Premier Zhu Reports Government Work (I)

Home>>China

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

Premier Zhu Reports Government Work (I)

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.

DISCUSSION

CHINESE

SEND TO FRIEND

China's Economy Keeps Good Development Momentum

China's national economy maintained a good momentum of development in the first year of the new century when the world economy was slowing down, said Chinese Premier Zhu Rongji.

The premier said that "China's GDP in 2001 reached 9.5933 trillion yuan, an increase of 7.3 percent over the previous year thanks to our efforts to provide incentives to domestic demand and our unswerving implementation of the proactive fiscal policy and a stable monetary policy."

Progress was made in the economic restructuring; the structure of agricultural production improved; production of high-quality and special-purpose crops increased; information technology, biotechnology and other high-tech and new industries developed rapidly, he said.

He said that the country made significant progress in upgrading traditional industries, eliminating outmoded production capacity and in developing infrastructure, completing a number of key projects, including highways, railways, reinforcement of main dikes along major rivers, water control, and the upgrading of rural power grids.

"The program for developing the western region was initiated successfully, and major projects including the Qinghai-Tibet Railway and the transmission of electricity from the western to the eastern region were launched in succession. The quality of economic growth and economic efficiency further improved.

Total profits of industrial enterprises of scale reached 465.7 billion yuan, increasing 8.1 percent over the previous year. Tax revenue increased by a large margin. The national revenues reached 1.6371 trillion yuan, increasing by 240 billion yuan in comparable terms.

Financial operations were stable. The general consumer price level rose by 0.7 percent. The total volume of imports and exports exceeded 500 billion U.S.dollars, with exports amounting to 266.2 billion U.S. dollars, a rise of 6.8 percent. Foreign direct investment totaled 46.8 billion U.S. dollars, up 14.9 percent.

China enjoyed a favorable balance in international payments. The national foreign exchange reserves reached 212.2 billion U.S. dollars at the end of 2001, an increase of 46.6 billion U.S. dollars year-on-year.

The Renminbi exchange rates remained stable. The national economy maintained a sustainable, rapid and healthy development.

In 2001, the economic restructuring was further deepened as the reform of state-owned enterprises continued and the pace of establishing a modern corporate system was accelerated. A number of exhausting mines, insolvent enterprises and loss-making enterprises that had little hope of ending losses and turning a profit were declared bankrupt or closed.

Achievements were made in the reform of the grain and cotton distribution systems. Reform of the basic medical insurance system for urban employees, the medical and public health systems, and the system for producing and distributing medicines progressed steadily.

China achieved successes in overhauling and regulating market order, uncovering and punishing 1.2 million cases of making and marketing fake goods, dealing powerful blows at criminals in the economic area, he noted.

More Urbanites Secure Minimum Cost of Living

The living standards of urban and rural residents in China continued to improve in 2001, said Premier Zhu Rongji in his government work report.

The number of city people covered by the insurance for minimum cost of living grew from more than four million at the beginning of the year to more than 11.2 million at the end of the year.

The per capita disposable income of urban residents increased by 8.5 percent in real terms, the premier said.

Both the central and local finances increased greatly their expenditures on social security. The basic living expenses for laid-off workers from state-owned enterprises and basic pensions for retirees were by and large paid in full and in time, he said.

The government raised the salaries of employees of government organs and institutions and the level of old-age pensions for retirees. The basic old-age pensions for retirees from enterprises were also raised. To cover these items, the central finance alone made an additional outlay of 62.1 billion yuan.

The per capita net income of farmers increased by 4.2 percent in real terms. The burdens on farmers were lightened by accelerating the transformation of rural power grids and lowering electricity rates in the countryside.

Premier on Economic and Social Problems

While reviewing achievements over the past year, Chinese Premier Zhu Rongji also identified economic and social problems still existing in the course of development.

In his government work report to the Fifth Session of the Ninth National People's Congress, Premier Zhu said that "we must soberly aware of these problems that demand urgent solutions."

The main problems he identified are: the growth of farmers' income was slow; income of farmers in some major grain producing areas and in areas seriously hit by natural disasters was reduced; wage payment in arrears was serious in some areas; there were still difficulties in the production and workers' life of some enterprises; and employment pressure mounted.

The irrational industrial structure and deep-seated problems in the economic system remain unresolved. Problems of the ecological environment are still outstanding.

Local protectionism still has continued unabated despite repeated orders to ban it, and the order of the market remains to be straightened up.

