China to Promote Strategic Restructuring of Economy

Premier Zhu Rongji said on Sunday in Beijng that the acceleration of the strategic restructuring of the economy is urgently required to meet the current need to boost domestic demand and stimulate economic growth.

At the opening meeting of the Third Session of the Ninth National People's Congress -- China's supreme legislature, he noted that the economic restructuring is also essential to adapt to changes in China's economic growth as it moves from one stage to another and to cope with increasingly keen international competition.

Zhu said this restructuring is not only aimed at solving current pressing problems; more importantly, it is aimed at long- term growth, improving the overall quality of the national economy and bringing the economy to a higher level of development.

He went on to say that adjustment and optimization of the economic structure should be market-oriented, rely on scientific and technological advances, and adopt new systems and methods compatible with the development of a socialist market economy.

"We should further stabilize and strengthen agriculture as the foundation of the economy. Because of good harvests in the past several years and the relative surplus of farm produce, it is particularly important that we guard against the tendency to neglect agricultural development," he noted.

China has entered a new stage of agricultural growth and strategic adjustment of agricultural production is an important task at this stage. Farmers should be actively encouraged to transform agricultural production by developing livestock breeding, forestry, aquaculture and production of highly processed grain and other agricultural products.

Varieties of crops cultivated and breeds of livestock raised should be improved so that high-quality products are developed to meet the demand of the market, Zhu acknowledged. Premier Zhu said, "We should vigorously expand housing loans, student loans and major commodity loans for consumers, We should further standardize and develop the securities market so that enterprises will be able to increase the proportion of direct financing." "We should improve the system for issuing and listing stocks on stock markets. We should also support large state-owned enterprises and high and new technology enterprises in their efforts to seek financing by listing on the stock market," he said.

In order to expand the insurance industry we should strictly examine and approve the establishment of insurance enterprises in accordance with the law, he added.

This year, he said, in addition to sustaining the volume of investment from treasury bonds, we should appropriately increase bank fixed asset lending investment and encourage investment by enterprises themselves.

Zhu said, "We should also encourage the collective, private and self-employed sectors to increase investment and improve the investment environment to attract more direct foreign investment. At the same time, we should prohibit the development of redundant projects and increase investment returns by using a combination of economic and legal means supplemented by necessary administrative measures."

Reform measures should be made more transparent; the general public's confidence in the future needs to be strengthened; and more immediate consumption should be encouraged. Some major reform measures closely related to the interests of the general public have already gone into effect, he said.

In implementing them, all localities should take into full consideration the general public's capacity to tolerate the changes and not shift costs formerly borne by the government and society onto the general public, he said.

"We should foster new consumption growth areas such as housing and make housing construction truly a major industry," he said.

Commercial services in areas such as telecommunications, tourism, culture, entertainment, health care and sports should be expanded. Particular emphasis should be given to increasing the income of farmers and expanding rural markets, he said.

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