The First Session of the loth National People's Congress (NPC) of the People's Republic of China opened on March 5 at the Great Hall of the People in Beijing. Premier Zhu Rongji presented the Government Work Report on behalf of the State Council, saying with full confidence, "The 16th National Congress of the Communist Party of China has mapped out a grand blueprint and program of action for building an all-round well-off society in China. Our great motherland is standing at a higher historic point of departure as it sets out on a more glorious long march. No difficulties or obstacles can stop the triumphant advance of the Chinese people. Looking into the future of our motherland, we see a vista of unlimited promise."
   
       When the Premier concluded his speech, the 2,916 NPC deputies participating in the session gave him prolonged applauses in tribute to the achievements of his government whose term of office would soon expire.
   
       The following are excerpts from Premier Zhu's Government Work Report (subheads are ours  Ed.):

       Good momentum was maintained in economic growth and important progress was made in the strategic restructuring of the national economy

       The five years since the First Session of the Ninth NPC make up an extraordinary period. Soon after this government took office, the Asian financial crisis struck, and world economic growth stagnated. Domestically, irrationalities in the industrial structure became critical, and large numbers of workers were laid off from state-owned enterprises. Catastrophic floods kept devastating the country throughout 1998 and 1999. Under the leadership of the Communist Party of China (CPC), the people of all ethnic groups have forged ahead, worked hard in solidarity, surmounted countless difficulties, and made great, world- acknowledged achievements in reform, opening-up and economic and social development. We have attained the strategic goals set for the second stage of our modernization drive and begun our march toward third stage goals.
   
       The country has maintained a good momentum of economic growth over the past five years. This is reflected in the following aspects:
   
       --The economy maintained a high growth rate. China's GDP rose from 7.4 trillion yuan in 1997 to 10.2 trillion yuan in 2002, showing an average annual increase of 7.7 percent when calculated in constant prices. Notable results were achieved in readjustment of the industrial structure. The supply of grain and other major agricultural products made a historic shift from chronic shortages to an overall balance with surpluses during good years. New and high-tech industries, represented by the IT industry, developed rapidly. The transformation of traditional industries was accelerated. Modern service industries expanded widely. The quality and efficiency of economic growth improved constantly. National tax revenue grew by a large margin every year. Total fiscal revenue rose from 865.1 billion yuan in 1997 to 1,891.4 billion yuan in 2002, showing an average annual growth of 205.3 billion yuan. The country's foreign exchange reserves soared from USS 139.9 billion to US$286.4 billion. Investment 'in fixed assets over the past five years totaled 17.2 trillion yuan. In particular, the issuance of 660 billion yuan of long-term construction treasury bonds helped generate 3.28 trillion yuan of bank loans and funds from other sources for investment, enabling the government to accomplish many large undertakings it had envisaged but had been unable to take up for years owing to capital shortages. The productive forces rose to a new level, while the country's economic strength and ability to withstand risks and participate in international competition grew significantly.
   
       --Outstanding achievements wore made in infrastructure development. A number of key infrastructure projects of nationwide significance were completed with concentrated resources. Large water conservancy projects were built on a scale exceeding that of any facility of its kind undertaken since the founding of New China. The investment in water conservancy projects nationwide over the past five years totaled 356.2 billion yuan—an amount equaling the total investment in this field from 1950 to 1997 (allowing for price changes), Key water conservancy projects was launched or completed. Work on reinforcing 35,000 km of river embankments was started. Over 3,500 km of main dikes on the Yangtze River and nearly 1,000 km of dikes on the Yellow River have been reinforced, greatly enhancing their capacity to withstand floods. The second phase of the Yangtze River Three Gorges water control project, which has attracted worldwide attention, will soon be completed; water control facilities such as the one at Xiaolangdi on the Yellow River have been put into operation; and construction of the south-to-north water diversion project has started. Transport developed on an unprecedented scale, and a comprehensive modern transport system began to take shape. In these five years, China invested 1234.3 billion yuan in highway building, which equals 170 percent of the amount spent between 1950-97 (allowing for price changes). The total length of highways open to traffic increased from 1.23 million km in 1997 to 1.76 million km in 2002, with expressways increasing from 4,771 km to 25,200 km; thus China advanced from 39th to second place worldwide. Railway length increased from 65,969 km to 71,500 km. Over the past five years, 5,944 km of new railway lines were laid, while 4,603 km were double-tracked and 5,704 km electrified. A total of 50 airports were either built or expanded. Dock berths for 10,000-ton class or larger vessels increased their annual cargo handling capacity by 144 million tons. Construction of postal and telecommunications facilities greatly expanded. The length of installed long-distance optical cables increased from 150,000 km in 1997 to 470,000 km in 2002, and the number of fixed-line and mobile phone subscribers increased from 83.54 million to 421 million, ranking China first in the world. Construction in the energy sector was further intensified. The power-generating capacity increased from 254 million kw in 1997 to 353 million kw in 2002.
   
