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Tuesday, March 06, 2001, updated at 15:24(GMT+8)

China to Improve Economic Operation Through Industrial Restructuring

China will further promote industrial restructuring to bring about steady improvement in economic performance this year, said Zeng Peiyan, minister in charge of the State Development Planning Committee Tuesday.

Zeng made the remark in his report on the Implementation of the 2000 Plan for National Economic and Social Development and on the Draft 2001 Plan for National Economic and Social Development (2001- 2005), to the second plenary meeting of the Fourth Session of the Ninth National People's Congress (NPC).

China will accelerate development of high-tech industries, by preparing for and carrying out a number of high-tech projects, including developing a new generation of high-speed broadband information networks, high-definition digital TV, satellite systems for live radio and TV broadcasting, biotechnology and clean coal technology; and starting a number of important special projects in software development, third-generation mobile telecommunications, comprehensive use of water resources and modern industrial management of traditional Chinese medicines.

"We need to extensively apply IT in enterprises in all industries, with emphasis placed on electronic administration and commerce," he said, adding that China will build information network infrastructure.

In the software and integrated circuit industries, the minister said, China will support the development of new components, computer network products and digital audio-visual products; and improve the ability to produce IT equipment and integrate related systems, while great efforts will be made to revitalize the equipment manufacturing industry.

Technological upgrading in key enterprises in this industry will be speeded up through major projects, he said.

The official went on to say that China will develop highly marketable products, concentrating on environmental protection facilities, urban rail transit facilities, petrochemical processing equipment, large-scale supercritical generating units, direct-current transmission and transformer substations and gas turbines.

"We will speed up the reorganization and updating of traditional industries," he said.

Emphasis will be placed on building large petrochemical projects, producing iron and steel and nonferrous metal products that are now in short supply and on reducing energy consumption and production cost, he said.

The country will develop new building materials and accelerate restructuring of the auto industry; and develop and apply technologies that require less consumption of water and petroleum, he said. Application of the technologies for clean coal burning and transformation will be expanded, he added.

China will try out the use of alcohol fuel in selected areas and develop new energy resources and renewable sources of energy to improve the energy structure, according to the official.

The government will be working vigorously to restructure and develop the tertiary industry, by updating traditional services; developing emerging services such as tourism, information, accounting, consulting and legal services; and trying to increase the proportion of the added value of the service industries in the gross domestic product and make sure that they will provide more job opportunities.

China will further deepen the reform of state-owned enterprises, the minister said. A well-regulated nationwide market system that allows fair competition will be established.

China will vigorously develop the market for the essential factors of production such as capital, labor and technology to create conditions for the reform and development of state-owned enterprises, according to the minister.

China will develop a number of large enterprise groups that have distinctive products or services and are well managed and highly competitive and introduce the shareholding system in more large and medium-sized state-owned enterprises.

While a small number of state-monopoly enterprises will be reorganized as state-owned companies, other large and mid-sized enterprises can be transformed into shareholding corporations through listing on the stock market, joint investment with foreign partners or reciprocal holdings with other companies, Zeng said.

The state must retain the controlling share in key enterprises that have a significant bearing on the national economy and national security, he stressed.

While public ownership remains predominant, different forms of ownership will be encouraged, he said, adding that the sound development of private enterprises, especially small and medium- sized science and technology enterprises, will be supported, encouraged and guided.

The minister said that efforts will be made to achieve remarkable progress in reducing administrative examination and approval procedures for enterprises and in breaking industry monopolies; work hard to reform the investment and financing system; and continue to review the matters that are subject to administrative examination and approval procedures and cut them down whenever necessary. Some of them can be put under record keeping, he noted. Even for those matters that have to remain under administrative examination and approval procedures, the procedures must be simplified, he said.

Administrative departments will be required to provide services within a certain timeframe and improve the quality of their work so as to create a more relaxed policy environment for the growth of all types of economic entities, the official said.

He said China will continue the price reform; improve the price setting mechanism by breaking industry monopolies and removing regional blockades; standardize pricing in industries such as electricity, gas and water supply, telecommunications, transportation, medical treatment and education; promote price reform in oil, natural gas, water, electricity, drugs and medical services; make government decisions on prices more scientific and transparent; and also promote the reform of fees and taxes on transportation and motor vehicles.

"We must put people's welfare first, following the principle of 'food first, development second'," the minister stressed.

He pledged to guarantee that workers laid off from state-owned enterprises receive their basic living allowances and that retired people are paid pensions on time and in full, ensuring that no more such payments will fall in arrears.

The government will raise the basic salaries of employees in state organs by an appropriate amount; establish a unified subsidy system for people working in remote regions and places with difficult working circumstances; do all the government can to improve the living standards of low-income groups and improve the welfare system in an effort to ensure that no urban residents live below the poverty line; and deepen reform of the income distribution system and strengthen supervision and management of income distribution in monopoly industries.

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China will further promote industrial restructuring to bring about steady improvement in economic performance this year, said Zeng Peiyan, minister in charge of the State Development Planning Committee Tuesday.

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