Chinese Premier Zhu Rongji delivered a report this morning at the second session of the Ninth National People's Congress (NPC), the nation's highest law-making body.
The 32-page report, totaling more than 14,000 Chinese characters, is divided into ten parts:
*Outline of Premier Zhu's Government Work Report
-- Review of the work in 1998 and general requirements for the work in 1999;
-- Continuing to expand domestic demand and implementing a pro- active fiscal policy;
-- Promoting all-round development of agriculture and the rural economy;
-- Redoubling efforts to promote the reform of state-owned enterprises;
-- Working to successfully carry out financial work and preventing and defusing financial risks;
-- Doing everything possible to expand exports and utilizing foreign funds effectively;
-- Implementing the strategies of invigorating China through science and education and maintaining sustainable development;
-- Implementing the basic principle of rule of law and building an honest, diligent, pragmatic and efficient government;
-- Working hard to promote the great cause of peaceful reunification of the motherland;
-- The international situation and diplomatic work.
*1998's Goal for Growth Basically Reached
Chinese Premier Zhu Rongji said March 5 that in the face of a complicated and grim economic environment at home and abroad over the past year, people of all ethnic groups in China worked hard together, surmounted numerous difficulties and scored great achievements in carrying out reform and opening up policies and in the socialist modernization drive.
"The objectives for reform and development defined at the beginning of the year were basically attained," Zhu announced.
The premier made the remark while delivering a report on the work of the government to the National People's Congress now in session in the Chinese capital.
Last year the national economy continued to grow at a relatively rapid speed, with the gross domestic product for 1998 increasing by 7.8% over the previous year. He noted that the increase was slightly lower than the targeted figure of 8%, but attaining 7.8% was not easy given the impact of the Asian financial crisis and catastrophic floods in China.
"To protect ourselves against the effects of the Asian financial crisis, we adopted a policy of increasing investment and boosting domestic demand at the beginning of last year. However, the crisis became broader and deeper than we had anticipated, exerting more of an impact on China than we had expected," he said.
According to the premier, in the first half of 1998, the economic growth rate slowed down because of a sharp decline in export growth and inadequate domestic demand to keep the economy growing.
To address this problem, the central authorities resolutely made a decision to adopt a proactive fiscal policy. After the National People's Congress approved necessary changes in the budget for 1998, the State Council issued an additional 100 billion yuan worth of treasury bonds for investment in infrastructure.
As a result, growth of fixed-asset investment in state-owned enterprises was much more rapid in the second half of the year, increasing by 19.5% for the year as a whole. National fixed-asset investment in all segments of the economy increased by 14.1%. This considerable increase in investment played an important role in fueling economic growth.
Zhu said that flooding of a severity seldom seen before in the valleys of the Yangtze, Nenjiang and Songhua rivers caused a direct economic loss of over 200 billion yuan. Many mines and industrial enterprises suspended operations and some sections of the Yangtze were closed to navigation for more than a month, he said. All this greatly affected production, development and domestic and foreign trade, he added.
Under the strong leadership of the Party and the government, soldiers and civilians struggled together and won a great victory in the battle against the floods, minimizing losses, he said.
The premier said that the work of resuming production and rebuilding after the floods proceeded smoothly. Despite these major calamities, harvests were generally good, he noted.
"When many neighboring countries devalued their currencies by a large margin, we weighed the pros and cons and decided not to depreciate the Renminbi" he said.
In order to avoid serious fluctuations in the level of foreign trade and the utilization of foreign funds, the government adopted a wide range of policies, he said. These included: encouraging exports, attracting foreign funds, and stepping up efforts to crack down on smuggling and other illegal practices such as obtaining foreign currency under false pretenses, not turning over foreign currency owed to the government and illegal arbitrage, he said.
As a result, China's foreign exchange reserves increased slightly. "Experience has shown that it was entirely correct not to devalue the Renminbi," he said. "A stable Renminbi contributes not only to economic stability and development in China but also to financial and economic stability in Asia and even in the world as a whole."
*Smooth Going for Enterprise, Government Reforms
In 1998, China continued to carry out successfully reform programs that include restructuring state-owned enterprises and streamlining the government, and the reform programs played a positive role in building a socialist market economy and promoting economic and social progress.
Chinese Premier Zhu Rongji made the remarks in a government work report he delivered at the Ninth National People's Congress now in session in the Chinese capital.
