In the report entitled "Build a well-off society in an all-round way and create a new situation in building socialism with Chinese characteristics", Jiang defined the theme of the congress as "to hold high the great banner of Deng Xiaoping Theory, fully act on the important thought of Three Represents, carry forward our cause into the future, keep pace with the times, build a well-off society in an all-round way, speed up socialist modernization and work hard to create a new situation in building socialism with Chinese characteristics".

The ongoing meeting is the first of its kind held by the Party in the new century, Jiang said, stressing that it is a very important one convened by the Party in the new situation in which the country has begun to take the third step of the strategic plan for socialist modernization.

Jiang said that China has started a new phase of development for building a well-off society in an all-round way and speeding up socialist modernization, and that the international situation is undergoing profound changes. "Given this pressing situation, we must move forward, or we will fall behind," he said.

Jiang called on the Party to stand firm in the forefront of the times and unite with and lead the Chinese people of all ethnic groups in accomplishing the three major historical tasks: to propel the modernization drive, to achieve national reunification and to safeguard world peace and promote common development, and in bringing about the great rejuvenation of the Chinese nation on its road to socialism with Chinese characteristics.

China has attained tremendous achievements in various fields over the past five years, Jiang Zemin said in his report.

"We have traversed an extraordinary course and scored tremendous achievements in reform, development and stability, domestic and foreign affairs and national defense and in running the Party, state and army," he said.

The five years since the CPC 15th National Congress, Jiang said, have been a period in which China has held high the great banner of Deng Xiaoping Theory and kept blazing new trails in a pioneering spirit, and a period in which the country has continued to forge ahead triumphantly on the road to socialism with Chinese characteristics in spite of difficulties and risks.

During the period, Jiang said, the national economy has maintained a sustained, rapid and sound development, the reform and opening up have yielded substantial results, notable progress has been registered in improving socialist democracy and spiritual civilization, new strides have been taken in strengthening national defense and army building, the people have reached to a well-off standard of living on the whole, fresh progress has been made in the great cause of national reunification, and new prospects have been opened up in the external work.

Jiang said that Party building has been strengthened in an all-round way over the five years.

"All the Party members have steadily intensified their study of Deng Xiaoping Theory. We have put forward and expounded the important thought of Three Represents," he said.

Good results have been produced in the intensive education in the need to stress study, political awareness and integrity and in the study of Three Represents, Jiang said.

An all-out endeavor has been made to build up the Party ideologically, organizationally and in work style, he said, adding that the endeavor to build a clean and honest government and combat corruption has been going on in depth and yielding fresh notable results.

"Facts prove that the major policy decisions taken by the Central Committee at and since the 15th National Congress are correct and accord with the fundamental interests of the overwhelming majority of the people," Jiang said.

Meanwhile, Jiang indicated that there are still quite a few difficulties and problems in the country.

"We must pay close attention to these problems and continue to take effective measures to solve them," Jiang said.

The Communist Party of China (CPC) has obtained most valuable experience in building socialism and the Party over the past 13 years, when it scored major historic achievements, Jiang Zemin said in his report.

"The practice of the 13 years has helped us acquire a deeper understanding of what socialism is, how to build it, and what kind of Party to build and how to build it, and we have gained most valuable experience in this regard," he said.

Jiang reviewed the work of the Party and people and their great achievements since China initiated reform and opening up policies, especially since the Fourth Plenary Session of the 13th CPC Central Committee in 1989.

China has responded confidently to a series of unexpected international events bearing on the country's sovereignty and security and surmounted difficulties and risks arising from the political and economic spheres and from nature, he said.

"We have gone through one trial after another and removed all kinds of obstacles, thus ensuring that our reform, opening up and modernization drive have been forging ahead in the correct direction like a ship braving surging waves," Jiang said.

As is universally recognized, he said, the 13 years have been a period in which China's overall national strength has risen by a big margin, the people have received more tangible benefits than ever before, the country has enjoyed long-term social stability and solidarity and had a good government and a united people, its influence in the world has grown notably, and the cohesion of the nation has increased remarkably.

Jiang defined the experience over the 13 years as follows:

-- Uphold Deng Xiaoping Theory as our guide and constantly bring forth theoretical innovation;

-- Keep economic development as the central task and solve problems cropping up on our way forward through development;

-- Persevere in reform and opening up and keep improving the socialist market economy;

-- Adhere to the Four Cardinal Principles and develop socialist democracy;

-- Attach equal importance to both material and spiritual civilization and run the country by combining the rule of law with the rule of virtue;

-- Ensure stability as a principle of overriding importance and balance reform, development and stability;

-- Persevere in the Party's absolute leadership over the army and take the road of fewer but better troops with Chinese characteristics;

-- Continue to unite with all forces that can be united with and increase the cohesion of the Chinese nation;

-- Pursue the independent foreign policy of peace, safeguard world peace and promote common development;

-- Strengthen and improve the Party's leadership and propel the new great project of Party building.

