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Chinese Premier on Reform and Opening-up
Premier Zhu Rongji has said that China's economic restructuring and development hinges on reform.
He made the remark when making an explanation of the Proposal for Formulating the 10th Five-Year Plan for National Economic and Social Development at the Fifth Plenum of the 15th Central Committee of the Communist Party of China (CPC), which closed last week.
"In the next five years or more, we must unswervingly promote reform, widen opening-up, and break through systemic obstacles that hinder the development of productive forces, in an effort to provide powerful driving forces and system guarantees for national economic and social development," the premier stressed.
China can basically realize the objectives of lifting large and medium-sized state-owned enterprises out of difficulties within three years, which is only a temporary target, he said, adding that it is a long-term task and needs arduous endeavors to deepen the reform of state-owned enterprises.
"Most important is to build up a modern corporate system, promote the shareholding system-based transformation, and strengthen scientific management," Zhu said.
An important issue that must be tackled in promoting the reform of state-owned enterprises is to earnestly separate the functions of governments and enterprises. Otherwise, enterprises will never become the principal part of market competition, he said.
Zhu called on relevant government departments and such monopoly sectors as power, railways, civil aviation, and communications to promote management system reform according to the function-separation principle, adopt competitive mechanisms, and reduce administrative approvals in a move to adapt the relationships of governments, enterprises and market to the requirements of a socialist market economy.
"We must adhere to the basic economic system under which the public ownership plays the major part, while economies of diversified ownership seek common development," Zhu said, adding that diversity of ownership structure is subject to the multiple development stages of productive forces.
Only by sticking to diversity, continuing restructuring and improving ownership structures can China adapt to and promote the development of social productive forces, he said, noting that non-public economies are important components of the socialist market economy.
"We should create a fair competition environment for enterprises with different forms of ownership, and support, encourage and guide private and individually-run businesses, especially medium and small science and technology-based enterprises, to develop healthily," the premier emphasized.
Further efforts should be made to open market prices, break up department and sector monopolies and regional barriers in a bid to set up and improve a unified and orderly national market system for fair competition, and fully utilize the role of the market in resource distribution and restructuring, he said.
The premier said that during the 10th Five-Year Plan period, emphasis should be placed on cultivating and developing key market elements, and regulating and developing the securities market.
Corresponding macroeconomic polices should be adopted according to changes in the macroeconomic situation. In the early period of the 10th Five-Year Plan, the proactive fiscal policy and the stable monetary policy should be continued in order to promote investment and consumption, and encourage exports, he said.
"China's opening-up will enter a new stage during the 10th Five-Year Plan period. So we should increase efforts to make preparations for the entry into the World Trade Organization in a bid to raise our competitiveness and gradually expand opening areas," Zhu said.
The premier stressed that the form of foreign capital used could be more varied, such as purchasing, mergers, investment funds, and securities investment, and medium and long-term foreign investment.
Positive efforts should be made to attract foreign multinational corporations to invest in China, set up technological development centers, and participate in reorganization and transformation of state-owned enterprises, he said.
"It is not necessary for China to hold controlling shares in businesses when running joint ventures, other than important ones that concern the state security and economic vitality," he said.
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