Formalism and bureaucracy run rife and deception, extravagance and waste are serious in some localities and with government departments and some leading cadres. Some forms of corruption are relatively serious.

There have been cases of work units taking the rules and regulations in their own hands to appropriate fiscal funds or ear-marked funds for other purposes. It is quite common that laws are not fully observed or enforced. Grave work accidents have occurred from time to time. Social order is far from being desired in some places.

"Some of these problems are left over from the past and some are associated with the shortcomings and mistakes in our work. We must attach great importance to these problems and take effective measures to solve them," he stressed.

Premier Outlines General Requirements for 2002

Chinese Premier Zhu Rongji outlined the general requirements for 2002 in his government work report to the Fifth Session of the Ninth National People's Congress (NPC) Tuesday. The requirements are:

-- To further carry out the spirit of the important speech made by Jiang Zemin at the celebration of the 80th anniversary of the founding of the Communist Party of China and the spirit of the fifth and sixth plenary sessions of the 15th CPC Central Committee under the guidance of Deng Xiaoping Theory and the spirit of the 15th CPC National Congress;

-- To correctly size up the complicated volatile international political and economic situation in line with the requirements of the idea of "Three Represents" and resist and overcome the risks and difficulties on the road ahead in order to maintain economic and social stability.

-- To continue the principle of expanding domestic demand, continue to deepen reform, open wider to the outside world, accelerate economic restructuring, overhaul and correct the market order, and improve the quality and efficiency of economic growth in order to promote a sustainable, rapid and healthy development of the national economy and overall social progress.

-- To take effective steps to promote spiritual civilization, improve democracy and the legal system and strengthen the Party building, and transform the functions of the government.

The premier called on the whole country to unite, display industry and thrift in building up the country and greet the convocation of the 16th National Congress of the Communist Party of China with new achievements in reform and opening up and in the modernization drive.

To Expand Domestic Demand and Increase Personal Income

In order to expand domestic demand, China first of all should raise the incomes of urban and rural residents, especially those with low incomes, to increase their purchasing power.

First, the government needs to take more effective measures and adopt all possible means to increase farmers' incomes and lighten their burden.

Second, the urban social security system needs to be further improved. The most pressing task is to ensure that subsistence allowances for laid-off workers from state-owned enterprises and basic pensions for retirees are paid on time and in full. "We will not allow new arrears to occur anywhere," he stressed.

The government will improve the unemployment insurance system, and at the same time, strengthen the system of subsistence allowances for urban residents, so that all eligible poor urban residents will have their essential needs met.

Now that the central government has greatly increased its budgetary funding for subsistence allowances, local governments, on their part, must do the same, according to the premier.

For industries and enterprises in dire straits, the government will take effective measures to help their workers out of their plight, Zhu said. He pledged to continue reforming the basic medical insurance system for employees in urban areas, the medical and public health systems and the pharmaceuticals production and distribution system.

Pilot projects for improving the social security system being carried out throughout Liaoning Province and in some cities of other provinces and autonomous regions will be pushed forward.

The government will work hard to raise, manage and make good use of funds for national social security programs.

Third, the government will again appropriately raise the basic wages and salaries of employees in government departments and institutions and the pensions of their retirees. Enterprises under all forms of ownership also should appropriately increase the wages and salaries of their employees on the basis of improved economic performance.

The premier said that local governments in those places that owe salaries to cadres, procurators, judicial and public security officers and teachers must take effective measures to solve this problem as soon as possible.

He said that local financial departments should first of all ensure that wages and salaries are paid. Wages and salaries that are in arrears must be paid as soon as possible, he stressed.

"We need to ensure that wages and salaries are paid on time and in full even if for that new construction projects have to be canceled and things that are not urgent have to be given up or reduced in scale," the premier said.

On the basis of strict determination of the number of personnel, the central financial authorities will subsidize these outlays through transfer payments to those provinces, autonomous regions and municipalities directly under the central government that cannot meet their obligations, according to the premier.

Provincial financial departments will also subsidize those cities and counties in financial straits through transfer payments.

Fourth, the government will exert every effort to expand employment and reemployment. "This is an important means of increasing people's incomes," he stressed.

He pledged to afford job opportunities on a more extensive scale and create more jobs, and intensify the efforts to develop labor-intensive industries, service trades, and small and medium-sized enterprises that can provide a good many jobs. Efforts will be made to create more jobs in community services, he noted.

The government will adopt elastic, flexible and diversified forms of employment, and develop the labor market, improve the employment service system, and conscientiously implement policies of preferential treatment that encourage self-employment and expand employment.