The experience, Jiang said, can be summarized as follows: "Our Party must always represent the development trend of China's advanced productive forces, the orientation of China's advanced culture and the fundamental interests of the overwhelming majority of the Chinese people".

Jiang Zemin said in his report that the persistent implementation of the important thought of Three Represents "is the foundation for building our Party, the cornerstone for its governance and the source of its strengthen."

He calls on all Party members to be keenly aware of this basic requirement, become more conscious and determined in implementing this important thought in an all-round way.

Jiang said that to carry out the important thought of Three Represents, the whole Party must maintain the spirit of keeping pace with the times and blaze new trails for the development of the Marxist theory.

"Keeping pace with the times means that all the theory and work of the Party must conform to the times, follow the law of development and display great creativity. Whether we can persist in doing this bears on the future and destiny of the Party and state," he said.

"Bringing forth new ideas in institutions, science and technology, culture and other fields through theoretical innovation, exploring the way forward in practice, never becoming conceited and never slackening our effort -- these are the ways to run the Party and state, which we should follow for a long time to come," he said.

Jiang stressed that to carry out the important thought of Three Represents, it is essential for the Party to give top priority to development in governing and rejuvenating the country and open up new prospects for the modernization drive.

In China, a large developing country with a backward economy and culture, where our Party is leading the people in the modernization drive, a good solution to the problem of development has a direct bearing on the trend of popular sentiment and the success of the Party's cause, he said.

Jiang said that to carry out the important thought of Three Represents, it is essential to bring all positive factors into full play and bring new forces to the great cause of rejuvenating the Chinese nation.

"We should unite with the people of all social strata who help to make the motherland prosperous and strong, encouraging their pioneering spirit, protecting their legitimate rights and interests and commending the outstanding ones in an effort to create a situation in which all people are well positioned, do their best and live in harmony."

Jiang said that to carry out the important thought of Three Represents, it is essential to push forward Party building in a spirit of reform and instill new vitality in the Party. Party members must integrate adherence to the basic tenets of Marxism with efforts for theoretical innovation, maintenance of the fine tradition of the Party with promotion of the spirit of the times, and consolidation of the Party's class base with expansion of its mass base so that the Party serves as a strong core of leadership that is consolidated ideologically, politically and organizationally and always stands in the forefront of the times leading the people forward in solidarity, he said.

Jiang stressed that the important thought of Three Represents is always in a process of development and progress. The whole Party must continue to emancipate the mind, come up with new ideas in respect of theory and create something new in practice. It must carry out the important thought of Three Represents in all endeavors of the socialist modernization drive and in all aspects of Party building so that it always advances with the times and shares weal and woe with the people.

All Legitimate Income Should Be Protected

All investors at home or from overseas should be encouraged to carry out business activities in China's development and all legitimate income, from work or not, should be protected, said Jiang Zemin in his report.

"To carry out the important thought of Three Represents, it is essential to bring all positive factors into full play and bring new forces to the great cause of rejuvenating the Chinese nation," Jiang said.

"It is improper to judge whether people are politically progressive or backward simply by whether they own property or how much property they own, but rather, we should judge them mainly by their political awareness, state of mind and performance," he said.

It is necessary to foster notions and form a business mechanism in conformity with the basic economic system in the primary stage of socialism and create a social environment in which people are encouraged to achieve something and helped to make a success of their career, so as to unleash all the vitality contained in work, knowledge, technology, management and capital and give full play to all sources of social wealth for the benefit of the people, he said.

Jiang pointed out that with the deepening of reform and opening up and economic and cultural development, the working class in China has expanded steadily and its quality improved.

Emerging in the process of social changes, entrepreneurs and technical personnel employed by non-public scientific and technological enterprises, managerial and technical staff employed by overseas-funded enterprises, the self-employed, private entrepreneurs, employees in intermediaries, free-lance professionals and members of other social strata are all builders of socialism with Chinese characteristics.

"We should unite with the people of all social strata who help to make the motherland prosperous and strong, encouraging their pioneering spirit, protecting their legitimate rights and interests and commending the outstanding ones," Jiang said.

China will strive to quadruple its gross domestic product (GDP) of 2000 by the year 2020, and the country's overall national strength and international competitiveness will increase markedly, Jiang Zemin said.

