Premier Zhu Reports Government Work (II)

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Last updated at: (Beijing Time) Tuesday, March 05, 2002

Premier Zhu Reports Government Work (II)

Chinese Premier Zhu Rongji delivered the Report on the Work of the Government to the Fifth Session of the Ninth National People's Congress (NPC), which opened at the Great Hall of the People Tuesday morning. The report falls into eight parts in about 15,000 Chinese characters.

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Premier Calls for Pushing Forward Economic Restructuring

Premier Zhu Rongji has called for great efforts to push forward economic restructuring while delivering the Report on the Work of the Government.

In the report, Zhu called for further resolving structural inconsistencies and remove institutional obstacles that impede economic development. This is an essential measure to sustain development of the national economy, improve the quality of its performance and enhance its competitiveness, he stressed.

He pledged to make unremitting efforts to adjust the economic structure and deepen the economic restructuring.

On accelerating the optimization and upgrading of the industrial structure, he said that first, China should utilize new and high technologies and advanced applied technologies to transform and upgrade traditional industries.

The government will support the technological transformation of key industries and enterprises and help large equipment manufacturing enterprises that perform important tasks assigned by the state to raise their capacity for product development and technological innovation. Enterprises need to draw up plans and choose feasible projects for technological transformation, focusing on "quality, variety and performance." They cannot engage in redundant construction or only expand their production capacity.

The achievements made by the textile, metallurgical and coal industries in eliminating outmoded production capacity need to be consolidated and expanded.

The petrochemical, building materials, machinery, pharmaceutical, sugar refining and tobacco industries should continue to reduce their surplus and outmoded production capacities. Production capacity once eliminated must never be put to use again under any pretext or in any form. Energy restructuring will continue.

China should encourage old industrial bases to accelerate their industrial restructuring and technological transformation. The government will help the cities and old mining areas that mainly exploit resources to develop new industries.

Second, China should accelerate the development of information, biology, new materials and other high and new technology industries.

The government will continue to organize and initiate key projects for industrialization of high and new technology in such fields as information networks, new electronic components, integrated circuits, software, new materials, and the use of modern technologies in production of traditional Chinese medicines.

China should extend the application of information technology throughout the national economy and society.

Third, China should develop tertiary industries, particularly modern service industries.

China should accelerate the development of the banking, accounting, consulting, legal and other service industries. China should gradually adopt such organizational forms and service methods as commercial chains, goods flow and distribution, the agency system and e-commerce. The tourism industry and cultural industries need to be greatly expanded.

The premier called for continued efforts to develop the western region and promote coordinated development of different areas, and strengthen the infrastructure development and improve the ecological environment in the western region.

Efforts should be concentrated on key projects, including the Qinghai-Tibet Railway and the projects to divert gas and electricity from the western to the eastern regions.

China will carry forward projects to return cultivated land to forests, to protect natural forests, to build the northwest-north-northeast China networks of shelterbelts, and to prevent and control desertification.

Zhu stressed that the various policies and measures for developing the western region must be carried out in earnest to stimulate the development of old revolutionary base areas, areas inhabited by ethnic minority groups, border areas and poverty-stricken areas.

The western region should develop industries for which it has favorable conditions and those with local characteristics and avoid redundant construction and haphazard investment.

Efforts will be made to prevent the transfer to the western region of factories and equipment which have been eliminated elsewhere so as not to damage the ecological environment there.

The central region needs to exploit its advantages in geography and resources and create new points of economic growth. The state will assign more construction projects to the region to accelerate its development, according to the premier.

The eastern region should optimize its industrial structure and vigorously develop its export-oriented economy, improve its economic quality, raise its competitiveness, and take various measures to strengthen its economic and technological cooperation with the western and central regions.

According to the premier, China has made great progress in the SOE reform over the past few years, but the country still faces many difficult problems, and has to continue to work hard and deepen the reforms.

First, a modern corporate system should be firmly established. Continued efforts will be made to adopt a standardized corporate system in SOEs, improve the corporate governance, and change the way enterprises operate.

