunities and incomes, adding that this could be achieved by developing the economy, especially intensive-intensive industries, and developing the collectively-owned and privately-owned sectors.

Zhu said research and management are playing an increasingly bigger role in social production. He called for deeper understanding of labor theories and the value of labor under the new conditions.

Productive factors like capital and technology should be brought into account in the distribution of earnings, so as to set up a sound distribution system, according to the premier.

A sound social security system is related to general issues like reform, development and stability, he said, noting that it is becoming even more important along with the deepening of structural adjustment and reform.

China's social security system must be compatible with the level of the country's national development, he said.

Zhu pledged to build up a scientific management system and prepare for the transition to a new social security system.

Developing socialist democracy

Zhu urged promotion of socialist cultural and ethical progress and development of socialist democracy and the rule of law in China.

This is of great importance for achieving the overall improvement in the quality of Chinese people, increasing the cohesiveness of the nation, and providing the current reform, opening and modernization drive with a powerful spiritual driving force and political and legal guarantee, Zhu said.

Zhu said that it is an important goal for the socialist modernization to develop the socialist democratic politics.

The basic political system must be maintained and improved, Zhu said, pledging to push forward political restructuring during the 10th Five-Year Plan period and strengthen democracy and the rule of law, so as to meet the demands of economic restructuring and the modernization drive.

Efforts should be made to make decisions more scientific and democratic and to further expand grassroots democracy, so as to ensure that the people exercise their democratic rights directly, the premier noted.

Strengthening national defense

Zhu called for a strengthening of China's national defense, stressing it is a basic guarantee to State security and the ongoing modernization drive.

The army should be built by focusing on its quality, developing science and technology, advocating thriftiness, adopting strict discipline and carrying out reforms and renovations to boost its capability of defensive battles under high-tech circumstances, said the premier.

Zhu called the defense industry a strategic sector as it is related to long-term national interests. A new defense industry system compatible with the requirements of national defense and a market economy should be built up by accelerating adjustment, reform and development, he said.

Efforts should be made to improve the level of the defense industry as a whole and to develop new and high-tech weapons, he stressed.

CPC to play key role

The Communist Party of China (CPC) is the key to realizing the goals of the country's new five-year plan and winning victories in building socialism with Chinese characteristics, Premier Zhu Rongji said.

Zhu made the remarks last week at the 5th Plenary Session of the 15th CPC Central Committee when explaining the Proposal of the CPC Central Committee for Formulating the 10th Five-Year Plan (2001-2005) for National Economic and Social Development.

Stressing the importance of Party building, Zhu said that only by making substantial efforts to improve and reinforce the leading role of the Party, can the goals of the 10th Five-Year Plan be fulfilled.

He also called for a continued fight against corruption with consideration of new situations, characteristics and trends of the market economy, saying that fighting corruption and advocating a clean government are linked to the fate of the Party and the modernization drive.

He urged that a sound supervisory and administrative system be established to curb corruption.

(Xinhua News Agency October 20, 2000)