Premier Wen pledges: `Put people first'
By Xing Zhigang (China Daily)
Updated: 2004-03-05 23:57

"Putting people first" will be the the main feature of the central government's work in 2004, Premier Wen Jiabao vowed on Friday.

In his first government work report to the 10th National People's Congress, Wen promised "all-round, balanced and sustainable" development focused on job creation, improving the welfare system and narrowing the urban-rural divide.

The innovative premier devoted an entire section of the report to outlining a range of measures aimed at building a more people-oriented government.

Summing up his first year in office and looking ahead to the next, the premier told China's top legislature that the central government had planned for 7 per cent economic growth this year and promised "all-round, balanced and sustainable" socio-economic development.

Premier Wen pledged to place government administration under the greater scrutiny of the public, people's congresses at different levels, the media and other social forces, vowing that the government will abide by the law at all times.

"All power government power is bestowed by the people, so the government must be accountable to the people, act in their interests and accept their oversight,'' the premier told 2,904 lawmakers in his nationally televised address in the Great Hall of the people.

Wen stressed that his government will continue to put people first and concentrate on resolving major social problems.

Premier Wen won warm applause from deputies as he pledged to make life better for China's 800 million rural population by scrapping agricultural tax in five years.

The central government will also plough 79.6 billion yuan (US$9.6 billion) into supporting rural taxation and grain distribution system reforms and lifting investment in agriculture.

Both of these are moves which will help to narrow the widening income gap between the nation's urban and rural populations.

Farmers' per capita incomes of farmers, which have been seeing a stagnant growth, stood at 2,622 yuan (US$316) last year, accounting for less than one- third of that of urban residents.

But the premier was also keen to show the central government's commitment to resolving social problems in urban areas.

Wen revealed a government plan to create 14 million jobs for the new urban workforce and laid-off workers from loss-making State-owned enterprises.

"Doing everything possible to create more jobs is one of the major responsibilities of the government, Wen told legislators, adding the government will allocate 86.2 billion yuan (US$10.4 billion) to subsidize the jobless and poverty-stricken urban residents.

In a rare and high-profile move, Wen devoted a large and independent part of his speech to proposed measures to build better government.

"Governments and leading cadres at all levels need to adapt to new situations and tasks and continually raise their administrative and management ability," he said.

The premier noted that government functions should be further transformed and separated from the operation of enterprises in a bid to give greater scope to the basic role of the market in resource allocation.

He also called for scientific and democratic policy making, and said the government's style of work and the overall quality of civil servants should also be improved to help build a clean government and stamp out corruption.

Analysts said the move reflects the top leadership's goal of building a transparent and law-based government to help push forward the country's reform and opening drive.

The premier said the central government will strive to maintain the long-term stability and prosperity of Hong Kong and Macao, and continue to uphold the principle of "one country, two systems," acting in strict accordance with the basic laws of the Hong Kong and Macao special administrative regions.

He also said the mainland has "utmost sincerity and will do everything possible" to bring about a peaceful reunification of the motherland, but "stand firmly opposed to any form of separatist activities aimed at 'Taiwan independence,' and will never allow anyone to split Taiwan from China by any means."

Mesaures to strengthen macro-control management to maintain stable and rapid economic growth were at the top of the premier's economic agenda, he said.

Although the pro-active fiscal policy is to be maintained, the planned issuance of construction treasury bonds will be cut by 30 billion yuan (US$3.6 billion) to 110 billion yuan (US$13.3 billion) this year.

The government also aims to control the scale of fixed-asset investment to avoid overheating.

Besides deepening the reforms of State-owned firms, the premier said the country will vigorously promote the development of the non-public sector.

"Governments at all levels must promptly eliminate or revise regulations and policies that restrict the development of this sector," he said.

2003: a significant and unusual year

Premier Wen Jiabao described the year 2003 as a significant and unusual year for China, in which the country made remarkable achievements in reform and opening up and in the modernization drive.

"We braved difficulties and hardships in an indomitable and innovative spirit and made important advances in building a moderately prosperous society in all respects,'' he said.