This year the government will concentrate on examining the modern corporate system established in listed companies to uncover problems and solve them; deepen the internal reform of enterprises; implement reforms of the income distribution system on a trial basis in a few large enterprises managed by the central authorities and companies listed on overseas stock markets; and establish effective incentive and restraint mechanisms for enterprise managers.

The accounting system of the enterprises should be brought into conformity with international accounting practice. Enterprises should tighten and improve their management of quality, costs and marketing. Enterprises should accelerate the application of modern management methods and information technology.

Second, positive efforts need to be made to promote the restructuring and reorganization of enterprises, and form and develop as quickly as possible a number of large companies and enterprise groups that are internationally competitive.

The government should take various measures to relax control over and invigorate small and medium-sized state-owned enterprises.

In restructuring and reorganizing enterprises, efforts must be made to prevent the loss of state assets and evasion of bank debts.

Third, the government will continue to properly handle bankruptcies and mergers of enterprises through well-planned steps, and to pay special attention to making proper arrangements for laid-off workers in accordance with the government policy in order to maintain social stability.

The government will appropriately increase the capital reserves in banks available to write off non-performing loans and bad debts, which will be mainly used for bankruptcies and mergers of enterprises in key industries and regions, especially the shutdown and bankruptcies of mines with exhausted resources, military industrial enterprises and other enterprises that experience special difficulties.

The government will continue to free enterprises from performing social functions.

China will carry forward the reform of monopoly industries. Efforts will be made to break industrial monopolies and establish a proper degree of competition by separating the functions of the government from those of enterprises and by restructuring enterprises.

China will reform the management systems of the telecommunications, power and civil aviation industries as soon as possible and lose no time in drawing up plans for the reform of the railway management system.

The relevant departments need to provide effective guidance to the reform to ensure that production and business operations proceed smoothly and that the workforce is stable.

China will continue to follow the basic economic system to keep public ownership in a dominant position and have diverse forms of ownership develop side by side.

Efforts will be made to seek a variety of effective forms of public ownership. China will continue to develop the mixed ownership and the collective sectors of the economy, encourage, support and guide the sound development of the private and individual sectors of the economy.

China will deepen other reforms to meet the requirements for improving the socialist market economy. The government will formulate and implement plans for the reform of the investment and fund-raising systems as quickly as possible.

China will continue to deepen the reform of the systems of income distribution, as well as reforms in banking, finance and taxation, foreign trade and housing.

Premier Calls for Wider Opening After WTO Entry

Premier Zhu Rongji has called for adapting to the new situation following China's entry into the World Trade Organization (WTO) and opening wider to the outside world.

Zhu said that China's entry into the WTO indicates that its opening up has entered a new stage. "We need to actively participate in international economic cooperation and competition on a broader scale and in greater depth and complete our tasks for the first year of China's membership in the WTO."

According to the premier, in recent years and especially over the past few months, China has done a great deal of work to meet requirements for its entry into the WTO.

Review of relevant state laws and statutes has been completed by and large, and a number of laws and regulations have been repealed, revised and formulated.

Beginning January 1, 2002, China's general tariff level has dropped from 15.3 percent to 12 percent, and the reduction involved more than 5,300 taxable items.

This year China should concentrate on increasing its international competitiveness and fulfilling the following tasks on the basis of what has been achieved, according to Zhu.

First, following the principles of the uniformity of law, nondiscrimination, and openness and transparency, China quickly improve the system of foreign-related economic laws and statutes so that they are suitable to domestic conditions and the WTO rules and able to guarantee fair and efficient law enforcement.

Second, according to the commitments in its entry into the WTO, China should gradually expand the spheres of activity open to foreign businesses. In addition, it should promptly formulate and revise market access standards for quality, sanitation, epidemic prevention, environmental protection and safety.

Third, China should study, master and fully exercise all the rights that the country enjoys as a member of the WTO, and actively promote and participate in regional economic cooperation.

Fourth, China should study and publicize information about the WTO and its rules, and provide training to public servants, especially leading cadres at and above county and division level and to managerial staff in large and medium-sized enterprises by stages and in groups.

