Full Text of Premier Zhu's Government Work Report(II)

Following is the full text of the Report on the Work of the Government Premier Zhu Rongji delivered at the First Session of the 10th National People's Congress on March 5, 2003:

II Suggestions for the Work of the Government in 2003กกกก

The Sixteenth National Congress of the Communist Party of Chinaset the goal of building a well-off society in an all-round way inthe first 20 years of this century, and pointed the way for opening a new stage in the cause of building socialism with Chinese characteristics. The year 2003 is the first year of our work to comprehensively implement the spirit of the Sixteenth Party Congress, and success in the work of the government for this year will be of tremendous importance.

The general requirements for our work this year as set forth by the Central Committee of the Communist Party of China are: take Deng Xiaoping Theory and the important thought of Three Representsas our guide; earnestly carry forward the spirit of the Sixteenth Party Congress; steadfastly give top priority to development in the Party's governance and rejuvenation of the country; vigorously respond to difficulties and challenges caused by changing domestic and international environments; continue to follow the policy of expanding domestic demand as well as the proactive fiscal policy and prudent monetary policy; further deepen the reform and open still wider to the outside world; accelerate the strategic readjustment of the economic structure; promote a sustained, rapid and sound development of the national economy and integrate speed with structure, quality and efficiency; correctly handle the relationships among reform, development and stability; effectivelyimprove the development of democracy and the leg al system and thepromotion of spiritual civilization and Party building; and promote a coordinated development of socialist material civilization, political civilization and spiritual civilization. In keeping with these general requirements, and considering the upcoming election of a new government at the First Session of the Tenth National People's Congress, and after careful deliberation, the State Council wishes to put forward the following suggestions for the work of the government in 2003:

1. Continue to expand domestic demand and achieve a steady and rapid economic growth

Maintaining the good momentum of economic growth is the basis for success in all fields of our work. Based on our overall analysis of the situation at home and abroad, we set the target for 2003 economic growth at around 7%. This growth rate is both necessary and achievable through hard work. It is imperative that we pay adequate attention to raising the quality and efficiency ofeconomic growth by readjusting and optimizing the economic structure. We should adhere to the policy of expanding domestic demand, continue to implement the proactive fiscal policy and prudent monetary policy, and ensure a double-pull effect on economic growth from both consumption demand and investment demand.

First of all, we should strive to expand consumption demand. Given the current situation, this is more important than greater investment demand. We should continue to increase the income of urban and rural residents, especially those with low income, and work hard to raise the living standards of the population. We should do everything possible to increase farmers' income and lighten their burden. We should effectively solve the problems theneedy face in work and livelihood. Our original plan to raise the salaries of government employees as well as retirees' pensions in the second half of last year was postponed in order to first solvethe problems of the urban poor and to harmonize relationships among the interests of all quarters. This measure, however, will take effect this year. We should continue to improve the consumption climate by improving relevant policies and expanding areas of consumer spending.

A relatively fast increase in investment should be maintained. Based on an overall consideration of various factors, we plan to issue 140 billion yuan of long-term construction treasury bonds in 2003. We should redirect the use of funds to be raised from treasury bonds as follows. Priority should be given to ongoing projects and projects which are near completion, and to a selected number of new projects which are wholly necessary. More support should be given to development of the western region, projects to improve production and living conditions in rural areas, technological transformation of enterprises, improvement of the ecological environment, and undertakings in science, education, culture and health care. We should broaden the channels for investment from society and for enterprise financing and direct investment funds from society to industries and development projects encouraged by the state. We should resolutely guard against redundant low-level development. In some localities, real estate investment is expanding too rapidly and too many luxury homes are being built. We must heighten our vigilance against risks and potential losses from blind development.

While continuing to watch out for and defuse financial risks, we should generate more financial resources to support economic development. Banks must give priority to extending matching loans to projects financed by treasury bonds, lend more money to enterprises that are profitable and trustworthy and have a ready market for their products, provide more credit to support agriculture, the rural economy, small and medium-sized enterprisesand the service industry, and standardize and increase consumer credit. We should improve banking services, tighten financial regulation, and develop securities, insurance and money markets inaccordance with established standards.