Wen listed last year's achievements as follows:

* China won a great victory in the fight against severe acute respiratory syndrome (SARS);

* The economy grew rapidly. China's GDP increased by 9.1 per cent over the previous year and reached 11.67 trillion yuan (US$1.41 trillion). Per capita GDP passed the important benchmark of US$1,000, calculated at the current exchange rate;

* China's financial strength grew noticeably. Total government revenue was 2.17 trillion yuan (US$261.4 billion), 278.7 billion yuan (US$33.58 billion) more than the previous year;

* Foreign trade expanded significantly. Total import and export volume was US$851.2 billion, 37.1 per cent more than the previous year, raising China from fifth to fourth place in the world;

* China created more jobs than planned. Some 8.59 million urban residents became employed, with 4.4 million laid-off workers re-employed;

* Personal incomes increased. Urban per capita disposable income grew by 9 per cent in real terms, and rural per capita net income rose by 4.3 per cent in real terms;

* China's first manned space flight was a complete success.

"These achievements indicate that China's overall national strength has reached new heights,'' the premier said, adding: "They have boosted the confidence and courage of all the Chinese people to continue forging ahead.''

He attributed the accomplishments to the efforts of governments at all levels and the people to put into practice the guiding principles of the 16th National Congress of the Communist Party of China (CPC) under the leadership of the CPC and the guidance of Deng Xiaoping Theory and the important thought of Three Represents, in the face of a complex and volatile international situation, the unexpected outbreak of SARS and frequent natural disasters.

Resolute measures

Premier Wen hailed the country's "great victory'' in the fight against SARS last year.

He said China suffered from a disastrous SARS outbreak last spring. The Party Central Committee and the State Council gave top priority to protecting people's health and lives and promptly investigated SARS and took steps to prevent and treat it.

"We enforced the Law of the People's Republic of China on the Prevention and Treatment of Communicable Diseases, formulated the Regulations on Public Health Emergency Response, and classified SARS as a communicable disease,'' Wen said.

"We reported the facts of the SARS situation exactly as they were and mobilized the general public throughout the country to control the outbreak.''

The State Council and local governments established anti-SARS headquarters to co-ordinate human, material and financial resources and to make full use of primary-level organizations in both urban and rural areas, so as to ensure that prevention and treatment work was done quickly and orderly.

The government took such measures as providing free treatment for SARS patients among rural workers in urban areas to prevent the spread of SARS to rural areas, he noted.

"During the difficult days of our anti-SARS campaign, leading cadres at all levels took to the front lines, the people throughout the country united as one, all sectors of society pulled together, large numbers of medical workers faced danger fearlessly, and the Chinese nation withstood a severe test,'' the premier said.

Timely and appropriate control

The Chinese Government exercised timely and appropriate control to promote stable and rapid economic development and took measures to exercise macro-control over new developments as soon as they arose in the course of economic operation last year, Premier Wen said.

Wen said that last year China adhered to the policy of expanding domestic demand and continued to implement a proactive fiscal policy and a prudent monetary policy.

"When the SARS outbreak hit, we worked unflaggingly to prevent and control it, while at the same time unswervingly promoting economic development,'' Wen said.

"We concentrated on strengthening key areas, stimulating industrial production and ensuring unimpeded flow of goods and materials.''

The government promptly adopted such supportive policies as reducing or exempting taxes and administrative charges on industries that were worst hit by SARS and granting soft loans to them, and enacted measures for increasing employment and rural incomes.

"All this helped minimize the impact of the SARS outbreak on economic development,'' he said.

According to the premier, the government last year provided guidance and control for investment, mainly through a combination of economic and legal means; further rectified and standardized the order of the land market and screened development zones of all types to stop disorderly and unauthorized acquisition of farmland; and increased the deposit-reserve ratio for financial institutions to an appropriate level to bring the excessively rapid growth of credit under control.

The government also expanded support for agriculture, rural areas and farmers and made plans in a timely fashion to ensure the continued enthusiasm of major grain producing areas and grain producers.

In 2003, the premier said, China stepped up the strategic restructuring of the economy and put greater efforts into a number of key projects vital to economic growth and economic restructuring.

He informed the lawmakers of progress on the Three Gorges hydraulic project, the cross-country natural gas pipeline project, the Qinghai-Tibet railway trunk line, and the cross-country power transmission project, the cross-country water diversion project, the large-scale development of the western region, and the efforts to revitalize northeast China and other old industrial bases.

Social undertakings

China accelerated development of social undertakings on the basis of an overall consideration of all issues last year, Premier Wen said.

The spread of SARS exposed problems arising from disparities between economic and social development, and the government promptly made necessary adjustments to its priorities and investment to stimulate the development of social undertakings, he said.

The central government spent 85.5 billion yuan (US$10.3 billion) in 2003 on education, health, science and technology, culture and sports, 12.4 per cent more than the previous year.