Regarding reform of state-owned enterprises, the premier said that last year fresh progress was made in efforts to restructure and reorganize the textile, coal, petroleum and petrochemical, metallurgical and national defense industries. Some preliminary results were seen in the State Council's experiment to assign special inspectors to some key enterprises of the state, he said.
According to the premier, greater efforts were made throughout the country to ensure a minimum standard of living for laid-off workers and to reemploy them. Most of these workers registered with reemployment centers and received basic allowances. Over 6 million laid-off workers were reemployed in 1998. Retired employees from enterprises for the most part received their pensions on time and in full.
Reform of the grain distribution system progressed steadily, and state-owned enterprises engaged in grain purchasing and storage basically stopped operating at a loss. Great strides were made in efforts to reform the financial system and guard against financial risks.
The institutional reform of the State Council progressed smoothly and its objectives were attained. The number of departments of the State Council was cut from 40 to 29 and the number of internal divisions within the departments were reduced by one-quarter. Over 200 functions were delegated to enterprises, intermediary organizations or local authorities.
"With its staff cut by half, the system and style of work of the State Council assumed a new look," the premier said.
Zhu said that the central authorities decided that the army, the armed police and the procuratorial, judicial and public security institutions should no longer engage in business and that Party and government institutions at the central level should cut all business ties with economic entities set up by them and enterprises under their jurisdiction. That policy decision has been carried out, he said.
Further achievements have been scored in efforts to strengthen and reform the Chinese People's Liberation Army, and the work of reducing the country's armed forces by 500,000 men is going smoothly, he said.
Programs for reforming the urban housing system and the system of medical insurance for urban workers are being implemented. A system to ensure a minimum standard of living for city residents has been established in most cities, according to Zhu.
*On Science, Education, Social Development
Last year, China made further progress in the fields of science and technology, education and all other social undertakings, Premier Zhu Rongji said in a government work report he delivered at the National People's Congress now in session in the Chinese capital.
The premier said that the State Council has established a State Leading Group for Science and Technology and Education to give them more effective guidance and that the government increased investment in these areas from the central finance.
Further progress was made in efforts to establish an innovation system for science and technology. More advances were made in research in key technology areas. Many major state science projects were launched and basic research strengthened. Progress was made in strengthening the various types of education at all levels, he said.
Reform of the management system for higher education and its restructuring were speeded up; goals set for 1998 in terms of making nine-year compulsory education more or less universal throughout the country and in basically eliminating illiteracy among young and middle-aged people were met.
He said development of ecological projects in key areas and development of projects to protect natural forests in the upper reaches of the Yangtze and the Yellow River are in full swing. Initial results have been achieved in curbing pollution in the Huaihe River and Taihu Lake, he said. "We intensified our efforts to improve and protect the environment," the premier said.
Further achievements were scored in literature and art, the press, publishing, radio, film and television, social sciences, family planning, public health, sports and all other social undertakings, the premier said.
Regarding efforts to push ahead with development of democracy and a legal system, the premier said governments at all levels improved their abilities to perform their official duties in accordance with law.
"We intensified our efforts to strengthen democracy at the grassroots level in rural areas," he said, adding that efforts to improve all facets of public security produced positive results and that social stability was maintained. Fresh progress was made in the effort to build a clean and honest government and in the struggle against corruption, the premier said.
*Continued Active Fiscal Policy Urged
Premier Zhu Rongji said China will try to achieve a relatively fast economic growth this year through increasing domestic demand and continuing to implement an active fiscal policy.
The premier said, "The external economic environment we are facing this year is still quite grim." Domestically, it will be hard for the time being to greatly expand consumer demand.
Therefore, he said, it is imperative for financial departments to continue selling long-term national bonds to commercial banks, mainly for expanding infrastructure development, as well as to use various means to expand financing channels and encourage and guide organizations, individuals and other segments of society to increase investment.
"Aided by the expansion of the economy and increases in tax revenues, we will be able to repay our debts and reduce fiscal deficit," he said.
The premier said that under normal circumstances, increasing the deficit to spend more on development would bring about inflation, and "we have learned quite a few profound lessons in this regard." However, under current special conditions, there is little possibility of such a danger, he said.
According to the premier, total bank savings deposits are now quite large, so diverting part of these savings into infrastructure investment by issuing financial bonds will not lead to excessive money supply.
In addition, there is an ample supply of grain and other major agricultural products, manufactured consumer goods and capital goods, and commodity prices are fairly stable, so a moderate increase in the deficit and expansion of the size of the national debt will not result in inflation if the funds are properly used, he said.
