REPORT ON THE WORK OF THE GOVERNMENT

Zhu Rongji

Premier of the State Council

Fellow Deputies,

Now, on behalf of the State Council I submit the report on the work of the government for your examination and approval and also for comments and suggestions from members of the National Committee of the Chinese People's Political Consultative Conference.

First, I would like to report on our work in 2001.

In the face of complex and volatile international situation, under the leadership of the Communist Party of China, the people of all ethnic groups surmounted difficulties, strode forward, and made significant new achievements in reform, opening up and the socialist modernization drive during the first year of the new century.

The national economy maintained good momentum of development. Despite a noticeable slowdown in the world economy, China's economy grew fairly rapidly. China's GDP in 2001 reached 9.5933 trillion yuan, an increase of 7.3 percent over the previous year due to our continued stimulation of domestic demand and our unswerving implementation of a proactive fiscal policy and a stable monetary policy. Economic restructuring made headway. The structure of agricultural production was improved, and the production of high-quality and special-purpose crops increased. Information technology, biotechnology and other high-tech and new industries developed rapidly. Considerable progress was made in upgrading traditional industries and in eliminating outmoded production capacity. Notable achievements were made in infrastructure development, and a number of key projects were completed -- highways, railways, projects to reinforce the main dikes along major rivers, water control projects, and projects to upgrade rural power grids. The program for developing the western region was initiated successfully, and major projects including the Qinghai-Tibet Railway and the diversion of electricity from the western to the eastern regions were launched in succession. The quality of economic growth and the performance of the national economy improved. Total profits of large state-owned industrial enterprises and large non-state-owned industrial enterprises reached 465.7 billion yuan for the year, an increase of 8.1 percent over the previous year. Tax revenue increased by a large margin, and national revenue reached 1.6371 trillion yuan, increasing by 240 billion yuan in calculated terms. Financial operations were stable. The general price level rose by 0.7 percent. The total volume of imports and exports exceeded 500 billion U.S. dollars, with exports accounting for 266.2 billion U.S. dollars, a rise of 6.8 percent. Foreign direct investment totaled 46.8 billion U.S. dollars, up 14.9 percent. We enjoyed a favorable balance of international payment. Our national foreign exchange reserves reached 212.2 billion U.S. dollars at the end of 2001, 46.6 billion U.S. dollars more than at the end of the previous year. The exchange rates for the Renminbi remained stable.

The national economy maintained a sustained, rapid and sound development.

Economic restructuring was further deepened. Reform of state-owned enterprises continued. The establishment of a modern corporate system was accelerated. Boards of supervisors appointed by the state in key enterprises played an increasingly important role. Good progress was made in restructuring and reorganizing enterprises. A number of mines having exhausted their deposits and insolvent enterprises with little hope of recovery declared bankruptcy and closed. Achievements were made in the reform of the grain and cotton distribution systems. Pilot projects to improve the social security system in urban areas and to replace administrative charges with taxes in rural areas progressed smoothly. Reform of the basic medical insurance system for urban employees, the medical and public health systems, and the system for producing and distributing medicines progressed steadily. Administrative procedures for examination and approval were rectified and reduced. We achieved initial success in overhauling and regulating market order. We dealt powerful blows to criminals engaging in illegal economic activities by investigating and prosecuting over 1.2 million cases of producing and marketing fake and shoddy goods.

Science, technology, education and other social undertakings developed in an all-round way. Work was begun to implement projects under the March 1986 High-Tech Program for the Tenth Five-Year Plan period, the program for tackling key problems in science and technology and the program for basic research in key areas. Fresh efforts were directed to the development of a state scientific and technological innovation system. A number of major state projects for applying advances of high and new technologies in production were launched. Reform of the system for science and technology was deepened. Basic and vocational education was further strengthened. Efforts to improve quality-oriented education were promoted in a comprehensive manner. Schools of higher learning enrolled 2.68 million students, 480,000 more than in 2000. Smooth progress was made in the reform of the system for managing colleges and universities and in transferring their social services to the market economy. Protection of resources, environmental protection and ecological conservation were markedly strengthened. Good results were achieved in projects for reforesting formerly cultivated land and protecting natural forests. Pollution control in key river valleys and regions was strengthened, and the environmental quality improved in some cities. Our work to promote socialist spiritual civilization and improve democracy and the legal system proceeded. Fresh achievements were made in social sciences, art, literature, the press and publishing, radio, film and television, medicine and public health, family planning and sports. We saw improvement in communities in urban areas and in the lower-level governments in rural areas. Study activities concerning "The Three Represents" principle developed in depth in the countryside. Work with regard to ethnic groups, religions, and overseas Chinese was strengthened. Efforts were intensified to build a clean and honest government and fight corruption, yielding notable results. Initial results were achieved in the nationwide crackdown on crime, and as a result all facets of public security improved. Some Mafia-like gangs were crushed, and many who had committed grave crimes were punished in accordance with the law. New advances were made in modernizing national defense and the army.