Treasury bonds worth 16.3 billion yuan (US$1.96 billion) were issued to support the development of social undertakings, an increase of nearly 200 per cent.

Last year the government improved the national public healthcare system, focusing on epidemic prevention and control and on rural areas. The National Plan for Developing an Information System for Public Health Monitoring and the National Plan for Developing a System for Medical Rescue and Treatment in Public Health Emergencies were formulated and implemented, and a system was set up for early warning and response for public health emergencies.

Public health infrastructure was improved, with the focus on networks spanning provincial, city (prefecture) and country levels for disease prevention and control.

The central government worked with local governments to build more rural health and medical institutions. Pilot projects for a new cooperative medical care system and medical assistance system were initiated in rural areas.

Last year, the premier said, the State Council issued the Decision on Further Strengthening Rural Education. Increased financial support was extended to rural education from the central budget and treasury bonds. Priority was given to subsidizing rural teachers' salaries in the central and western regions, renovating dangerous primary and secondary school buildings, carrying out pilot projects in modern distance education and aiding needy students.

Many cities began to make schooling available for the children of migrant rural workers, and the governments of those cities assumed primary administrative responsibility.

Great progress was made last year in basic research, strategically important high-tech research, and industrial application of new and high technologies. The State Council began formulating a national medium- to long-range programme for scientific and technological development.

Reform of the cultural system and the development of cultural undertakings were vigorously promoted. Efforts were intensified to rectify the cultural products and services market. Fresh achievements were made in amateur and competitive sports.

The premier said population and family planning work was further strengthened, with fresh progress made in the areas of land and resources administration, environmental protection, forestry development and ecological improvement.

People's well-being

The Chinese Government has worked hard to care for people's well-being, create more jobs and administer social security work well, Premier Wen said.

Last year, governments at all levels conscientiously implemented a series of measures drawn up by the CPC Central Committee and the State Council for increasing employment and reemployment and increased their efforts, capital spending and policy support in this regard.

"We consider it highly important to protect the vital interests of the people and help them, especially the needy, in solving problems in their work and daily lives,'' he said.

Last year, the central government allocated an additional 4.7 billion yuan (US$566 million) in subsidies for job creation and increased employment guidance and services for college graduates. By the end of last year, 83 per cent of the year's graduates from regular institutions of higher learning had found jobs, 600,000 more than the previous year.

To continue ensuring the "two guarantees'' ( living allowances for workers laid off from State-owned enterprises and pensions of retirees being paid on time and in full) and the "three-stage guarantee'' for laid-off workers, the central government spent 70 billion yuan (US$8.43 billion) in 2003, 19.9 per cent more than the previous year; of this sum, subsidies for subsistence allowances for the urban poor increased from 4.6 billion yuan (US$554 million) in 2002 to 9.2 billion yuan (US$1.11 billion) in 2003. This allowed 22. 35 million urban residents throughout the country to receive such benefits.

In 2003, the central government began making annual allocations of special funds to help local governments assist ex-servicemen who are working in enterprises to solve their financial difficulties. Benefits were again raised for disabled revolutionary servicemen and other people who are entitled to special care by the government.

Premier Wen disclosed that in 2003 central budget funds totalling 8.03 billion yuan (US$967.4 million) were spent on relief for people affected by floods, droughts, earthquakes or other disasters, up 63.9 per cent over the previous year, and 2.79 billion yuan (US$336.1 million) was invested in post-disaster reconstruction.

"We made all-out efforts to fight disasters and ensure adequate disaster relief, Wen said.

As a result, proper living arrangements were made for people in disaster-afflicted areas, production resumed and reconstruction proceeded in an orderly way, he said.

Last year the government further intensified efforts to alleviate rural poverty through development and invested more to improve working and living conditions in underdeveloped areas. Meanwhile, governments at all levels took the problem of wage arrears for migrant rural workers very seriously, worked harder to resolve it and achieved initial results, added the premier.

Institutional changes

The Chinese Government pressed forward with institutional innovation and made significant progress in reform and opening up last year, Premier Wen said.

Institutional restructuring of the State Council was accomplished smoothly on the basis of the plan approved at the First Session of the Tenth NPC and the adjusted and newly set up bodies are now operating normally, said the premier.

Wen told lawmakers that significant progress was made in establishing a macro-control mechanism, restructuring the management of State assets and establishing a mechanism for oversight and management of the banking sector.