Special employment assistance should be given to members of disadvantaged groups, he said.

Fifth, the government will expand the scope of consumption, and improve the climate for consumption; eliminate all barriers to consumption by deepening reform and adjusting policies; and encourage people to spend more on housing, tourism, automobiles, telecommunications, cultural activities, sports and other services and develop new focuses of consumer spending, according to the premier.

China to Issue 150 Billion Yuan of Treasury Bonds This Year

Premier Zhu Rongji announced Tuesday the government will issue 150 billion yuan of treasury bonds this year, for "maintaining the necessary level of investment from treasury bonds to stimulate a relatively rapid growth of fixed-asset investment."

"In light of needs and possibilities, we plan to issue 150 billion yuan of long-term treasury bonds for construction in 2002," he said.

According to the premier, funds to be raised will be used mainly for treasury bond-financed projects under construction, development projects in the western region, technological transformation of key enterprises, water diversion from the south to the north, water resource conservation in Beijing and Tianjin, rural infrastructure, facilities for procuratorial, judicial and public security organs, and facilities for universities and colleges that will increase their enrollments.

Work on most of the projects financed by treasury bonds and launched since 1998 must be basically completed this year, he stressed.

Zhu said that at present, people's savings deposits have increased considerably; banks have sufficient funds; interest rates are low; market prices are stable; and the ratio of national debts to GDP is still within safe limits. There is still room for issuing more long-term treasury bonds for construction without incurring great risks, he noted.

The investment of treasury bonds in construction of major projects and projects urgently needed by society will not only help stimulate economic growth and expand new sources of revenue, but also help pool resources of all sides for accomplishing large undertakings and improve the results of all investments, he said.

While expanding investments from treasury bonds, measures should be taken to utilize funds from other domestic sources effectively and to direct and encourage investments from all sectors of society, the premier said.

He called for great attention to utilizing funds rationally and economically and resolutely prevent ineffective input and redundant construction.

"In infrastructure development, we also need to plan rationally, do everything according to our financial capabilities, stress economic results, and avoid inappropriately high standard construction," he said.

China will continue to tighten supervision and management over the use of capital from treasury bonds, the construction of projects and the quality of engineering and to investigate and severely deal with any act of withholding or misappropriating these funds.

Premier Zhu Highlights Rural Work

Premier Zhu Rongji highlighted the importance of "accelerating the development of agriculture and the rural economy and increasing the incomes of farmers," in the Report on the Work of the Government.

Developing the agricultural productive forces and raising farmers' purchasing power are an important aspect of the effort to stimulate domestic demand, and have a bearing on overall national economic development and social stability, the premier said, adding that strengthening agriculture and increasing farmers' incomes should be taken as a major task in the economic work.

Increase in farmers' incomes and reduction in their burdens will be an important criterion for judging the agricultural and rural work, he stressed.

In the final analysis, to increase farmers' incomes it is necessary to accelerate agricultural and rural economic restructuring, vigorously develop industrial management of agriculture and promote the modernization of traditional agriculture, he said.

Zhu said that the government will make great efforts to extend the use of improved crop strains and advanced technology, accelerate the development of high quality, special-purpose and pollution-free agricultural products. Agricultural restructuring will continue, and animal husbandry and aquaculture will be developed vigorously, he noted.

According to the premier, the patterns of agricultural production will be adjusted and optimized in the light of regional advantages.

Coastal regions and suburbs of large and medium-sized cities should energetically develop high-efficiency agriculture. The main grain producers in the central region should take advantage of the fact that the main grain purchasers have given up a certain part of the grain market and increase the production of high quality grain, increase the overall benefits deriving from grain production and become more competitive on the market.

The western region needs to expand the production of agricultural products with distinct local characteristics and develop drought-resistant and environmentally friendly agriculture. The export of farm produce needs to be expanded.

China will promote joint operations between farmers and companies and encourage farmers to grow crops on a contract basis so as to gradually integrate the production, processing and marketing of agricultural products, according to the premier.

The government will step up the development of a number of leading enterprises that can give strong impetus to agricultural production in a large area, and deepen the reform of the system of agricultural scientific research and dissemination of agricultural technology.

Producers, research institutes and schools are encouraged to work together, he said, stressing that the government will continue to implement the Spark Program to speed up the translation of scientific and technological achievements in agriculture into productive forces and spread the use of these achievements.

In carrying out agricultural restructuring, it is a must to follow market demand, proceed from realities, and respect farmers' wishes, and on no account must coercion and commandism be allowed, he said.