       --Overall development of the western region made a good start. Over the past three years since the introduction of the western development strategy, the government has given a powerful push to the region's development by increasing investment, stepping up transfer payments and introducing preferential fiscal and taxation policies. Construction of 36 key projects was launched, with total investment exceeding 600 billion yuan. Smooth progress was made in the construction of such major projects as the Qinghai-Tibet Railway, the west-to-east natural gas pipeline, the west-to-east electricity-transmission project, water control projects and trunk highways. Work was accelerated in extending asphalt roads to every county seat, ensuring every township access to electricity, and making available radio and television reception to every village. Efforts were intensified to conserve and improve the ecological environment.
   
       --Capability for sustainable development was enhanced. The country's investment in environmental protection and ecological development over the past five years totaled 580 billion yuan, which was 170 percent more than the amount between 1950-97. Six forest ecological projects are under construction, including reforestation of formerly cultivated land, protection of natural forests and control over the sources of sandstorms affecting Beijing and Tianjin. In the past five years, an additional 27.87 million hectares of land have been covered with trees, 31.53 million hectares of hills cordoned off for afforestation, and about 3.82 million hectares of farmland returned to forests. Soil erosion on 266,000 square km of land and desertification on about 5.7 million hectares of land were brought under control. The tendency toward worsening environmental pollution has, on the whole, been curbed. Fresh advances were made in the protection of natural resources. With the natural population growth rate dropping to 6.45 percent, China has entered a period featuring a low and stable fertility level.
   
       Reform and opening-up made breakthrough progress and a socialist market economic           structure was initially established
   
       Over the past five years, construction of a modern market system was undertaken in a comprehensive way. The national economy has become more market-oriented, and the basic role of the market in resources allocation has increased noticeably. Price reforms in such fields as public service, energy and transport were continuously deepened. The development of markets for capital, property rights, land, technology and labor was accelerated. Modern methods of distribution and marketing continuously expanded. Periodical achievements were made in rectifying and regulating the order of the market economy. The market environment and consumption climate gradually improved.
   
       Reforms of banking, fiscal, taxation, investment and financing systems were deepened. A banking system compatible with a growing socialist market economy began to take shape. Methods of financial regulation and control improved step by step. The framework of a social security system was established by and large. Significant progress was made in the effort to establish the basic old-age pensions and medical insurance systems in urban areas.
   
       Opening-up was expanded in breadth and depth. Foreign trade has taken several big steps forward. The ranking of China's total import and export volume rose from the 10th place to the fifth place. The total volume of exports increased from US$182.8 billion to US$325.6 billion. The mix of commodities for export was optimized continuously. The country's foreign capital utilization level was enhanced considerably.
   
       Noticeable improvement was attained in the capacity for scientific and technological innovation and education developed vigorously
   
       Significant progress was made in basic research and high-tech and applied technology studies. Outstanding achievements were scored in such fields as information technology, life science and aeronautical and space technologies. A number of key state laboratories were completed, several major scientific projects were carried out, and construction of a batch of national engineering research centers was launched. The process of industrializing and commercializing scientific and technological achievements was noticeably accelerated.
   