Last year the central government unified the mechanisms for administering domestic and foreign trade and improved monitoring systems for food and workplace safety. Institutional restructuring of provincial governments has basically been completed. The reform of the administrative examination and approval system was deepened.

The economic returns of State-owned industrial enterprises and enterprises whose controlling stake was owned by the State increased substantially; they generated a total of 378.4 billion yuan (US$45.7 billion) in profits, 45.2 per cent more than the previous year, Wen said.

The reforms of the banking, securities and insurance industries progressed steadily, he added.

Last year, China formulated and implemented a pilot plan to transform State-owned commercial banks into stock entities. The system for examining and verifying the issuance of securities was reformed. Remarkable progress was made in transforming State-owned insurance companies into stock companies.

After several years of deliberation, China began a pilot project for reforming rural credit cooperatives in eight provinces and municipalities directly under the central government.

The experimental reform of rural taxes and administrative charges was extended to cover the whole country, and policies and measures for promoting the development of the non-public sectors of the economy were further implemented.

China deepened the rectification and standardization of the market order and cracked down on manufacturing and marketing of counterfeit and substandard goods, smuggling and other illegal and criminal activities.

"This improved the market climate and helped protect the legitimate rights and interests of both consumers and producers,'' the premier said.

Wen said China worked conscientiously last year to fulfill the commitments made for accession to the World Trade Organization (WTO), and continued to lower tariff rates and opened the service sector wider to the outside world.

"We formulated and put into effect a plan for reforming the mechanism for export tax rebates; this will gradually bring about a rational settlement of the long-standing problem of overdue export tax rebates,'' Wen said.

The government also intensified its work dealing with anti-dumping investigations made against China and settling trade disputes.

While further improving the import and export mix, China utilized US$53.5 billion in foreign direct investment in 2003.

State foreign exchange reserves reached US$403.3 billion at the end of the year, US$116.8 billion more than at the beginning, and the exchange rate for the Renminbi remained stable.

"Last year we signed the Closer Economic Partnership Arrangement with both Hong Kong and Macao, thereby strengthening economic ties between the mainland and the two regions,'' Wen said.

Legal system improved

China increased its efforts to maintain law and order by taking comprehensive measures last year, focusing on high-crime areas, Wen said.

"We further improved public order by cracking down more severely on violent and other serious crimes,'' he said.

"We steadfastly enforced laws in the interests of the people and maintained strict police discipline, and we concentrated on the problems of detention beyond the legally prescribed time limits and illegal use of coercive measures to protect the lawful rights and interests of citizens.''

Last year China improved the overall quality of procurators and judicial and public security officers, and made full use of the important role of public security organs and armed police units in safeguarding social stability, according to the premier.

Addressing the great effort put into improving government legislation, Wen said the State Council submitted five bills in 2003, including a draft law on oversight and management of the banking sector and a draft amendment to the Foreign Trade Law, and enacted 28 administrative regulations, including the Provisional Regulations Concerning the Oversight and Management of State-owned Assets in Enterprises.

To solve problems in the handling of indigent migrants, the government formulated and implemented the Measures for Assisting Vagrants and Beggars with No Means of Support in Cities together with supporting measures. The implementation of the Legal Assistance Regulations helped solve the difficulties people in financial straits faced in filing lawsuits, said the premier.

Government will fight corruption

Premier Wen cited it as an arduous task for the government to rectify itself and fight corruption. He criticized some government officials for their "subjective, formalistic and bureaucratic style of work'' and being "wasteful, extravagant and fraudulent, and sometimes even corrupt.''

The government will not evade these difficulties and problems but instead face them squarely. "We must work hard to resolve them and not let them grow,'' the premier pledged.

Wen acknowledged that as economic growth has accelerated, a number of new problems have emerged. These include, among others, the excessively broad scale of investment, the serious problem of haphazard investment and low-level, redundant construction in some industries and regions, the strain between supply and demand in energy, transport and some raw and processed materials, a marked decrease in grain production, and the widespread illegal appropriation of farmland.

The development of social undertakings lags behind, and people have complaints about the cost and availability of schooling and medical treatment, he said, adding that many low-income residents in both town and country lead relatively difficult lives.

Serious crimes have occurred in some places, while frequent serious accidents that inflict heavy loss of life and property have taught the government a sobering lesson, noted the premier, underscoring that the government will shoulder heavy responsibilities for years to come.