China should bring forth, through training, a contingent of people who are well acquainted with the WTO rules and international economic cooperation and trade.

The premier said that foreign trade work has to be done conscientiously. China should continue implementing the strategy of market diversification to increase this year's exports.

He called for efforts to retain existing markets for China's exports and open new ones. China will adjust and optimize the mix of export commodities, improve their quality and raise their added value.

The policy measures for encouraging exports must be fully carried out, he said, noting that key enterprises that generate large sums of foreign exchange through export and enjoy a good reputation should be ensured of tax refunds in full and on time.

Zhu said that China will promptly reform and improve the system of export tax refunds. Tax exemption, reduction and refunding measures will be applied to those commodities which producers manufacture and export on their own or entrust foreign trade businesses to serve as agents for exporting, he said.

China will expand export credit insurance and provide more support for export. Reform of the customs service will be deepened to further facilitate customs clearance and to improve customs supervision.

China will also further reform and reorganize state-owned foreign trade businesses and diversify foreign trade entities and export channels.

In continuing implementing the "go global" strategy, China will encourage and help eligible enterprises under various forms of ownership to set up factories or undertake contracted projects outside China, particularly in neighboring countries, in order to increase the export of technology, equipment, materials and labor, the premier said.

China will import advanced technologies, key equipment, and raw and semi-finished materials that are in short supply in the country, and gradually diversify its import markets for strategic supplies.

He said that China will continue to utilize foreign funds and optimize the mix of foreign investment, with focus on bringing in advanced technology, modern managerial expertise and qualified specialists.

China will encourage and guide foreign businesses to invest in modern agriculture, industries using high and new technologies, construction of infrastructure facilities, and development of the western region and to participate in the restructuring and reorganization of state-owned enterprises, according to Zhu.

He called for encouraging foreign businesses, especially transnational corporations, to set up research and development centers, production bases and regional headquarters in China.

To promote the development of China's service industries, the country should attract large reputable foreign enterprises and intermediary agencies engaged in commerce and trade, tourism, accounting and auditing.

China should also create conditions for attracting investment by small and medium-sized overseas enterprises.

He pledged to continue improving the investment environment and the legal system; do everything in accordance with the law; render better services to investors; improve efficiency, and standardize the work related to attracting foreign businesses and investment.

Thoroughly rectifying and regulating the order of the market economy

Premier Zhu Rongji has called for greater resolve and more effective measures to continue rectifying and regulating the order of the market economy.

Thoroughly rectifying and regulating the order of the market economy is urgently needed to expand domestic demand and ensure sound economic growth, he stressed.

The premier said that this is an inevitable choice China should make in consequence of its entry into the WTO and the new steps taken to open the country to the outside world. This is also an important measure to improve the socialist market economic system, upon which success or failure of China's modernization hinges, he added.

On the basis of the initial results achieved last year, China should press ahead with this task with a still greater resolve and even more effective measures, he said, noting that the work should be carried out in an all-round way while emphasizing key points.

The government should pay great attention to the current outstanding problems and concentrate on the following tasks:

First, China should severely crack down on all illegal and criminal activities related to the production and sale of counterfeit and shoddy goods, especially food, medicines and medical apparatus that seriously endanger people's lives and health.

Second, China should continue rectifying and standardizing the markets for construction and cultural products and the order of finance and taxation.

Unremitting efforts must be made to combat such crimes as tax fraud and evasion, evading foreign exchange control, obtaining foreign currency through deception, pyramid selling and smuggling. Such violations of the law as forging invoices and vouchers and falsifying accounts must be dealt with severely.

China will regulate and standardize accounting firms and other intermediary service organizations. The government will make great efforts to rectify the order of the tourism market.

Third, the financial order has to be thoroughly rectified. The authorities will earnestly investigate and deal with business activities that violate laws and regulations concerning banks, securities and insurance companies, and other financial institutions.

China will resolutely ban illegal financial institutions and illegal financial activities. Financial swindling, illegal fund-raising, manipulation of the securities market, insider trading, and malicious evasion and cancellation of debts should be investigated and dealt with according to law.