The state increased the national debt by 100 billion yuan last year to strengthen investment in infrastructure development and banks expanded their lending by a corresponding amount, yet the volume of currency issued during the year was still some 50 billion yuan less than the target figure set at the beginning of the year, he said.
"Generally speaking," he noted, "both retail prices and consumer prices dropped compared with those in the previous year."
In this year's state budget the deficit is set at 150.3 billion yuan, more than last year's figure, but the bond issue scale has not increased. On the national level, the ratio of the deficit plus the total value of outstanding national bonds to the gross domestic product of the same year is still below the internationally accepted alarm level and is therefore sustainable, he said.
The premier stressed that funds raised for development must be rationally used, noting that funding should be focused on projects in agriculture, forestry, water conservation, transportation, communications, urban public utilities, environmental protection and other infrastructure projects, including the upgrading of power grids in urban and rural areas and the building of grain depots, with priority given to projects already under way and due emphasis placed on central and western regions.
Technology upgrade projects for existing enterprises should promote economic restructuring and should mainly rely on bank credit for funding with necessary support from the sale of financial bonds, he said.
"They must not be aimed at mere expansion of production capacity or the launch of redundant projects. They must be projects that meet market demand and will increase product variety, improve quality and economic performance," he said.
As a weak link in the national economy, infrastructure in general poses no duplication problems, Zhu said. Developing infrastructure facilities not only helps boost economic growth now but also adds to the potential for future economic development, he said.
The premier stressed that infrastructure projects should, first of all, be placed under overall planning, rationally distributed, well selected and meticulously examined, and no project should be launched rashly.
In addition, he said, "The quality of projects must be guaranteed." He noted that recently a number of accidents have occurred due to serious quality problems in certain projects and resulted in heavy losses to the state. "This deserves our close attention," he said.
The premier called for implementing the Construction Law in real earnest.
Efforts will be made to reform, reorganize and standardize the building market and to vigorously implement the legal person responsibility system for projects, and the systems of public bidding and monitoring for projects, he said.
He pledged to ban multi-level contracting and illegal subcontracting. "We should work earnestly to implement the leadership responsibility system at all levels, combining the use of economic, legal and administrative means and supervision by public opinion to ensure project quality; persons and leading cadres who are responsible for accidents must be subjected to strict investigation and punishment, up to and including criminal sanctions," he said.
Misappropriation and diversion of funds raised from state bond issues will be strictly prohibited, he said. The government will never allow the use of such funds to make up for shortages in routine expenditures, to initiate other construction projects or even to finance the development of office buildings and hotels, he said.
He said that major projects should be subject to special and follow-up auditing. "We should strengthen law enforcement and severely punish corruption in construction activities in accordance with law," he said.
He said that the government should intensify tax collection and management, plug loopholes and clear up and collect taxes in arrears to ensure that taxes are levied according to law and that all due taxes are collected.
The government will advocate hard work and plain living and building the country through thrift and diligence, oppose extravagance and waste, cut all unnecessary administrative expenses, and ensure funding for priority areas. Financial and economic discipline should be strict and management of extra-budgetary funds should be standardized and tightened, he said.
The government will continue to optimize the financial and taxation systems through reform, focusing on an overall review and standardization of the collection of charges and gradually " transforming administrative fees into taxes."
"This is a major move designed to straighten out the way these funds are distributed, enhance our macro-control capability and improve the conduct of the Party and the government," he said.
This year, he said, the government will make breakthroughs in reform of transport and vehicle fees, then use the experience gained for carrying out further reforms.
The premier pointed out that the decision to implement a proactive fiscal policy is one that has been taken under special circumstances. "In the medium and long term, we should still adhere to the principle of maintaining a basic balance between revenue and expenditures, follow a moderately tight financial policy, and strictly control and gradually reduce the deficit," he said.
*On Measures to Increase Consumer Demand
The Chinese government will take effective measures to expand consumer demand as well as capital spending in 1999 to stimulate economic growth, Premier Zhu Rongji said in a government work report he delivered at the 9th National People's Congress which begins its annual session in Beijing March 5.
He pledged to work through various channels to increase the incomes of both urban and rural residents, especially those with low incomes, promote the growth of consumer credit services, accelerate reform of the urban housing system and encourage residents to buy houses and major durable consumer goods.