This is one of the objectives of building a well-off society in an all-round way expounded by Jiang Zemin in his report.

China succeeded in quadrupling its GDP during the last two decades of the 20th century.

Jiang said in the report that China will concentrate on building a well-off society of a higher standard in an all-round way to the benefit of well over one billion people.

"We will further develop the economy, improve democracy, advance science and education, enrich culture, foster social harmony and upgrade the texture of life for the people," he said.

The two decades of development will serve as an inevitable connecting link for attainting third-step strategic objectives for China's modernization drive as well as a key stage for improving the socialist market economy and opening wider to the outside world, Jiang said.

Building on what is achieved at this stage and continuing to work for several more decades, China will have in the main accomplished the modernization program and turned China into a strong, prosperous, democratic and culturally advanced socialist country by the middle of this century.

Jiang said that on the basis of an optimized structure and better economic returns, China will in the main achieve industrialization and establish a full-fledged socialist market economy and a more open and viable economic system.

The proportion of urban population will go up considerably and the trend of widening differences between industry and agriculture, between urban and rural areas and between regions will be reversed step by step.

"We will have a fairly sound social security system," Jiang said. "There will be a higher rate of employment. People will have more family property and lead a more prosperous life."

The second objective of building a well-off society is that socialist democracy and the legal system will be further improved. The basic principle of ruling the country by law will be fully implemented. People's political, economic and cultural rights and interests will be respected and guaranteed in real earnest. Democracy at the grassroots level will be better practiced. People will enjoy a sound public order and live and work in peace and contentment.

The third objective is that people's ideological and ethical standards, scientific and cultural qualities, and their health will be enhanced notably. A sound national educational system, scientific, technological and cultural innovation systems as well as nationwide fitness and medical and health systems will take shape. People will have access to better education.

"We will make senior secondary education basically universal in the country and eliminate illiteracy. A learning society in which all people will learn or even pursue life-long education will emerge to boost their all-round development," Jiang said.

The fourth objective is that the capability of sustainable development will be steadily enhanced. The ecological environment will be improved. The efficiency of using resources will be increased significantly.

"We will enhance harmony between man and nature to push the whole society onto a path of civilized development featuring the growth of production, an affluent life and a sound ecosystem," he said.

In order to attain these objectives, it is imperative to come up with new ideas for development, make new breakthroughs in reform, break new ground in opening up and take new moves in all fields of endeavor, he said.

All localities and departments must proceed from their actual conditions and take effective measures to attain the objectives. Places where conditions permit may develop faster and take the lead in accomplishing modernization on the basis of building a well-off society in an all-round way, Jiang Zemin said.

Main Economic Tasks for China

Jiang Zemin in his report outlined the main tasks for China's economic development and reform in the first two decades of this century.

The tasks are to improve the socialist market economy, promote strategic adjustment of the economic structure, basically accomplish industrialization, energetically apply IT, accelerate modernization, maintain a sustained, rapid and sound development of the national economy and steadily uplift the people's living standards.

Jiang said that to fulfill the tasks, China must take a new road to industrialization and implement the strategy of rejuvenating the country through science and education and that of sustainable development.

It is necessary to persist in using IT to propel industrialization, which will, in turn, stimulate IT application, blazing a new trail to industrialization featuring high scientific and technological content, good economic returns, low resources consumption, little environmental pollution and a full display of advantages in human resources, he said.

The country must press ahead to bring about an industrial pattern with high and new technology industries as the leader, basic and manufacturing industries as the kingpin and the service industry developing in all areas, Jiang said.

"We must give play to the important role of science and technology as the primary productive force and pay close attention to improving the quality and efficiency of economic growth by relying on scientific and technological progress and raising the qualities of labor force," he said.

Top priority must be given to sustainable development, Jiang said, stressing adherence to the basic state policies of family planning and environmental protection.

Jiang called for efforts to make the rural economy flourish and speed up urbanization, saying the county must strengthen the position of agriculture as the foundation of the economy, carry on the restructuring of agriculture and the rural economy, protect and raise the comprehensive grain production capacity and improve the competitiveness of agriculture in the market.

It is essential to persist in the coordinated development of large, medium and small cities and small towns along the path to urbanization with Chinese characteristics, he said.

Jiang said China must stick to the basic rural policies of the Party and keep stabilizing and improving the two-tier management system that integrates unified with separate management on the basis of household contract management.

"We must continue with the reform in tax and fee in rural areas to lighten the burdens of farmers and protect their interests," he added.