Fourth, local protectionism and monopoly of industries must be eliminated. The government will deal with and stop, according to law, the acts of abusing privileges to set up trade barriers, obstruct commodity circulation and impede fair competition.

China will continue to tighten management of the market for finished oil and market fairs. The government will launch campaigns to rectify prices and fees.

Fifth, the management of industrial and traffic safety will be strengthened. The safety responsibility system should be improved.

To prevent major industrial accidents, the government will take effective measures to correct supervision and performance of work that violate safety rules and regulations.

The government will tighten supervision and management over the entire process of handling dangerous chemicals and inflammable and explosive materials from production, marketing, transport and warehousing to use.

Factories and mines that produce inferior products, contaminate the environment, damage resources or do not meet production safety standards must without exception be shut down in accordance with the law.

In rectifying and standardizing the order of the market economy, the government will concentrate on investigating major cases and severely punish those guilty of crimes or corruption.

According to the premier, in its efforts to rectify and regulate the order of the market economy, the government will try to seek both temporary and permanent solutions while focusing on the permanent solution.

The qualifications of all kinds of market entities should be carefully examined to properly control market access. Government departments at all levels must sever their ties with enterprises and intermediary organs in accordance with relevant regulations.

Zhu said that the government will further take effective measures to implement the regulations on separately managing the receipts and expenditures of administrative charges and incomes from imposition of fines and confiscation.

Comprehensive and departmental budgets should be prepared to ensure that all departments have sufficient funds to perform their duties according to law and strictly enforce the law.

He pledged to strengthen the rule of law, improve the regulations linking administrative penalties to criminal investigation and prosecution, resolutely prevent and correct the acts of failing to punish lawbreakers and replacing punishment with imposing a fine, and deal with violations of the law more severely.

China will solve problems of law enforcement involving authorities at different levels or various government departments at the same level and improve the system of responsibility for law enforcement and the system of accountability, he said.

China will effectively improve social credibility and gradually develop moral standards throughout society based on honesty and moral integrity, he noted.

The premier said that China will accelerate the establishment of credibility records for enterprises, intermediary agencies and individuals, making those with a record of bad conduct pay a price for what they have done, and have their credibility ruined and even punishing them according to law.

China will extensively apply modern means of supervision, utilize online information, establish interconnected networks and share information, he said.

China will accelerate the reform of the system of distributing goods and develop modern methods of distribution to make it difficult to put counterfeits and shoddy goods on the market, according to the premier.

He made it a point that the government will give full play to the role of industrial associations and intermediary organizations, change and improve their mechanisms of self-discipline and attach importance to supervision by the general public and news media.

Implementing the stragety of developing the country through science and education

Premier Zhu Rongji has highlighted the importance of implementing the strategy of developing the country through science and education, and expediting scientific and technological progress and innovation.

His remark came at Tuesday's opening of the annual session of the National People's Congress (NPC), when the premier delivered the Report on the Work of the Government.

Zhu said that China will accelerate the establishment of a state innovation system; concentrate on strengthening basic research and research in high and new technology of strategic importance and improve the capability of independent innovation; upgrade industries and increase their competitiveness; and strengthen research and development of key technology and widely applicable technology and accelerate the application of research results to production and their dissemination.

According to the premier, China will set up new and improve existing mechanisms to encourage venture investment and provide incentives for scientific and technological innovation.

China will further reform the management system for science and technology and deepen the reform of applied research institutes and non-profit research institutes.

Departmental and regional barriers will be removed to rationally allocate research resources in society in order to form a management system for science and technology that integrates government departments, local authorities, institutions of higher learning and enterprises.

China will develop philosophy and social sciences and focus on research on topics of long-term, strategic importance, and topics that affect the overall interests of the country. China will effectively protect and manage intellectual property rights.

Zhu called for continuing to give priority to the development of education. The government will intensify its efforts to improve quality-oriented education and strengthen ideological and political work at schools in order to help the students improve their moral qualities, intellectual ability, physical fitness and aesthetic appreciation, he said.