Meanwhile, the government will encourage people to make more use of commercial, cultural, entertainment, sports and tourism facilities and expand commercial services in these areas, Zhu said.
The government will invigorate the market, especially the rural market, and encourage the production and supply of commodities suited to conditions in rural areas.
*On Agriculture, Rural Economy
In 1999, the Chinese government will stabilize its basic rural policies, increase investment in agriculture and increase farmers' income.
Premier Zhu Rongji made the pledge in a government work report he delivered at the 9th National People's Congress, which begins its annual session in Beijing March 5.
The government will consolidate and improve the two-tier system of unified and independent management based on household contracts, he said.
He listed five concrete measures, namely, adjusting and optimizing agricultural structure; reinforcing capital construction in agriculture with focus on water conservancy; actively promoting the restructuring of the grain distribution system to activate the circulation of farm products; adjusting the restructuring of township and village-based enterprises and speeding up the construction of small towns; and alleviating burden on farmers and maintaining stability in rural areas.
Regarding the adjusting and optimizing of the agricultural structure, Zhu said, because of good harvests for several consecutive years, the supply of many types of farm produce has exceeded demand, causing their prices to fall and slowing down growth in incomes for farmers.
This is a new problem occurring against a backdrop of increased agricultural production and improvements in people's living standards, he said, pointing out that China's agricultural development has entered a new stage following two decades of rural reform.
"In order to meet the needs of this new stage, we must shift the focus of our rural work to restructuring and optimization efforts and to the improvement of product quality and economic performance.
"While maintaining the overall level of grain production this year, we should encourage farmers to produce more high-quality and more marketable grain varieties," he said.
The government should rationalize the distribution of cotton farms by stabilizing cotton-growing areas in Xinjiang and reducing those in Hebei, Shandong and Henan provinces and the Yangtze River valley. China should also adjust the pattern of production in the livestock industry, fishery industry and other sectors of greater agriculture and improve product quality to keep up with changes on the market, he said.
"We should vigorously work to develop agriculture through science and education, strengthen the development and use of biotechnology, information technology and other high and new technologies, accelerate breed improvement and spread the use of advanced, applicable techniques which can increase production and income," he said.
Talking about the strengthening of capital construction in agriculture with focus on water conservancy, Zhu said allocations for investment this year in water conservancy projects and projects to protect natural forests in the central budget will again increase by a sizable amount; allocations in local budgets for this type of investment should also increase.
He warned, "We must be fully prepared to prevent major flooding and combat heavy disasters. Before the flood season comes, we must repair projects that were previously destroyed by floods, reinforce dikes in key areas of the Yangtze River, the Yellow River and other big rivers and shore up reservoirs in poor condition in order to ensure safety in the high water season."
China needs to strengthen urban flood-prevention projects and sea dikes and lose no time in building projects to tame major rivers, he said, noting that the country should develop farmland improvement and water conservancy projects which involve the general public, encouraging farmers to work collectively or individually to build and operate small-scale water conservancy facilities in a variety of forms.
The premier said that China should pay close attention to making planned and sparing use of water and spreading the use of various types of water-saving techniques. "We must work to prevent and control pollution and protect water resources," he said, adding that, while paying due attention to preventing floods, the country should prevent and fight drought as well.
He went on to say that China must put in practice a strict land management system and take measures to protect forest resources. Logging in natural forests in the middle and upper reaches of the Yangtze River and the Yellow River will be stopped, while in forest areas in the northeast and Inner Mongolia and in other natural forest areas, logging will be either restricted or terminated, according to the premier.
He pledged that the government must not allow any more land reclamation at the expense of forest land or land reclamation which destroys lakes. "In places with excess reclamation of this kind, we should restore reclaimed land to forests, grasslands or lakes step by step. We should continue to do a good job of rebuilding following the floods. We need to develop large-scale afforestation and grass-growing projects and successfully carry out major ecological projects and control soil erosion so that future generations can enjoy green mountains and rivers," he said.
This year, the Chinese government will continue to implement the three policies of purchasing surplus grain from farmers without limit at protective prices, of having collection and storage enterprises sell grain at a profit, and of ensuring closed operation of grain purchase funds -- and speed up reform of state- owned grain enterprises.
"We must do a good job of managing grain purchase markets, invigorating grain sales markets and tightening supervision over them," he said.
In accordance with the principle of separating government functions from enterprise management, grain collection and storage enterprises should become independent in operation and be made responsible for their own profits and losses so that they truly change the way they operate, improve their services and make it more convenient for farmers to sell their grain, he said.