       Education developed rapidly. Areas where the nine-year compulsory education was basically universalized and where illiteracy among the young and middle-aged was basically eliminated comprised 65 percent of the country's total population in 1997, while the rate rose to 91 percent in 2002. Senior secondary education was strengthened. The enrolment rate for those taking university entrance exams increased from 36 percent to 59 percent. Over the past five years, 13 million junior and regular college students and 310,000 postgraduate students graduated. Significant progress was made in outsourcing college services to independent service providers. Work on establishing vocational and adult education systems with a fairly complete structure and a full range of specialties was in the main completed. Great importance was attached to special and pre-school education. Privately run schools developed rapidly. Competence-oriented education was given greater emphasis to ensure students develop in an all-round way, morally, intellectually, physically and aesthetically.
 
       Main features of government work and valuable experiences accumulated in practice
   
       The features of government work and the experiences accumulated over the past five years include the following nine aspects:
   
       1. Maintaining the right direction and intensity of macro-economic regulation and implementing a proactive fiscal policy and prudent monetary policy;
   
       2. Unswervingly taking economic restructuring as paramount and working hard to improve the quality and efficiency of economic growth;
   
       3. Steadfastly giving priority to solving the problems facing agriculture, rural areas and farmers, and consolidating the position of agriculture as the foundation of the national economy';
   
       4. Steadfastly carrying forward the reform of state-owned enterprises and effectively strengthening the reemployment work and development of the social security system;
   
       5. Steadfastly opening wider to the outside world and actively participating in international economic and technological cooperation and competition;
   
       6. Implementing the strategy of developing the country through science, technology and education, raising the nation's scientific and technological capacity for innovation and improving the overall quality of the population;
     
       7. Continuing to take the path of sustainable development and promoting the coordinated development of economy, population, resources and environment;
     
       8. Making every effort to maintain social stability so as to creat a favorable environment for reform and development; and
     
       9. Continuing to transform government functions and striving to build a clean, diligent, efficient and pragmatic government.
   
       Outstanding achievements scored in building socialist democracy and socialist                    spiritual civilization

       Democracy has been improved steadily over the past five years. Implementing the basic strategy of governing the country by law, the government performed its official duties in strict compliance with law and speeded up the effort to promote the rule of law. Administrative scrutiny, auditing and economic supervision were stepped up, which played an important role in furthering the conduct of government according to law, fighting corruption, building a clean government, and prosecuting major economic cases and irregularities. Numerous measures for comprehensively improving social security have been implemented, ensuring that the public security situation in society takes a turn for the better and enhancing the people's sense of security.    

       Fresh achievements were made in promoting spiritual civilization. The past five years witnessed unprecedented vigorous cultural exchange with the outside world. Results were achieved in the effort to prevent and control major diseases. No major epidemics broke out after the disastrous floods. The Outline Program for the Development of Chinese Women and Children was promulgated and implemented. Efforts devoted to the education and protection of young people were intensified. A great deal of work concerning the aging population was done. Great progress was made in undertakings on behalf of disabled people. Mass sports developed vigorously, and good results were achieved continuously in competitive sports. Beijing won the bid to host the 2008 Olympic Games, and Shanghai secured the right to host the 2010 World Expo. These successes aroused the patriotic enthusiasm of the people of all ethnic groups in China and enhanced their national pride and solidarity.
   
       People's living standards generally reached a well-off level
   
       The income of urban and rural residents grew continuously. The per-capita disposable income of urban residents registered an average annual growth rate of 8.6 percent in real terms. The per-capita net income of rural households increased from 2,090 yuan to 2,476 yuan a year. The balance of savings deposits of urban and rural residents rose from 4.6 trillion yuan to 8.7 trillion yuan. The number of rural poor decreased from 49.6 million to 28.2 million.
   
       The level of consumption rose noticeably. Urban and rural markets remained brisk, and the country's total volume of retail sales of consumer goods increased from 2.73 trillion yuan in 1997 to 4.1 trillion yuan in 2002, showing an average annual growth of 10.5 percent in real terms. The per-capita living space of urban residents increased from 17.8 square meters to nearly 22 square meters, and that for rural residents rose from 22.5 square meters to 26.5 square meters. Conditions of medical care continued to improve, and the average life expectancy of the Chinese people reached 71.8 years in 2002, close to the level of intermediately developed countries.
 