When talking about the development of the western region and the coordinated development of regional economies, Jiang said that to lay a solid foundation and go ahead in a down-to-earth manner, China must give priority to infrastructure and ecological environment improvement and strive for breakthroughs in a decade.

"The state should provide the western region with greater support in such areas as investment projects, tax policies and transfer payments," he said.

The central region should redouble its efforts toward structural adjustment and cultivate new economic growth points, while the eastern region should quicken the pace of upgrading its industrial structure, and further develop the outward-looking economy, he said.

"The eastern, central and western regions should strengthen economic exchanges and cooperation to complement one another and secure common development," Jiang added.

In line with the requirements of releasing and developing the productive forces, Jiang said, China must uphold and improve the basic economic system, with public ownership playing a dominant role and diverse forms of ownership developing side by side.

"We must unswervingly consolidate and develop the public sector of the economy and also encourage, support and guide the development of the non-public sectors of the economy," he said, stressing 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.

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.

Jiang said that measures should be taken to give a fuller play to the basic role of the market in the allocation of resources and create an environment for the equal use of production factors by market players and promote free movement of commodities and production factors on markets around the country.

"We must improve the government functions of economic regulation, market supervision, social administration and public services," he said.

Jiang said it is essential to deepen the reform of the distribution system and improve the social security system, indicating that China should establish the principle that labor, capital, technology, managerial expertise and other production factors participate in the distribution of income in accordance with their contributions, thereby improving the system under which distribution according to work is dominant and a variety of modes of distribution coexist.

Efforts should be made to improve the basic old-age pension and medical insurance systems for urban workers, and the systems of unemployment insurance and subsistence allowances for urban residents, he said.

In response to the new situation of economic globalization and China's entry into the WTO, the nation should take part in international economic and technological cooperation and competition on a broader scale, in more spheres and on a higher level, make the best use of both international and domestic markets, optimize the allocation of resource, expand the pace for development and accelerate reform and development by opening up, he said.

Jiang said China should do everything possible to create more jobs and improve the people's lives.

It is the long-term strategy and policy of the state to expand employment. Party committees and governments at all levels must take it as their major obligation to improve business environment and create more jobs, he said.

The country should introduce flexible and diverse forms of employment and encourage people to find jobs on their own or become self-employed, he said.

"The fundamental goal of economic development is to uplift the living standards and quality of life of the people," Jiang said. "As the economy develops, we should increase the income of urban and rural residents to meet their multifarious material and cultural needs."

Public, Non-public Sectors Not to Be Set Against Each Other

Jiang Zemin said that the public sector and non-public sectors of the economy should not be set against each other and that they can very well develop side by side.

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.

Further Reform of Income Distribution System

China should establish the principle that labor, capital, technology, managerial expertise and other production factors participate in the distribution of income in accordance with their contributions, thereby improving the system under which distribution according to work is dominant and a variety of modes of distribution coexist, Jiang Zemin said in his report.

"Rationalizing the relations of distribution bears on the immediate interests of the general public and the display of their initiative," Jiang said.

"We should give priority to efficiency with due consideration to fairness, earnestly implementing the distribution policy while advocating the spirit of devotion, and guarding against an excessive disparity in income while opposing equalitarianism," Jiang said.

"Bearing in mind the objective of common prosperity, we should try to raise the proportion of the middle-income group and increase the income of the low-income group," he added.

Jiang said that China should improve the basic old-age pension and medical insurance systems for urban workers and the systems of unemployment insurance and subsistence allowances for urban residents.

Doing Better Job in Opening-up

China should do a better job in opening up by "bringing in" and "going out", Jiang Zemin said in his report.

In response to the new situation of economic globalization and China's entry into the WTO, China should take part in international economic and technological cooperation and competition on a broader scale, in more spheres and on a higher level, make the best use of both international and domestic markets, optimize the allocation of resources, expand the space for development and accelerate reform and development by opening up, he said.

China should implement the strategy of market diversification, bring into play its comparative advantages and strive to increase exports by ensuring good quality, he added.

"We should attract more foreign direct investment and use it more effectively," Jiang said.

He also said that it is necessary to encourage and help relatively competitive Chinese enterprises with various forms of ownership to invest abroad in order to form a number of strong multinational enterprises.

Jiang Zemin said in his report that as an important goal for building a well-off society in an all-round way, the Chinese Communist Party must go on steadily and surely with political restructuring, extend socialist democracy and improve the socialist legal system in order to build a socialist country under the rule of law and consolidate and develop the political situation characterized by democracy, solidarity, liveliness, stability and harmony.