"We need to further reform the purchase and sales system for cotton to ensure that the price of cotton is governed by the market under the guidance of the government," he said.
Zhu said that work will proceed to restructure town and township enterprises and promote the development of small towns.
Development of town and township enterprises will be combined with the promotion of industrial management of agriculture. Efforts will be made to develop the processing of grain and other farm produce to stimulate the conversion of grain into other products and increase its value, he said.
Accelerating the development of small towns is a major strategy for economic and social development, he noted, saying, "We should do a good job of carrying out the experiment with reform of the household registration system in small towns and formulate investment, land and real estate policies to support small town development."
In developing small towns, it is necessary to make scientific plans, aim for rational distribution, ensure the economical use of land and work to protect the ecological environment, avoiding rushing headlong into action, he said.
He went on to say that China should lighten burdens on farmers and maintain rural stability. "The pressing task at hand is to stop the practices of the arbitrary levying of charges, arbitrary fund-raising, arbitrary imposing of quotas and arbitrary levying of fines, resolutely canceling all such charges the state has ordered to be banned," he stressed.
The premier made it clear that farmers will still be subject to a fixed number of rational and limited charges and fees which will remain unchanged for three years. "We should lose no time in formulating and implementing plans for changing these charges and fees into taxes, protect the legitimate rights and interests of farmers and completely resolve the problem of heavy burdens they bear," he said.
Efforts will be made to expand democracy at the grassroots level in rural areas, promote the self-government of villagers and ensure that village affairs are made known to villagers, he said, calling on rural cadres at the grassroots level to change their work style and maintain close ties with the masses.
He said the government should step up its efforts to fight poverty. "This year, we should strive to decrease the number of poor people in rural areas by 10 million or more and ensure that those who have shaken off poverty will not become poor again," he said.
*On Reform of State-Owned Enterprises
Premier Zhu Rongji said that the goal set by the Party Central Committee to get most large and medium-sized state-owned enterprises operating at a loss out of their plight within three years will be reached.
The premier expressed his confidence in a government work report he delivered at the Ninth National People's Congress, which begins its annual session in Beijing March 5.
The year before, the Party Central Committee proposed that within three years, through reform, reorganization, upgrading and improved management, most large and medium-sized state-owned enterprises operating at a loss should get out of their plight.
"This is a crucial year for achieving the objective," he said. "We are now clear about the general approach and principles and policies for reform of state-owned enterprises."
A group of enterprises have developed and grown strong in the midst of market competition and some enterprises have gotten out or are now getting out of difficulty, accumulating a great deal of useful experience along the way, he noted.
"So long as we work together and do solid work, we are confident that we can achieve our reform and development objectives for state-owned enterprises," he said. "The most important thing for us now is to unify our thinking and unswervingly carry out principles and policies formulated by the Party Central Committee."
This year governments at all levels should focus on the following objectives, he said:
First, redundant development should be stopped and industrial restructuring and reorganization accelerated. With the exception of a number of projects designed to raise the technological level of production, upgrade products and manufacture marketable products, governments at all levels should stop examining and approving industrial development projects and banks should stop granting loans to them.
The government should continue to reduce excess production capacity in the textile, coal, metallurgical, petrochemical, building materials, machine-building, electronics and light industries. "We should resolutely eliminate small enterprises which are technologically backward, waste resources, produce inferior products and cause serious pollution," he said.
In addition, the premier said, following the principle of breaking up monopolies and encouraging competition, the government should form technologically advanced, competitive enterprise groups through association, merger and reorganization. He said, " If we persist in this effort for a few years, we shall gradually form a mechanism for selecting the superior and weeding out the inferior, thus creating a good macro environment and good market conditions for the development of enterprises."
Second, the government should continue to guarantee the basic needs of workers laid off from state-owned enterprises and help them find new jobs. "This is a major task in deepening reform of enterprises and an important measure for maintaining social stability," he stressed.
He pointed out that success in this endeavor hinges on funding. The government should continue to finance this effort by splitting the cost evenly between enterprises, society and government financial departments, he said.
The premier said that any shortage in funding from enterprises and society will be provided by financial departments. "The central finance is responsible for funding for enterprises under the central government, and local budgets are responsible for funding for enterprises under local governments," he noted.
This year all local financial departments must restructure budgeted expenditures to make ample funding for this purpose available as a top priority, Zhu said, adding that transfer payments from the central finance will be used to give a measure of financial support to the provinces and autonomous regions which are in financial straits.