Living standards of urban and rural residents continued to improve. The per capita disposable income increased by 8.5% in real terms for urban residents. Both the central and local governments greatly increased their expenditures on social security. Subsistence allowances for laid-off workers from state-owned enterprises and basic pensions for retirees were by and large paid in full and on time. The number of urban residents covered by the subsistence allowance system increased from over four million at the beginning of the year to more than 11.2 million at the end of the year. The government raised the salaries of employees of administrative departments and institutions and the old-age pensions for their retirees, and the basic old-age pensions for retirees from enterprises were also raised. To cover these items, an extra 62.1 billion yuan was allocated from the state revenue alone. The per capita net income for farmers increased by 4.2% in real terms. The financial burden on farmers was reduced due to the upgrading of rural power grids and the readjustment of prices for electricity consumed in the countryside. Business in both urban and rural markets was brisk, and conditions of housing and transportation for residents were further improved.

Last year, we celebrated the 80th anniversary of the founding of the Communist Party of China. In an important speech on July 1,Jiang Zemin, General Secretary of the CPC Central Committee, elaborated on the scientific connotation of "The Three Represents" principle and its great importance. The Sixth Plenary Session of the Fifteenth Party Central Committee adopted an important decision on strengthening and improving the Party's style of work. Beijing won the right to host the 2008 Olympic Games. China successfully played host to the Ninth APEC Economic Leaders Meeting and other important international meetings. Due to consistent efforts made over a long period of time, China became a full member of the World Trade Organization (WTO). These events have exerted a great and far-reaching influence on the development of the cause undertaken by our Party and state, and they have tremendously inspired the patriotic enthusiasm of the Chinese people of all ethnic groups, enhanced their national pride and increased the cohesiveness of the Chinese nation.

The remarkable achievements in China's economic and social development in 2001 were hard won. They are attributable to the correct policy decisions and timely measures taken by the CPC Central Committee with Comrade Jiang Zemin at the core on the basis of a firm grasp of the overall situation and sound assessment of its changes, and also to the determined and concerted efforts of our people of all ethnic groups. On behalf of the State Council, I would like to pay our highest respects to workers, farmers, intellectuals and cadres; to officers and men of the People's Liberation Army, the armed police and the public security police; as well as to people from all walks of life. You have all been working hard in your own fields of endeavor. I also wish to express our sincere thanks to our compatriots in the Hong Kong Special Administrative Region, Macao Special Administrative Region, Taiwan, as well as overseas Chinese who have shown their concern and support for the development and reunification of the country.

However, we are clearly aware that there are still many problems demanding prompt solution in our economic and social life. The principal problems are as follows: farmers' incomes are growing slowly; incomes for farmers in some major grain producing areas and disaster-afflicted areas are decreasing; in some places, wage arrears are now a serious problem; some enterprises are still having difficulties in production and the life of some workers remains hard; and employment pressures are increasing. Industrial structure remains irrational and deep-seated problems in our economic system have not been solved. Problems of the ecological environment are outstanding. Local protectionism remains a problem despite repeated orders to ban it, and the order of the market economy is yet to be fully rectified. In some localities and government departments and among some leading cadres, formalism and bureaucracy are rife, deception, extravagance and waste are serious problems, and corruption is relatively conspicuous. There are cases of work units misappropriating budgetary funds or special funds in disregard of the relevant rules and regulations. Failure to abide by the law in handling affairs and laxity in law enforcement are common occurrences. Grave worksite accidents frequently occur. Public security order is poor in some places. Some of these problems have remained unsolved for many years, and there are also some that are caused by shortcomings and errors in our work. We must attach great importance to these problems and take effective measures to solve them. (More)

(Xinhua News Agency March 16, 2002)