We should conscientiously handle fiscal and taxation work and vigorously increase revenue and cut expenditures. By strengtheningtax collection and management according to law and cracking down on all forms of tax evasion and tax fraud, we will ensure that alltaxes due are collected without exception. Financial departments at all levels should arrange their expenditures so that funding for key items is ensured. They must first pay wages and salaries on time and in full, continue to increase their social security contribution, increase spending on agriculture, compulsory education and health care in rural areas, and increase transfer payments to the country's central and western regions and areas indifficulties.

2. Promote all-round development of agriculture and the rural economy

We should continue to take developing agriculture and the ruraleconomy and increasing farmers' income as the top priority of our economic work. Economic and social development in urban and rural areas must be coordinated, and work relating to agriculture, ruralareas and farmers must be done well.

We should accelerate structural readjustment in agriculture andthe rural economy. We should continue readjusting the distributionof agricultural areas. We should vigorously develop animal husbandry, aquatic farming and the processing of agricultural products. We should vigorously expand the industrial management ofagriculture, better organize farmers' access to the market and raise the overall efficiency of agriculture. We should forcefully increase export of agricultural products. While returning more farmland to forests and grass, we should implement without delay the national plan for the conservation of grasslands. We should strengthen the system for quality and safety of agricultural products and the system of commercialized services for agriculture.We should continue implementing and improving the rural household land contract system, manage well the non-agricultural land and prohibit unauthorized use and expropriation of arable land. While continuing to deepen various reforms in rural areas, we should extend the experiment with rural taxes and administrative charges to all parts of the country on the basis of well summed up experience and improved policies. We should conscientiously implement all policies and measures designed to lighten the burdenon farmers. We should protect farmers' interests better by deepening the reform of the grain and cotton distribution system.

We should invest more in the development of agriculture infrastructure and in agricultural science and technology. We should speed up the construction of facilities for water-saving irrigation and for supplying potable water for people and livestock, roads linking county seats and townships, facilities for rural energy supply, as well as educational, medical and health facilities in the countryside. More assistance should be given to major grain producing areas. A good job should be done inalleviating poverty through development. The collective economy should be helped grow stronger. Intra-county economic development should be promoted. The process of urbanization should be accelerated. We should develop well laid-out small towns on the basis of scientific planning. We should coordinate and guide the shifting of surplus rural labor to non-agricultural undertakings better, and protect the legitimate rights and interests of farmer-laborers holding temporary or permanent jobs in cities.

3. Aggressively push forward the readjustment of the industrial structure and the development of the western region

We should speed up the readjustment of the industrial structure according to the need for a new approach to industrialization. Vigorous efforts should be made to develop high and new-tech industries that can greatly spur our economic growth. We should energetically promote IT application and use IT to propel and accelerate industrialization. We should make extensive use of advanced adaptive technologies to transform traditional industriesand invigorate our equipment manufacturing industry. We should do a good job in planning and readjusting the development of our steel, automobile and building materials industries to prevent blind expansion and disorderly competition. We should eliminate aneven bigger slice of our production capacity that has become obsolete. We should vigorously develop modern services and tourism.We should attach great importance to the development of community-based services.

The development of our western region requires sound and persistent efforts. We should focus on key projects, stress practical results and lay a solid foundation. While continuing to strengthen our protection of the ecological environment and infrastructure development, we should effectively restore cultivated land to forests, protect natural forests, and prevent further desertification. The program of restoring grazing areas tograsslands should continue, and relevant legal work should be intensified. We should work harder and more effectively on major projects to ensure the progress and quality of construction. Economic activities with local characteristics and competitive industries should be given greater support. We should accelerate the development of science, technology and education in the western region. Economic exchanges and cooperation among the eastern, central and western regions should be strengthened, so that they can complement one another and develop side by side. Measures should be tightened to prevent unwarranted transfer to the western region of discarded, obsolete industrial equipment andpolluting enterprises. We should take effective measures to support the old industrial bases in Northeast China and other regions in their efforts to quicken readjustment and technologicaltransformation, encourage cities or areas that are mainly dependent on resource exploitation to develop alternative industries, and help the old revolutionary base areas and areas inhabited by ethnic minorities to develop more quickly.

4. Deepen economic restructuring and open still wider to the outside world

While adhering to and improving our basic economic system in which public ownership plays the dominant role and diverse forms of ownership develop by its side, we will unswervingly consolidateand develop the public sector of the economy, and unswervingly encourage, support and guide the development of the individual, private and other non-public sectors of the economy. We should continue to push reforms turning state-owned enterprises into standard joint-stock companies and improve the mechanisms of supervision over them in