"We should strengthen vocational training in various forms, open up new avenues of employment, help workers change their attitude toward employment and strive to assist as many laid-off workers as possible in finding new jobs," he said.
According to the premier, after laid-off workers are re- employed, they should sever labor relations with their original enterprises. Laid-off workers who fail to find new jobs after three years of unemployment should also sever labor relations with their original enterprises and apply to a social security institution to obtain unemployment insurance benefits, he said.
He said that urban laid-off workers who cannot find new jobs after receiving unemployment insurance for two years should go to a department of civil affairs to obtain a minimum allowance. These "three guarantee measures" constitute an important part of the social security system with Chinese characteristics under current conditions, he said.
The government should improve the old-age insurance system, ensure that payments for old-age pensions for retired workers of enterprises are made on time and in full and clear up pension payments in arrears as quickly as possible, the premier said.
He said that the government will expand the coverage of old-age insurance, and that state-owned enterprises, urban collectively- owned enterprises, private enterprises and foreign-funded enterprises should participate in the old-age insurance scheme in accordance with the usual international practice.
"We should work hard to raise the collection rate. We should improve the system of overall planning for old-age pensions at the provincial level and improve the management of pension plans," he said.
Third, the government should promote a separation of the functions of the government from those of the enterprise, improve the supervisory system and consolidate and improve the leadership of enterprises, he said.
The various departments of the State Council have ended administrative relationships with enterprises under their jurisdiction and no longer exercise direct management of them, he said, noting that this year local governments should also carry out corresponding reform according to the same principle.
In addition, he said, the state must tighten its supervision over enterprises to protect the owners' rights and interests and the safety of state-owned assets. This year the government should continue to send special inspectors to key state-owned enterprises, he said.
The key to the proper operation of state-owned enterprises is to improve their leadership, Zhu stressed, saying that it is necessary to adhere to the principle of choosing personnel with both political integrity and professional competence.
The government should rely on the working class wholeheartedly, he said. "Workers should play their role in exercising democratic supervision, and we should adhere to the system of evaluating the leaders of enterprises at workers' conferences. We should improve the work of evaluating the leadership of enterprises, and if the leadership of an enterprise cannot meet set standards, it should be reorganized within a specific term."
He stressed that leaders of enterprises operating at a serious loss because of poor operation and management will be shown a yellow warning card in one year and be dismissed from their posts in two years. The government will resolutely punish in accordance with law corrupt officials who embezzle funds and accept bribes, he said.
He went on to say that those whose enterprises yield good economic returns and make great contributions to society should be given rewards.
Zhu urged the establishment of a unified accounting system and a modern enterprise management system throughout the country.
The government should continue to relax control over and invigorate small state-owned enterprises in various ways, he said, noting that selling them off should not be the main way to reform them.
"We must resolutely stop erroneous practices such as selling them off for a nominal price while in fact simply giving them away, half selling them off and half giving them away, evading bank debts and state taxes and not making proper arrangements for laid- off workers," he said.
In addition to promoting reform of state-owned enterprises, the government should adopt policies and measures to encourage and support a sound development of collectively-owned, individual proprietorship and private enterprises, he said.
*On Preventing Financial Risks
Chinese Premier Zhu Rongji called for improving China's financial order and minimizing financial risks.
Delivering a government work report to the annual session of the National People's Congress that opened in Beijing March 5, Zhu outlined the following four guidelines for financial work in years to come:
-- to improve the country's financial system by separating the operation and administration of the banking, securities, insurance and trust sectors, and implement a responsibility system for financial supervision and control;
-- to accelerate reform of state-owned commercial banks, ensure autonomy in the operation of banks, continue to make progress in the establishment of bank branches and sub-branches based on economic division and workloads, streamline institutions, cut the size of their staff, tighten internal control, and gradually set up financial assets management companies to handle non-performing loans now held by banks while implementing a strict responsibility system for the quality of new loans;
-- to do a good job of operating non-commercial banks, carry out state industrial policies and raise efficiency in fund utilization;
-- to standardize and safeguard the financial order according to law, inspect and rectify non-banking and local financial institutions and reduce the risks of financial institutions; to promote a steady development of other commercial banks and credit cooperatives in both urban and rural areas in the process of reform; to earnestly implement the Securities Law to standardize and develop the securities market, rectify and standardize the insurance market to promote a sound development of the insurance industry, deal severely with actions of financial institutions that violate regulations or codes of conduct, and punish financial crimes.
