Report on the Work of the Government (full text)
(Xinhua)
Updated: 2005-03-15 10:42

Accelerating the development of the eastern region will help increase our national strength and competitiveness, as well as support and stimulate the development of the other regions. The eastern region needs to lead the nation in optimizing the economic structure, deepening institutional reforms and changing the pattern of growth. It should pay more attention to raising the overall quality of its economy and increasing its competitiveness in the international market, and develop a more globally oriented economy. In addition, the region should better balance urban and rural development as well as economic and social development, and strengthen efforts to protect arable land, economize on resources and improve the natural environment. It should also support the development of the central and western regions.

We will adopt even more effective measures to support old revolutionary base areas, ethnic minority areas, border areas and underdeveloped areas to accelerate their economic and social development.

IV. Vigorously Promoting Economic Restructuring and Opening Up

We will work even harder this year to advance economic restructuring. In particular, we will strive to make further breakthroughs in some major areas and key links.

1. Continuing rural reforms. The reform of rural taxes and administrative charges constitutes a profound transformation of the rural economic and social framework. We will exempt the agricultural tax and eliminate all unreasonable financial burdens on farmers, a complete reversal of the practice of farmers paying grain tax to the government for working the land that has lasted more than two millennia. Attaining this goal is only the first step in our reform of rural taxes and administrative charges. We still need to work harder, and we have a long way to go to solidify what we have achieved in this reform. We will resolve new conflicts and problems as soon as they arise in the reform, concentrating on the supporting reforms of government institutions at the town and township level, the rural compulsory education system, and the financial management system for counties and townships. This will be a more important, complicated and arduous task. In addition, we need to deepen the reform of the grain distribution system, rural financial reforms, and the reform of the rural land management system.

2. Deepening the reform of state-owned enterprises. This reform continues to be the central link in economic restructuring, and it must proceed unwaveringly in accordance with the principles and policies set by the Central Committee and the State Council. First, we will continue to strategically readjust the distribution and structure of the state-owned sector of the economy and improve the mechanism for ensuring rational distribution of state funds by increasing investment in some areas and pulling it out of others. We will energetically develop large companies and large enterprise groups that own intellectual property rights, have name brand products and are internationally competitive. Second, we will speed up the transformation of large state-owned enterprises into stock companies. We will improve corporate governance and change the operational mechanisms of enterprises to meet the requirements for a modern enterprise system. We will institute a system for annually assigning responsibility for enterprise performance and a system for holding enterprise executives responsible for their work during their terms of service. We will standardize the system of benefit packages for these executives. Third, the process of relieving state-owned enterprises of the obligation to operate social programs will be accelerated. We will continue to carry out policy-based closures and bankruptcy proceedings for enterprises, and a legal mechanism will be established for declaring them bankrupt. Fourth, we will deepen reform of the power, telecommunications and civil aviation industries and continue reform of the postal and railway systems and urban public utilities by liberalizing market access and instituting competitive mechanisms. We will improve the management system and the methods of oversight for state assets and institute a budget system for the use of state capital. We will standardize the procedures for transforming state-owned enterprises and for transferring state equity to prevent erosion of state assets and protect the legitimate rights and interests of employees. We will deepen the reform of collectively owned enterprises and promote the development of a diversified collective sector of the economy.

3. Encouraging, supporting and guiding the development of the non-public sector of the economy. We will conscientiously implement the State Council's Guidelines for Encouraging, Supporting and Guiding the Development of the Non-Public Sector of the Economy, Including Self-Employed Workers and Private Companies, so as to create a legal, policy and market environment that ensures fair competition for all non-public enterprises. More industries and fields will be opened to non-public capital, and financing channels for non-public enterprises will be widened. Private property and the rights and interests of these enterprises will be protected in accordance with the law. These enterprises will be better served and supervised. They need to improve their quality, and they must abide by laws, regulations and policies of the state, conform to regulations for industrial safety and environmental protection, and guarantee the legitimate rights and interests of their employees.