       Intensified national defense and army building provided a reliable guarantee for the country's security and modernization drive
   
       National defense and army building made new strides over the past five years. Acting on the military strategies for the new era, the people's army has implemented the strategy of strengthening itself through science and technology. Intensified efforts were pooled to revolutionize, modernize and regularize the armed forces, leading to a rise in the country's military capability and in the army's defensive combat readiness. The task of reducing the armed forces by half a million troops was completed on schedule. Ideological and political work in the army has been carried out effectively. Reforms in the army's logistical support system were deepened. The modernization level of military equipment and weapons has been enhanced significantly. Intensified research efforts have brought about new developments in defense-related science, technology and industry. Continuous progress was made in national defense mobilization. The intensified national defense and army building have provided a reliable guarantee for the country's security and modernization drive. Persistent efforts were made to ensure the coordinated development of national defense and economic construction. Importance was attached to scientific research in national defense and weaponry development, with an eye to enhancing the army's overall defensive combat readiness in the high-tech era.

       Outstanding difficulties and problems in China's economic and social life
   
       There are still some outstanding difficulties and problems in the country's economic and social life. They are, in the main, as follows: insufficient domestic effective demand and inability of the supply structure to respond to changes in market demand, slow growth in the income of farmers and some urban residents, a rise in the number of unemployed and serious difficulties in some people's livelihood, continued inequities in income distribution, arduous tasks faced by the reform of state-owned enterprises, the need to continue to rectify and regulate the order of the market economy, sporadic occurrence of serious industrial accidents, poor public security in some localities, degradation of the ecological environment in some areas, continued isolation from the people and perpetration of formalism, bureaucracy, falsification, extravagance and waste among some government officials, and certain types of corruption remaining conspicuous. Further steps will be taken to solve these problems conscientiously.
   
       Continue to expand domestic demand and maintain the steady and rapid development of the national economy
   
       Maintaining the good momentum of economic growth is the basis for success in all fields of government work. Importance should be attached to structural readjustment and optimization, with emphasis on enhancing the quality and efficiency of economic growth. We should adhere to the policy of expanding domestic demand, continue to implement the proactive fiscal policy and prudent monetary policy, and ensure a double-pull effect on economic growth from both consumption demand and investment demand. We should strive to expand consumption demand, and continue to improve the consumption climate by completing relevant policies and expanding areas of consumer spending. A relatively fast increase in investment should be maintained. We should broaden the channels for investment from society and for enterprise financing, and direct investment funds from society to industries and development projects encouraged by the state. We should resolutely resist redundant low-level construction projects. While continuing to guard against and defuse financial risks, we should generate more financial resources to support economic development. Securities, insurance and capital markets should be developed in accordance with established standards. The fiscal and taxation work should be handled conscientiously. Continuous efforts should be made to increase revenue and cut expenditure. By strengthening tax collection and management according to law and cracking down on all forms of tax evasion and tax fraud, we will ensure that all taxes due are collected without exception.
 
       Promote all-round development of agriculture and the rural economy
   
       Structural readjustment in agriculture and the rural economy should be accelerated. We should continue to readjust the distribution of agricultural areas and promote industrialization of agriculture, and vigorously develop animal husbandry, aquiculture and the processing of agricultural products. Efforts to return farmland to forests should be intensified. We should strengthen the system of ensuring the quality and safety of agricultural products and the system of ensuring socialized services for agriculture. We should continue to implement and improve the rural household land contract system and do a good job in managing and regulating non-agricultural land. Various reforms in rural areas should be deepened. The experiment with rural taxes and administrative charges will be extended to all parts of the country on the basis of summarized experiences and improved policies. We should conscientiously implement all policies and measures designed to lighten the burden on farmers. We should deepen the reform of the grain and cotton distribution system, so as to earnestly protect farmers' interests. We should increase investment in the development of agricultural infrastructure and agricultural science and technology. Assistance to major grain-producing areas should be intensified. A good job should be done in alleviating poverty through development. The collective economy should be strengthened, lntra-county economic development should be promoted. The process of urbanization should be accelerated. We should also intensify efforts to coordinate and guide the shifting of surplus rural labor to non-agricultural sectors, and safeguard the legitimate rights and interests of migrant farmer-workers in cities.
   