China will strengthen basic education and consolidate and expand the achievements the country has made in making nine-year compulsory education basically universal and eliminating illiteracy among young and middle-aged people in rural areas.

The government will pay particular attention to quickening the pace of making nine-year compulsory education universal in poverty-stricken areas and areas inhabited by ethnic minority groups, according to the premier.

China will extend the reform of the management system for rural compulsory education under which county authorities assume main responsibilities. The government will make sure that teachers are paid in full and on time.

He said that senior secondary school education will be vigorously expanded, adding that China will steadily develop regular higher education by adjusting the division of disciplines.

China will make great efforts to develop secondary and higher vocational education; reform the curriculum and teaching materials, updating instruction content and improving the quality of teaching; continue to promote the reform of the internal management system of institutions of higher learning and commercialize their support services.

The ideological level and professional competence of teachers should be raised in an all-round way, he stressed.

China will accelerate the application of IT to education and develop modern distance education. The government will increase its input in education and encourage, support and standardize the running of schools by non-governmental sectors or by Chinese-foreign cooperation.

The premier also called for earnestly implementing the strategy of tapping human resources. The government will adhere to the guiding principle of making the ranks of cadres more revolutionary, younger in average age, better educated and professionally more competent and the principle of having both political integrity and professional ability, he said.

According to the premier, the government will accelerate the training and selection of outstanding personnel, especially those who are well trained in high technology, international finance, accounting, trade, law or modern management in order to meet the new needs of reform and opening up and the modernization drive.

China will deepen the reform of the personnel system related to cadres to improve their selection, appointment, evaluation, incentives and supervision, Zhu said.

The government has to become adept at identifying young promising scientists and technicians and boldly give them responsible work, he said, calling for giving full play to the role of engineers, technicians and skilled technical workers.

In income distribution, the government will implement the policy of letting technology, management and other essential factors of production have a rightful share. Scientists, technicians and senior managerial personnel who have made outstanding contributions shall be rewarded.

He pledged to take still more effective measures to attract and employ well-trained personnel from abroad and encourage Chinese students studying overseas to return home and work in China.

Sustainable Development

Premier Zhu Rongji Tuesday highlighted the importance to implement the strategy of sustainable development in the Report on the Work of the Government he delivered at the opening of the annual session of the National People's Congress.

Zhu stressed that it is a must to adhere to the basic state policy on family planning and implement the Population and Family Planning Law. The government will pay particular attention to improving family planning work in rural areas and among the floating population, keep the birth rate low, and provide good prenatal and postnatal care.

The government will conscientiously implement the programs for the development of work concerning women and children and protect the legitimate rights and interests of women and minors, while taking better care of the aged.

Programs to help the physically and mentally challenged deserve the concern and support by the government, he stressed.

The premier said efforts will be made to protect and rationally use land, mineral resources, fresh water, marine resources, forests, pastures and climatic resources in accordance with the law; implement a system of rigorous management of arable and forest land; and focus on saving water and energy.

China will utilize natural resources more effectively and improve the system of compensation for their use, and continue to put more money in environmental protection, he said.

Efforts to protect the ecological environment and to prevent and control pollution will be intensified, said the premier. The construction of key environmental protection and pollution control projects will be accelerated.

Zhu said that the quality of the environment in major river valleys, regions, cities and sea areas will be improved by effectively controlling and reducing the discharge of pollutants there.

China will introduce clean production methods, develop the environmental protection industry, expand ecological demonstration zones, plant more trees and grass, and strengthen the protection of wet land.

A system will be established for protecting the environment and preventing and reducing natural disasters, the premier said.

The government will expand health services and pay special attention to public health and to medical services in rural areas, while exploring various forms of health security in rural areas and improving the medical conditions of rural hospitals.

Vigorous efforts will be made to prevent and treat major diseases, including contagious and endemic diseases, develop a nationwide fitness program and raise the competitiveness of athletes, he said.

Good preparations will be made for the Olympic Games in Beijing in 2008 to promote reform, opening up and the modernization drive in the capital, the premier said.

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Premier Zhu Reports on Government Work (III)

Premier Zhu Reports Government Work (I)

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