Breakthrough Progress in Reform & Opening over Past 5 Years

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Last updated at: (Beijing Time) Tuesday, March 04, 2003

Breakthrough Progress in Reform & Opening over Past 5 Years

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Breakthrough progress has been made in reform and opening up over the past five years, two most important indications of this are: a socialist market economic system has been established; with the historic decision made at the Doha conference, China has become a full member of the World Trade Organization (WTO), thus ushering in a new stage in opening up to the outside world.

Reform in every field of endeavors in the Past five Years has been advancing along the market orientation and contributing to the establishment of a socialist market economy

The partition, reorganization and reform of power, telecommunication and civil aviation departments have put an end to the situation of trade monopoly.

In fact, changes brought about by reform are taking place everyday here in China. People have more choices in their purchase of goods, from such luxurious commodities as houses, cars and home appliances to ordinary food as rice and fruits. The convenient and smooth channels of circulation, the numerous selling methods and the increasingly perfect market system are concrete expressions of the growth of the market economy.

Through the interactions of supply and demand, price and competition, the market, "an invisible hand", has properly allocated over 95 percent of commodity resources, at the same time, it has brought about extremely rich commodities and unprecedented market prosperity.

An enterprise is a cell of the modern economy, reform means to allow each cell to be filled with vigor.

State-owned enterprise (SOE) reform is deepening continuously, a large batch of SOEs have been carrying out standard corporate system transformation in compliance with the requirements of establishing a modern enterprise system, thus realizing the diversity of equity right and enhancing the enterprise's own strength. Through assets regrouping, the China Offshore Oil Co. Ltd. has successfully listed at home and abroad, its total assets have increased from over 30 billion yuan to over 70 billion yuan in three years. With their enormous strength, they have plenty of room for development on the international and domestic markets and have created considerable efficiency. A number of their economic indexes are by no means inferior to those of similar companies in the world. Between 1989 and 2001, although the number of SOEs was reduced from 74,000 to 47,000, the profits they earned shot up from 74.3 billion yuan to 238.9 billion yuan. The distribution of State-owned economy was optimized through adjustment and their overall qualities were improved in competition.

At the same time, the rapid development of non-public economies demonstrated their strong vitality. The common development of economies in different forms of ownership with the public economy as the mainstay as established by the 15th National Congress of the Communist Party of China (CPC) is a basic economic system of China at the primary stage of socialism. At the Second Session of the 9th National People's Congress (NPC), this principle was written into the fundamental law of China. With the opening of some monopoly trades, such as infrastructures and public utility, non-public economic sectors have got broader space for development. At present, the gross domestic product (GDP) created by individual and private economic sectors is considerable. Qu Sufen, NPC deputy and mayor of Taizhou city, Zhejiang Province, said that non-publicly owned enterprises contribute over 85 percent of Taizhou's industrial and commercial tax revenue and comprise 90 percent of employees.

In order to change government functions and improve efficiency, the State Council has drastically streamlined the administrative structure, reformed the administrative examination and approval system. By doing so, the government can devote more energy to the establishment and perfection of the macro-control system, deepen reforms of the finance, taxation, banking, investment and fund-raising systems, intensify financial and taxation supervision and control and rectify market economic order in a big way, thus create an institutional environment featuring fair competition for economic development. To ensure priority to efficiency while giving due consideration to social fairness, this term of government has established a framework of a brand-new social security system which has covered most enterprises and their staff members and workers in cities and towns. Reforms of systems in the aspects of food circulation, rural tax-for-fee, housing and foreign trade systems are deepening.

Against the background of economic globalization, world markets are being joined together. To seek the best allocation of resources worldwide, it is necessary to make full use of international and domestic resources and markets. During the five years, the export-oriented economy has developed rapidly, the State's foreign exchange reserves have increased by big margins. After several years of effort, China finally joined the WTO. In the first year after WTO accession, we achieved quite satisfactory achievements, import and export trade volume in the year exceeded US$600 billion; more than 400 out of the world's 500 largest transnational corporations have come to invest in China, Our country has jumped to become a country that has attracted the most foreign direct investment (FDI). The government standardizes its action in accordance with common international practice, and raises the level of administration according to law; enterprises build up their muscles, get acquainted with rules, adjust their strategies and study measures, ready to meet greater challenges.

Despite enormous change in internal and external environment, the advance of reform and opening up has never ceased, only by persevering in reform and opening up, is it possible to solve problems arising in development.

Each of the new breakthroughs in reform and opening up has not been achieved easily. Over the past five years, the domestic and international situations have been complicated and volatile. Notwithstanding, the Party Central Committee and the State Council, composed and calm, always firmly grasped the orientation an rhythm of China's advancement, the advance of reform and opening up has never ceased, but instead has always proceeded in a gradual and orderly manner in line with the established goal.

Lin Yifu, CPPCC member and noted economist, heartily exclaimed that under the circumstance of universal depression of the world economy, it is terrific that China could have brought about an average growth rate of 7.6 percent over the past five years. The world still does not have a very effective way to deal with deflation, our central government remained calm in the face of changes and took decisions at the opportune time. On the premise of persisting in reform and opening up, it correctly exercised its functions and conducted macro-control with stable monetary policy and proactive fiscal policy and thus guaranteed the sound development of the Chinese economy. This is an expression of the growing maturity of our government.

Practice has proved that only by exercising a general command of the whole situation with reform, is it possible to solve the various kinds of difficulties and problems encountered in the course of development. Proceeding from reality, making overall advancement, braking through key points, advancing step by step and paying attention to the establishment and innovation of systems-These are the successful experiences we have accumulated in years of reform and opening up. Only when it moves on the two wheels of reform and opening up, can the train of China's economy be running fast all the way through winds and rains.

When we are taking pride in the fresh progress made in reform and opening up, we must also see soberly that in our present economic life, we still face many difficulties and problems: reform of SOEs is far from being completed, the growth of the factor market is still lagging, the increase of farmers' income is slow, employment pressure is tremendous, the relations of income distribution is yet to be straightened out, the functions of government departments have not been transformed and put in place, at the beginning of China's WTO entry, we encountered some new problems, more grim challenges are yet to come, We still have a long way to go to bring the initially established socialist market economic system to perfection.

Gao Shangquan, member of the 9th CPPCC National Committee and president of the China Economic Structural Reform Research Society, said that to achieve the magnificent goal of building a well-off society in an all-round way, we must make substantive breakthroughs in some important aspects of reform, only then can we remove the institutional obstacles to the speedy and steady development of China's economy and society. The 16th CPC National Congress has sketched the contour for future reform and opening up: upholding and perfecting the basic economic system, deepening reform of the State-owned asset management system; strengthening the modern market system, intensifying and perfecting macro-control; deepening reform of the distribution system, strengthening the social security system; persisting in the integration of "bringing in" and "going out", and comprehensively raising the level of opening up to the outside world.

The objective has already clearly set and the tasks are quite heavy. We firmly believe that under the leadership of the CPC Central Committee with Hu Jintao as the general secretary, we can surely write a new chapter on reform and opening up in the journey to the realization of the great rejuvenation of the Chinese nation by pooling the strength and wisdom of all Chinese people, breaking down all ideological concepts that hold up development, and doing away with all institutional defects that saddle development.

By People's Daily Online

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