The premier said that China's finances have operated smoothly and that substantial progress has been made in financial reform.
"With the impact of the Asian financial crisis widening, the world's financial markets in turmoil and deep-seated problems in our own country's economic activities gradually emerging, improvement in the performance of China's financial sector is of vital importance to the overall interests of reform, development and stability," Zhu said.
Banks should work hard to improve their financial services, provide more services and use the lever of bank credit to stimulate domestic demand and exports with a view to supporting growth of the national economy, he said.
*Premier Calls For Expanding Exports
China will try every means possible to achieve an increase in exports and use more foreign funds, Premier Zhu Rongjin said in a government work report he delivered at the Ninth National People's Congress, which begins its annual session in Beijing March 5.
Zhu said China will continue to carry out the basic state policy of opening to the outside world, work to open up more markets abroad and strive to expand foreign trade and make more use of foreign funds.
"This is of vital importance to achieving sustained economic growth this year, maintaining equilibrium in our balance of payments and keeping exchange rates for Renminbi stable," he said.
The country will do its utmost to expand exports by improving the quality of export products, diversifying market outlets and adopting internationally accepted policy measures such as granting export credits and tax refunds, he said.
It will also concentrate on increasing the export volume of machinery and electronic products, products with high added value and high-quality and famous-brand products.
Great efforts should be made to promote general trade and to improve and strengthen the management of processing trade, and more producers will be allowed to engage in export on their own to encourage them to increase export volumes, Zhu said.
Through funding, technology and personnel training, the country will help and encourage qualified enterprises to develop processing trade overseas in places with potential markets, with a view to promoting exports, he said.
He urged foreign trade firms to press forward in spite of difficulties, deepen reform, improve management, improve economic performance and strengthen competitiveness.
China will also increase necessary imports, improve trade balance and integrate importing with the adjustment and upgrading of domestic industries and technology imports, Zhu said, noting that efforts will be made to develop international tourism and increase foreign exchange earnings through non-trade channels.
Talking about foreign investment, the premier said the country will take full advantage of its social and political stability and sound macroeconomic conditions to try to absorb as much foreign investment as possible, particularly investment from famous transnational corporations, and improve the way foreign funds are used.
It will properly guide the orientation of foreign investment and optimize the utilization of foreign funds in terms of their structure and geographical distribution. "We will continue to improve the environment for foreign investment, gradually open more fields to foreign investment and improve our management of foreign-funded enterprises in accordance with law," Zhu said.
He said the central government will strengthen overall management of foreign debts, work to control their scale, optimize their structure, tighten supervision and improve early warning methods. It will strengthen the ability to repay foreign debts.
He pledged to keep exchange rates for Renminbi stable, saying that China will strengthen management of foreign exchange revenue and spending, maintain equilibrium in its balance of payments and keep foreign exchange reserves stable.
It will strengthen the system of exchange settlement and sales, ban illegal foreign exchange transactions and severely deal with all cases of obtaining foreign exchange under false pretenses, not turning over foreign currency owed to the government and illegal arbitrage of foreign exchange.
"We should strengthen the forces engaged in the fight against smuggling and extensively and persistently combat smuggling," the premier said.
*Premier Stresses Role of Science and Education
China will continue to advance science and technology, promote scientific, technological renovation and develop education.
Delivering a government work report to the annual session of the National People's Congress that opened in Beijing March 5, Premier Zhu Rongji said implementation of the strategy of developing the country by relying on science and education is a major strategy for ensuring vitality in the economy and for modernizing the country.
"This also represents an extremely important task for the government of this term," he said.
He said the most important things to do are to vigorously promote reform, accelerate the establishment of a state innovation system, integrate science and technology with the economy, speed up the translation of scientific and technological advances into practical productive forces and widely apply them.
Enterprises should be encouraged to engage in technological progress to enhance their technological development and innovation abilities. While giving more guidance to major industries and key enterprises in their technological development, the country will upgrade traditional industries with high and new technologies, speed up the process of using domestically-produced key equipment in place of imports and the application of high and new technology to production and cultivate new growth areas in the economy such as the information industry.
According to the premier, China will promote the integration of production, teaching and research, deepen reform of the management of research institutes by introducing competition and encouraging scientific and technical personnel in research institutes and institutions of higher learning to work with enterprises.