       Press forward with industrial restructuring and overall development of the western region
   
       Industrial restructuring should be accelerated in line with the requirement for a new approach to industrialization. We should vigorously develop new and high4ech industries that will propel economic growth. Efforts should be made to promote IT application and use IT to propel industrialization. We should make extensive use of advanced applicable technologies to transform traditional industries and invigorate the equipment manufacturing industry. We should do a good job in planning and readjusting the development of steel, automobile and building materials industries to prevent blind expansion and disorderly competition. Further efforts should be pooled to eliminate obsolete production capacity. We should vigorously develop modern services and tourism, and attach great importance to the development of community-based services.
   
       The development of the western region should proceed in a down-to-earth manner. We should continue to strengthen the conservation of the ecological environment and infrastructure construction. Priority should be given to the construction of major projects to ensure their progress and quality. Special effort should be placed on developing economies with local characteristics and competitive industries. Measures should be adopted to prevent the unwarranted transfer of discarded and obsolete industrial equipment and polluting enterprises to the western region. Greater support should be granted to old industrial bases in their efforts to quicken readjustment and technological transformation, encourage cities or areas that are mainly dependent on resource exploitation to develop alternative industries, and help old revolutionary base areas and regions inhabited by ethnic minorities to develop quickly.
   
       Deepen economic restructuring and open wider to the outside world
   
       While adhering to and improving the basic economic system in which public ownership plays the dominant role and diverse forms of ownership develop side by side, we should unswervingly consolidate and develop the public economy and consistently encourage, support and guide the development of individual, private and other non-public economies. We should reform the state property management system from top to bottom in an orderly way. We should expand the area which allows private capital market access, and create an environment of fair competition for all types of market forces. We should steadily carry out reform of the financial system and continue reforms of the taxation, investment and financing systems. The reform of the system for income distribution should be carried out in depth, in order to gradually straighten out the relationship of distribution.
   
       Rectifying and regulating the order of the market economy is a long-term arduous task that calls for persistent effort. We should accelerate the establishment of a new order in the socialist market economy through reform and rectification. We should enhance the level of opening-up in an all-round way by adhering to the "bringing in" and "going out" strategies. The reform of the foreign trade system should be deepened. We should strive to improve the investment environment and standardize procedures for attracting investment. Vigorous efforts should be made to promote bilateral, multilateral and regional economic cooperation.
   
       Improve the work of job creation and social security

       Efforts should be continued to improve work related to employment and social security. Governments at all levels should take it as a major task to improve the employment environment and create more jobs. The labor market should be standardized and developed. Energetic efforts should be pooled to develop vocational training and employment services. We should vigorously develop vocational training and employment services and improve guidance and services to college and vocational school graduates in their search for jobs and career opportunities. We should further improve the work of ensuring payment, on time and in full, of the living allowances for workers laid off from state-owned enterprises, the basic pensions for retirees and subsistence allowances for the urban poor. We should also do a good job in linking up the "three-stage guarantees" (the system of guaranteeing the livelihood of workers laid-off from state-owned enterprises, the unemployment insurance system and the system of guaranteeing the basic living standards of urban residents). Basic old-age pensions and medical insurance for workers of enterprises in urban areas should be upgraded, and social security coverage in various fields should be further expanded. We should steadily incorporate living allowances for laid-off workers from state-owned enterprises into the unemployment insurance funds. Social security funds should be raised through a variety of channels and managed properly. Work should be done to ensure the success of pilot programs for a new type of rural cooperative medical system. The legitimate rights and interests of women and children must be effectively protected. We should also improve the work concerning senior citizens and give greater support to undertakings on behalf of the disabled.