"Developing socialist democracy and establishing a socialist political civilization are an important goal for building a well-off society in an all-round way," he said.

Jiang said that the key to developing socialist democracy is to combine the need to uphold leadership by the Party and to ensure that the people are the masters of the country with the need to rule the country by law. Leadership by the Party is the fundamental guarantee that the people are the masters of the country and that the country is ruled by law. The people being the masters of the country constitutes the essential requirement of socialist democracy. Ruling the country by law is the basic principle the Party pursues while it leads the people in running the country.

The Constitution and other laws embody the unity of the Party's views and the people's will. No organizations or individuals are allowed to have the privilege to overstep the Constitution and other laws, Jiang said.

According to Jiang, the main tasks of political development and restructuring include: upholding and improving the systems of socialist democracy; improving the socialist legal system; reforming and improving the Party's style of leadership and governance; reforming and improving the decision-making mechanism; deepening administrative restructuring; promoting the reform of the judicial system; deepening the reform of the cadre and personnel system; tightening the restraint on and supervision over the use of power.

"It is essential to expand citizens' participation in political affairs in an orderly way, and ensure that the people go in for democratic elections and decision-making, exercise democratic management and supervision according to law and enjoy extensive rights and freedoms, and that human rights are respected and guaranteed," he said.

China should uphold and improve the system of people's congresses and ensure that their legislation and policy decisions better embody the people's will, he said. We will fully implement the Party's policy toward ethnic minorities, uphold and improve the system of regional ethnic autonomy, implement the Party's policy toward the freedom of religious belief, Jiang said.

He pointed out that all citizens must see to it that there are laws to go by, the laws are observed and strictly enforced, and law-breakers are prosecuted. China will strengthen legislation and improve its quality and will have formulated a socialist system of laws with Chinese characteristics by the year 2010.

China will further change the functions of the government and improve the methods of management so as to form an administrative system featuring standardized behaviors, coordinated operation, fairness and transparency, honesty and high efficiency, Jiang said.

CPC to Standardize Relations with Legislature, Government

Jiang Zemin said that the Chinese Communist Party (CPC) will "standardize" Party committees' relations with people's congresses, governments, people's political consultative conference committees and mass organizations.

Reforming and improving the Party's style of leadership and governance is "a matter of overall significance to improving socialist democracy," he said.

According to Jiang, acting on the principle that the Party commands the overall situation and coordinates the efforts of all quarters, the Party will standardize Party committee's relations with people's congresses, governments, people's political consultative conference committees and mass organizations:

-- supporting people's congresses in performing their functions as organs of state power according to law, in ensuring that the Party's views become the will of the state and that candidates recommended by Party organizations become leading cadres of the organs of state power through legal procedures, and in exercising supervision over them.

-- supporting the government in fulfilling its legal functions and performing its official duties according to law.

-- supporting people's political consultative conference committees in performing their functions by centering on the two major subjects of unity and democracy.

-- strengthening the Party's leadership over trade unions, the Communist Youth League organizations, women's federations and other mass organizations and supporting them in working according to law and their own constitutions and acting as a bridge between the Party and the people.

Major efforts should be made to develop socialist culture and spiritual civilization while building a well-off society in an all-round way in China, Jiang Zemin said in his report.

He said that measures should be taken to keep the orientation of advanced culture firmly in hand.

"We must uphold Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping Theory as our guide in the realm of ideology and have the important thought of Three Represents in command of the development of socialist culture", he said.

"Basing ourselves on the practice of reform, opening up and modernization and keeping abreast of the latest developments in world culture, we must make innovations in content and form so as to enhance the attraction and appeal of socialist culture with Chinese characteristics," he added.

Jiang said that efforts are to be made to continue to carry forward and cultivate the national spirit.

For more than 5,000 years, the Chinese nation has evolved a great national spirit centering on patriotism and featuring unity and solidarity, love of peace, industry, courage and ceaseless self-improvement, he said, stressing that confronted with interaction of different thoughts and cultures in the world, it is a crucial task in the cultural development to carry forward and cultivate the national spirit and incorporate it into the national education and the entire process of building spiritual civilization so that the entire people are always filled with an enterprising spirit.

Jiang called for the promotion of ideological and ethical progress, saying that ruling the country by law and ruling the country by virtue complement each other.

It is necessary to establish a socialist ideological and ethical system compatible with the socialist market economy and the socialist legal system and consistent with the traditional virtues of the Chinese nation, he said.

"We must intensify education in social and professional ethics and family virtues and especially intensify the ideological and ethical improvement among youth," Jiang added.

