Jiang made the remark in his report to the 16th National Congress of the Communist Party of China (CPC) which opened in Beijing Friday morning.

He said that in line with the requirements of liberating and developing the productive forces, it is a must to uphold and improve the basic economic system, with public ownership playing a dominant role and diverse forms of ownership developing side by side.

It is necessary to consolidate and develop unswervingly the public sector of the economy while firmly encouraging, supporting and guiding the development of non-public sectors, Jiang said.

He said that the country must stimulate the development of the non-public sectors while keeping the public sector as the dominant player, incorporating both into the process of the socialist modernization drive instead of setting them against each other.

"All sectors of the economy can very well display their respective advantages in market competition and stimulate one another for common development," he added.

Jiang listed continuing to adjust the distribution and structure of the state sector and reform the state property management system as a major task for deepening economic restructuring.

The country should give full play to the initiative of both the central and local authorities on the precondition of upholding state ownership and should make laws and regulations and establish a state property management system under which the Central Government and local governments perform the responsibilities of investors on behalf of the state respectively, enjoying owner's equity, combining rights with obligations and duties and administering assets, personnel and other affairs, he said.

It is necessary to deepen the reform of state-owned enterprises and further explore diverse forms for effectively realizing public ownership, especially state ownership, he said.

"We should promote institutional, technological and managerial innovations in enterprises," Jiang said.

He also said the country must give full scope to the important roles of the self-employed, the private businesses and other non-public sectors of the economy in stimulating economic growth, creating more jobs and activating the market.

(Xinhua News Agency November 8, 2002)