       Conscientiously implement the strategy of national rejuvenation through science, technology and education and the strategy of sustainable development
   
       We should continue to increase investment for developing science, technology and education. State plans for long- and medium-term development of science and technology should be promptly formulated and implemented. We should push forward the development of a state innovation system. We should effectively strengthen basic and high-tech research and enhance our capabilities for scientific and technological innovation and competition. We should strengthen infrastructure construction for science and technology. We should deepen the reform of the educational system, encourage innovative approaches to education, and promote competence-oriented education in an all-round way. We should accelerate the development of all types of education at all levels and improve the quality of education. We should continue to implement the strategy of making the country strong by giving full play to the role of talented people. We should keep up our good work with regard to population and family planning. Protection and conservation of the ecological environment should be strengthened and the work concerning disaster prevention and reduction improved.
   
       Unswervingly pursue an independent foreign policy of peace
   
       We will continue to consolidate and strengthen our solidarity and cooperation with other developing countries and support them in their efforts to defend their legitimate rights and interests. We will continue to cultivate friendly ties with our neighbors, increase regional cooperation and bring our exchanges and cooperation with neighboring countries to a new high. We will continue to improve and develop our relations with developed countries and, on the basis of the Five Principles of Peaceful Coexistence, broaden the area of common interests and appropriately iron out differences. We will continue to take an active part in multilateral diplomacy and promote democracy in international relations and diversity in development models. We are against all forms of hegemonism and power politics and against terrorism of every kind. The Chinese people are ready to join the people of all other countries in the lofty cause of promoting world peace and development.
 
       Strengthen the building of socialist democracy, the legal system and spiritual civilization

       We should develop socialist democracy and socialist political civilization. Political power and democracy at the grass-roots level in urban and rural areas should be strengthened. We should build up the socialist legal system and improve administrative laws and statutes, increase the level of law enforcement by administrative authorities and enhance the awareness of law of all Chinese citizens. We should further develop cultural undertakings, such as literature, art, mass media, publishing, radio, film and television, and bring out a large number of high quality works. We should deepen structural reform in the cultural field and actively develop cultural undertakings and cultural industries. We should tirelessly fight against pornographic and illegal publications. Development and management of Internet websites should be strengthened. We should actively promote the xmform and development of health and sports undertakings. We should conscientiously do a good job in preparing for the 2008 Olympic Games in Beijing and the 2010 World Expo in Shanghai. We must spare no efforts to maintain social stability. We must severely deal with all crimes in accordance with the law, and watch out for and punish criminal activities of cult organizations.
   
       Earnestly improve the government itself
   
       We must deepen the reform of the administrative system. In keeping with separation of the government from enterprises and the principles of simplification, consistency and efficiency, we should further transform government functions, reorganize the government setup, clarify the functions of government departments, simplify administrative examination and approval procedures and improve government management, so as to bring about an administrative system that has standardized behavior and operational harmony, and is fair, transparent, clean and efficient. We must follow the law and be strict in performing our official duties. We must keep up our anti-corruption fight, and energetically rectify misconduct and unhealthy tendencies in various trades and government departments. We must intensify administrative supervision and auditing, as well as surveillance by the media and the general public. In the new situation, we should be all the more mindful of potential perils and be prepared for the worst. It is incumbent upon all of us to remain modest, prudent and free from arrogance and rashness in our style of work, and to preserve the style of plain living and hard work.
   
       Complete reunification of the motherland can be achieved at an early date
   
       Over the past five years, fresh progress was made in promoting the great cause of national reunification. Following the return of Hong Kong to the motherland, the Chinese Government resumed the exercise of sovereignty over Macao in December 1999. Maintaining the prosperity, stability and development in Hong Kong and Macao is an unshakable goal of ours. We must continue to implement the principle of "one country, two systems" and act in strict accordance with the basic laws of the Hong Kong and Macao special administrative regions. We must implement in an all-round way the basic principles of "peaceful reunification" and "one country, two systems" and the eight-point proposal for the settlement of the Taiwan issue, strive for an early resumption of dialogue and negotiation between the two sides of the Taiwan Straits on the basis of the one-China principle, and strongly oppose any statements or actions aimed at creating "Taiwan independence", "two Chinas" or "one China, one Taiwan". We should further expand the scope of personnel visits across the Straits, as well as exchange and cooperation in economic, cultural and other fields, while vigorously promoting the three direct links of trade, mail, and air and shipping services across the Straits.