In order to create a favorable market environment, governments at all levels must work out feasible plans, increase scientific and technological input in agriculture, improve their services, and improve the quality standard and certification system, the inspection and testing system, and the market information system for agricultural products, he noted.

According to the premier, the following must be done to increase farmers' incomes considerably as fast as possible:

First, more farmland will be returned to forests. The achievements over the past two years have proved that returning arable land to forests (or pastures and lakes) in the central and western regions is both an important measure for improving the ecological environment and promoting agricultural restructuring and an effective way of directly increasing farmers' incomes.

With ample supplies of grain and other agricultural products, the government is currently in a good position to accelerate the return of farmland to forests. More land will be restored to forests this year than before, and rest-grazing will be promoted.

China will quicken the pace of planting trees on barren hills and uncultivated land wherever possible. Guidance should be tailored to individual local conditions.

It is essential to conscientiously implement all the policies for returning farmland to forests and improve supporting measures. No time should be lost in breeding and supplying improved seedlings and the quality of the work of returning farmland to forests should be guaranteed.

In returning farmland to forests and protecting natural forests, attention should be paid to the development of replacement industries so as to guarantee long-term sources of income for the local people and the financial revenues of the relevant localities. Laws and regulations on returning farmland to forests should be formulated without delay.

Second, the reform of rural taxes and administrative charges and the reform of the grain and cotton distribution systems will be deepened. The reform of rural taxes and administrative charges is a fundamental way of reducing the burden on farmers.

This year the scope of reform experiments will be extended, mainly in the major grain producing and agricultural provinces in the central region. Reform experiments will also continue in some selected counties and cities in other provinces, autonomous regions and municipalities directly under the central government.

The central financial authorities will have a budget supporting these reforms, and the financial departments of the areas concerned should also set aside appropriate funds to support them. At the same time, related reforms of township and town institutions, rural education, and county and township financial systems will be carried out.

The reform of rural taxes and administrative charges is designed both to lighten the burden on farmers significantly and to ensure the funds needed by townships and villages to work and develop normally, especially the funds for compulsory education in rural areas.

Rural areas that have not yet begun reforming their taxes and administrative charges should strictly follow the relevant regulations of the central government in continuing to reduce the burden on farmers.

All localities should make more efforts to regulate unauthorized charges in education, electricity and housing construction in rural areas. Measures for deepening the reform of the grain distribution system have to be implemented in full.

Great efforts need to be made to further the reform of state-owned grain trading enterprises. Management of the grain market needs to be improved and strengthened. Main grain producers and purchasers are encouraged to establish long-term stable cooperative relations.

The government will continue to do a good job in every aspect of the market-oriented reform of cotton marketing to keep cotton production and the cotton market stable, he said.

Third, efforts will be made to increase sources of income for farmers. The government will speed up the development of rural secondary and tertiary industries, especially farm produce processing and rural services.

The government will guide rural enterprises to accelerate their restructuring, technological progress and operational system renovation in order to reach a higher level of development. Expanded economic exchanges between towns and rural areas can significantly increase farmers' incomes.

Local governments should abolish unreasonable restrictions, cancel improper charges and improve their services in order to make it easier for farmers to migrate to cities for work or business and to guarantee their legitimate rights and interests.

At the same time, supervision and guidance of this work should be strengthened. Urbanization should proceed in a positive and sound manner.

Fourth, greater efforts will be made to support agriculture. The government will adopt measures that conform to the WTO rules and effectively safeguard the interests of Chinese farmers.

The government will increase investment in agriculture and rural infrastructure to improve production and living conditions in the countryside and the ecological environment there.

Emphasis should be placed on support for projects of water-conserving irrigation, drinking water, production and use of marsh gas, hydroelectric power generation, rural road building, and grazing land fencing.

Support for agriculture should be strengthened in the fields of agroscientific research, dissemination of agricultural techniques, prevention and control of plant diseases, pest control, information consulting and farmer training. Financial service for agriculture will be improved.

Further efforts will be made in poverty alleviation and development in rural areas, increasing funding from various sources to aid the poor, and expanding programs that provide jobs for people as an alternative to relief.

More efforts should be made to aid disaster-stricken and destitute areas through reduction and exemption of agricultural or stock breeding taxes, and this policy should be carried out to the letter. Positive efforts should be made to help families living below the poverty line and families designated for special assistance resolve their practical difficulties.

Next

Questions?Comments? Click here

Premier Zhu Reports on Government Work (III)

Premier Zhu Reports Government Work (II)

>> Full Coverage