Jiang also stressed the development of education and science, saying that education is the foundation for scientific and technological advancement and personnel training.

"Playing a vanguard role and having an overall bearing on the modernization drive, education must be placed on our development agenda as a strategic priority," he said.

Jiang said that it is a must to encourage innovation in education, deepen its reform, promote quality-oriented education to cultivate hundreds of millions of high-quality workers, tens of millions of specialized personnel and a great number of top-notch innovative personnel.

Development of infrastructure for research should be stepped up, while efforts being made to disseminate science and promote the scientific spirit, Jiang said, indicating that it is essential to create an atmosphere in society at large favorable for respecting and promoting science, encouraging innovation and opposing superstition and pseudo-science.

Jiang said the state supports and protects public cultural undertakings and encourages them to enhance their vigor for self-development.

"It is essential to improve policies toward the cultural industry, support its development and enhance its overall strength and competitiveness," he said. Jiang said that the country should deepen the internal reform of cultural enterprises and institutions and gradually establish a management system and operational mechanism favorable to arousing the initiative of cultural workers, encouraging innovation and bringing forth more top-notch works and more outstanding personnel.

Jiang Zemin said in his report that China will uphold the principle of coordinated development of national defense and the economy and push forward the modernization of national defense and the army on the basis of economic growth.

The army must take Mao Zedong's military thinking and Deng Xiaoping's thinking on army building in the new period as the guide to action and fully implement the important thought of Three Represents, he said.

It must persist in taking the road of fewer but better troops with Chinese characteristics and become more revolutionary, modernized and regularized in compliance with the general requirements of being qualified politically and competent militarily and having a fine style of work, strict discipline and adequate logistic support, he said.

"There must be no wavering in upholding the fundamental principle and system that the Party leads the people's army," Jiang said.

The army must implement the military strategic principle of active defense and raise its defense capabilities and combat effectiveness under high-tech conditions, he said, adding that in response to the trend of military changes in the world, it must carry out the strategy of building a strong army through science and technology.

Efforts should be made to accomplish the historical tasks of mechanization and IT application, thereby bringing about leapfrog development in the modernization of the army, Jiang said.

Party organizations and governments at all levels and the people should be concerned with and support the building of national defense and the army, and the army should support and take an active part in national construction, Jiang said.

CPC to Render Full Support to Chief Executives of Hong Kong, Macao SARs

The Chinese Communist Party (CPC) will render full support to the chief executives and governments of the Special Administrative Regions of Hong Kong and Macao, Jiang Zemin said in his report.

He said that the return of Hong Kong and Macao to the motherland has enriched the concept of "one country, two systems" in both theory and practice.

"Facts prove that 'one country, two systems' is a correct policy and has strong vitality," Jiang said, stressing that "we will resolutely implement this policy and act in strict accordance with the basic laws of Hong Kong and Macao special administrative regions."

"We will render full support to the chief executives and governments of the two regions in their work and unite with people from all walks of life there in a joint effort to maintain and promote the prosperity, stability and development of Hong Kong and Macao," Jiang said.

All Cross-Straits Issues Can Be Discussed Under One-China Principle

Jiang Zemin said that all issues concerning the question of Taiwan can be discussed on the premise of one-China principle.

Jiang Zemin appealed to the Taiwan authorities that "on the basis of the one-China principle, let us shelve for now certain political disputes and resume the cross-Straits dialogue and negotiations as soon as possible."

"We may discuss how to end the cross-Straits hostility formally. We may also discuss the international space in which the Taiwan region may conduct economic, cultural and social activities compatible with its status, or discuss the political status of the Taiwan authorities or other issues," Jiang said.

Adherence to the one-China principle is the basis for the development of cross-Straits relations and the realization of peaceful reunification, Jiang said.

"There is but one China in the world, and both the mainland and Taiwan belong to one China. China's sovereignty and territorial integrity brook no division," he said.

Jiang expressed firm opposition to all words and deeds aimed at creating "Taiwan independence," "two Chinas" or "one China, one Taiwan," pointing out that the future of Taiwan lies in the reunification of the motherland.

"We are willing to exchange views with all political parties and personages of all circles in Taiwan on the development of cross-Straits relations and the promotion of peaceful reunification, and we place our hopes on the people in Taiwan for the settlement of the Taiwan question and the realization of the complete reunification of China," he said.

"We fully respect their life style and their wish to be the masters of our country," Jiang said. The two sides should expand mutual contacts and exchanges and work together to carry forward the fine tradition of the Chinese culture. As the direct links of mail, air and shipping services, and trade across the Taiwan Straits serve the common interests of the compatriots on both sides, there is every reason to take practical and positive steps to promote such direct links and open up new prospects for cross-Straits economic cooperation.