"Institutes engaged in applied research should be encouraged to become science-and-technology enterprises independently or in cooperation with others, thus remedying the problem of most scientific and technical personnel being divorced from enterprises and markets," Zhu said.
He noted China will lose no time in formulating and implementing industrial and technical policies. Efforts should be concentrated on tackling a number of key technological problems.
Research on how to utilize scientific and technological advances in production should be strengthened and support must be given to developing medium-sized and small science-and-technology enterprises.
More should be invested in research projects which have potential markets and will yield good economic returns. Efforts should be made to improve the protection of intellectual property rights, the premier said.
He stressed that China will try to strengthen basic research, concentrate efforts to successfully implement plans for key basic research projects and try to make continued progress in fields where the country has been doing well and promote sustained progress in science and technology.
Continuous efforts should be made to improve working and living conditions for scientific and technical personnel, and to establish and improve mechanisms for training and utilizing scientific and technical personnel and for developing qualified personnel.
Zhu Rongji said the strategy of developing the country by relying on science and education is based on education.
"We should continue to make education a strategic priority," he said. "We will be working to make nine-year compulsory education available in more areas this year so that more than 80% of the total population is covered and we will reduce the number of illiterate young and middle-aged people by about 3 million."
China will actively work to develop vocational and adult education in various forms, improve the overall quality of students by ensuring that they improve in terms of their moral, intellectual and fitness level as well as in their appreciation of aesthetics.
"The government will be increasing investment in education in accordance with law, making good use of educational resources and working to raise the overall efficiency of schools," the premier said.
Zhu said the government needs to do a number of things to improve education. First, it should intensify reform, that is, to modify concepts of education. Reform of the management system for education should be made and course contents and teaching methods renovated.
Following a scheme involving joint administration, adjustments, cooperation and mergers, the government will further modify the existing educational system under which schools are run by specialized departments of the government, he said.
"We will be speeding up transition to a new system of management for institutions of higher learning under which they are operated at both the central and provincial levels, with most operated by provincial governments under the guidance of the state' s macro-control policy."
"We should deepen reform of the system of internal management for institutions of higher learning and other kinds of schools and explore ways for non-governmental sectors to run schools," Zhu said.
"We should improve the quality of education in all kinds of schools at all levels, especially primary and secondary education. We should be strict with standards for teachers, and improve the political and professional quality of teachers."
Zhu called for more attention to be paid to ideological, political and moral education by educating students in Marxism- Leninism, Mao Zedong Thought and particularly Deng Xiaoping Theory to instill in them socialist ideals and beliefs to improve the overall quality of the new generation.
*On Sustainable Development
China will carry out a sustainable development strategy and protect natural resources and the ecological environment while developing its national economy.
Premier Zhu Rongji elaborated on the strategy in a government work report he delivered at the Ninth National People's Congress, which begins its annual session in Beijing March 5.
"We should always bear in mind our responsibility to the people and our future generations...improving planning for resources and their management, avoiding waste of resources for short-term gains, protecting resources and making a more comprehensive use of resources," he said.
Efforts should be made to enhance the public awareness of the importance of environmental protection and investment should be increased to intensify efforts to control and treat pollution in major cities, regions, valleys and sea areas.
The premier stressed that enterprises that discharge pollutants in levels that exceed stipulated standards should remedy the situation within a specified time. Those that fail to do so must be closed down.
He said control of air pollution in Beijing, the capital, is a major task being tackled this year and asked relevant departments of the State Council to give full support to this effort.
"We should do a better job of formulating urban and rural development plans and strictly implement them, punishing those who violate stipulations of the plans," he said.
Zhu called for further efforts to improve the responsibility system for attaining population and birth control targets, adding efforts should be focused on rural areas and the floating population.
"We should work to overcome difficulties and solve problems confronting family planning work at the grassroots level, truly making people responsible for family planning work, and making sure that proper measures are adopted and that adequate funding is available," he said.
According to the premier, China will reform the medical insurance system for urban workers, speed up reform of the internal management system for medicine and public health and develop community medical services.
In rural areas, the target is to make primary health care available and successfully carry out epidemic prevention work in flood-hit areas.
Zhu urged conscientious work to ensure that senior citizens be properly cared for and the disabled be properly cared and treated.
"We should develop nationwide fitness programs to raise the competitiveness of our athletes and gradually improve people's nutritional and physical fitness levels," he said.
March 6, 1999
Source: www.people.com.cn
|