Jiang pointed out that "one country, two systems" is the best way for the reunification between the two sides. After its reunification with the mainland, Taiwan may keep its existing social system unchanged and enjoy a high degree of autonomy.

"Our Taiwan compatriots may keep their way of life unchanged, and their vital interests will be fully guaranteed, and they will enjoy a lasting peace," Jiang promised.

Taiwan may then truly rely on the mainland as its hinterland for economic growth and thus get broad space for development, and the Taiwan compatriots may join the people on the mainland in exercising the right to administer the country and sharing the dignity and honor of the great motherland in the international community, Jiang said.

"The 23 million Taiwan compatriots are our brothers and sisters of the same blood, for which no one is more eager than we are to resolve the Taiwan question through peaceful means," Jiang said.

He vowed to continue to implement the basic principles of "peaceful reunification" and "one country, two systems" and act on the eight-point proposal on developing cross-Straits relations and advancing the process of peaceful national reunification at the present stage.

"We will work in utmost sincerity and do all we can to strive for a peaceful reunification," he said.

"Our position of never undertaking to renounce the use of force is not directed at our Taiwan compatriots, but aimed at the foreign forces' attempts to interfere in China's reunification and the Taiwan separatist forces' schemes for 'Taiwan independence'," Jiang said.

"We Chinese people will safeguard our state sovereignty and territorial integrity with firm resolve, and will never allow anyone to separate Taiwan from China in any way," Jiang said.

China will be reunified, and the Chinese nation will be rejuvenated, he said, pointing out that the Taiwan question must not be allowed to drag on indefinitely.

"We are convinced that with the concerted efforts of all sons and daughters of the Chinese nation, the complete reunification of the motherland will be achieved at an early date," he said.

Jiang outlined China's key foreign policies in his report.

Jiang Zemin said that China will, as always, pursue the independent foreign policy of peace under the current international situation where peace and development remain the themes of our era, while the old international political and economic order, which is unfair and irrational, has yet to be changed fundamentally.

He said that China stands for establishing a new international political and economic order that is fair and rational, maintaining the diversity of the world and are in favor of promoting democracy in international relations and diversifying development models, and fighting against terrorism of all forms.

He said that to preserve peace and promote development bears on the well-being of all nations and represents a common aspiration of all peoples. The growing trends toward world multipolarization and economic globalization have brought with them opportunities and favorable conditions for world peace and development.

However, Jiang pointed out that the old international political and economic order, which is unfair and irrational, has yet to be changed fundamentally. Uncertainties affecting peace and development are on the rise. The scourge of terrorism is more acutely felt. Hegemonism and power politics have new manifestations. Local conflicts triggered by ethnic or religious contradictions and border or territorial disputes have cropped up from time to time. The North-South gap is widening. The world is far from being tranquil and mankind is faced with many grave challenges.

"No matter how the international situation changes, we will, as always, pursue the independent foreign policy of peace," Jiang stressed, adding that the purpose of China's foreign policy is to maintain world peace and promote common development. We are ready to work with all nations to advance the lofty cause of world peace and development.

"We stand for establishing a new international political and economic order that is fair and rational," Jiang said, noting that politically all countries should respect and consult one another and should not seek to impose their will on others; economically they should complement one another and pursue common development and should not create a polarization of wealth; culturally they should learn from one another and work for common prosperity and should not exclude cultures of other nations; and in the area of security, countries should trust one another and work together to maintain security, and settle their disputes through dialogue and cooperation and should not resort to the use or threat of force.

The Party opposes all forms of hegemonism and power politics and China will never seek hegemony and never go in for expansion, Jiang said.

"We stand for maintaining the diversity of the world and are in favor of promoting democracy in international relations and diversifying development models," he said, noting that countries having different civilizations and social systems and taking different roads to development should respect one another and draw upon one another's strong points through competition and comparison and should develop side by side by seeking common ground while shelving differences.

"The affairs of each country should be left to the people of that country to decide, while the world affairs should be determined by all countries concerned through consultations on the basis of equality," Jiang said.

"We stand for fighting against terrorism of all forms," Jiang said, stressing that it is imperative to strengthen international cooperation in this regard, address both the symptoms and root causes of terrorism, prevent and combat terrorist activities and work hard to eliminate terrorism at root.

On China's bilateral relations and ties with international communities, Jiang said:

-- China will continue to improve and develop relations with the developed countries. Proceeding from the fundamental interests of the people of all countries concerned, we will broaden the converging points of common interests and properly settle differences on the basis of the Five Principles of Peaceful Coexistence.

-- China will continue to cement its friendly ties with the neighbors and step up regional cooperation.

-- China will continue to enhance solidarity and cooperation with other third world countries, increase mutual understanding and trust and strengthen mutual help and support.

-- China will continue to take an active part in multilateral diplomatic activities and play our role in the United Nations and other international or regional organizations. China will support other developing countries in their efforts to safeguard their legitimate rights and interests.

-- The CPC will continue to develop exchanges and cooperation with political parties and organizations of all countries and regions on the principles of independence, complete equality, mutual respect and noninterference in each other's internal affairs.

-- China will continue to carry out extensive people-to-people diplomacy, expand cultural exchanges with the outside world, enhance the friendship between peoples and propel the development of state-to-state relations.

Jiang Zemin in his report said that the Party must spare no efforts to strengthen and improve the Party's leadership and fully advance the great new undertaking of Party building.

"To strengthen and improve Party building, we must hold high the great banner of Deng Xiaoping Theory, implement the important thought of Three Represents in a comprehensive way," he said.

The Party should also strive to ensure that the Party is forever the vanguard both of the Chinese working class and of the Chinese people and the Chinese nation as well as the core of leadership in building socialism with Chinese characteristics and that it always represents the development trend of China's advanced productive forces, the orientation of China's advanced culture and the fundamental interests of the overwhelming majority of the Chinese people, Jiang said.

Jiang said the main tasks of strengthening and improving Party building are "to study and implement the important thought of Three Represents intensively and raise all Party members' level of the Marxist theory; to build up the Party's governing capacity and improve its art of leadership and governance; to adhere to and improve democratic centralism and enhance the Party's vitality, solidarity and unity; to build a contingent of high-caliber leading cadres and form an energetic and promising leadership; to build the Party well at the primary level, reinforce its class foundation and expand its mass base; and to strengthen and improve the Party's style of work and intensify the struggle against corruption."

"We must continue to arm all Party members with Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping Theory and usher in a new upsurge in the study and implementation of the important thought of Three Represents," he said.

Faced with profound changes in the conditions of governance and social environment, Party committees and leading cadres at all levels must acquire new knowledge and accumulate new experience, build up the Party's governing capacity, according to Jiang.

Democratic centralism is a system that integrates centralism on the basis of democracy with democracy under centralized guidance, Jiang said, adding that inner-Party democracy is the life of the Party and plays an important exemplary and leading role in people's democracy.

"We should establish and improve an inner-Party democratic system that fully reflects the will of Party members and organizations, starting with the reform of the relevant systems and mechanisms on the basis of guaranteeing the democratic rights of Party members and giving priority to improving the systems of Party congresses and of Party committees," he said.

The centralization and unity of the Party and state, Jiang pointed out, are where the fundamental interests of the people of all ethnic groups lie.

"The whole Party and the entire nation must maintain a high degree of unity with regard to the guiding ideology, line, principles and policies and major questions of principle," he said. 　　

Jiang said that it is a matter of vital importance for maintaining prolonged stability of the Party and state to build a contingent of high-caliber leading cadres capable of assuming heavy responsibilities and withstanding the test of trials and tribulations, and especially to train a large number of outstanding leading cadres for the mission of running the Party, state and army in accordance with the principle of bringing up more revolutionary, younger, better educated and more professionally competent cadres.

He urged for expanding the coverage of the Party's work to increase the rallying power and combat effectiveness of primary organizations.

"We should recruit Party members mainly from workers, farmers, intellectuals, servicemen and cadres, thus expanding the basic components and backbone of the Party," He said. "We should admit into the Party advanced elements of other social strata who accept the Party's program and constitution, work for the realization of the Party's line and program consciously and meet the qualifications of Party membership following a long period of test, in order to increase the influence and rallying force of the Party in society at large."

Jiang said that at all times and under all circumstances the Party should stick to its mass line and regard the people's interests as the starting point and goal of all work.

He described combating and preventing corruption resolutely as a major political task of the whole Party, saying that Party committees at all levels must fully recognize the urgency as well as the protracted nature of the fight against corruption.

"They should enhance confidence, do a solid job, take a clear-cut stand and never waver in carrying on the fight in depth," he said.

Leading cadres, particularly senior ones, Jiang said, should play an exemplary role in exercising the power in their hands correctly and they must always be honest and upright and take the initiative to crack down on all forms of corruption.

"All corruptionists must be thoroughly investigated and dealt with without leniency," he said.

(Xinhua News Agency November 8, 2002)