"We must remain sober-minded, become more aware of potential problems and enhance our sense of historical responsibility. We must make up our minds to forge ahead in spite of difficulties and to work in a pioneering and creative spirit and in a down-to-earth manner. We must take on new tests with a fresh mental outlook and a new style of work, and we must absolutely not fail to live up to the expectations of the people,'' Wen told the legislators.

Principal tasks

"The year 2004 is a crucial year for China's reform and development,'' he said.

Wen listed the primary domestic tasks for 2004 as follows:

* To pay more attention to exercising macro-control, balancing the interests of all parties, putting people first, and promoting reform and innovation in accordance with the "five balanced aspects'' (balancing urban and rural development, balancing development among regions, balancing economic and social development, balancing development of man and nature, and balancing domestic development and opening wider to the outside world);

* To concentrate on resolving prominent conflicts in economic and social development and acute problems concerning the vital interests of the people and properly balancing reform, development and stability;

* To promote all-round, balanced and sustainable development of the economy and society; and to coordinate the progress of socialist material, political and spiritual civilizations.

Macro-control to be strengthened

The basic focus of this year's economic work is to safeguard, guide and utilize the enthusiasm of all sides for accelerating development in order to achieve stable and rapid economic growth without drastic fluctuations, said Wen.

In setting a target for this year's economic growth of around 7 per cent, the central government has taken into consideration both the need for continuity in macro-control and the relationship between the pace of economic growth and the conditions for its attainment, including supply and demand in energy, important raw and processed materials, and transport capacity, also taking into account the need to alleviate the pressure on resources and the environment, according to the premier.

This target also encourages all sides to focus on deepening reform, adjusting the economic structure and improving the quality and efficiency of economic growth and to devote more financial and material resources to promoting social development and strengthening weak links, he said.

"To ensure effective macro-control, we need to maintain consistency and stability in our macro-economic policies while adjusting the intensity and focus of policy implementation at the proper time and to an appropriate degree in response to developments and changes in the economic situation,'' Wen said.

"By `at the proper time,' we mean seizing the opportune moment for introducing control measures by observing small clues that may indicate what is coming in order to forestall any possible trouble. By `to an appropriate degree,' we mean that macro-control should neither be too loose nor too tight and that we must not apply the brakes too hard or apply control measures too rigidly.''

Wen pledged China will adhere to the policy of expanding domestic demand and continue to implement a proactive fiscal policy and a prudent monetary policy.

This year the central government plans to issue 110 billion yuan (US$13.3 billion) in construction treasury bonds, 30 billion yuan (US$3.6 billion) less than last year, Wen said.

As the issuance of treasury bonds is to be reduced year by year, it will be necessary to appropriately increase the investment from the central budget for regular construction annually in order to develop a regular government investment mechanism and stabilize the sources of funding, Wen said.

To begin with, the government plans an increase of 5 billion yuan (US$604.2 million) this year. The general idea is to appropriately increase investment from the central budget for regular construction each year for several years while systematically decreasing the issuance of treasury bonds, and at the same time ensuring that the size of the deficit remains at the current level.

The government will adjust the way funds from construction treasury bonds are used, concentrating on promoting economic restructuring and ensuring all-round social development, according to the premier.

"This year, funds from the sale of treasury bonds will be directed toward rural areas, social undertakings, the western region, northeast China and other old industrial bases, ecological improvement, environmental protection, and ongoing bond-financed projects. We need to manage and use treasury bonds well and ensure the quality of the projects they finance and the efficient use of investment capital.

"We must continue to do our fiscal and taxation work well by working hard to increase revenue and reduce expenditure, collecting taxes in strict accordance with the law and guaranteeing funding for key items,'' the premier said.

The government should make full use of the role of monetary policy, appropriately control the size of credit and optimize the credit structure to support economic growth while fending off inflation and financial risks, he said, pledging to work to basically balance international payments and keep the exchange rate for the Renminbi basically stable at a proper and balanced level.

The government will appropriately control the scale of investment in fixed assets and firmly halt haphazard investment and low-level, redundant construction in some industries and regions, Wen said.

Guided by market forces, the government will use a comprehensive range of measures, mainly economic and legal means supplemented by any necessary administrative measures, to strengthen guidance and control.

First, industrial policies and planning should be improved and the information release system for industries should be improved to correctly guide nongovernmental investment.

Second, the government must quickly formulate and revise standards for admittance into industries and enforce market admittance strictly. Projects that do not meet standards for environmental protection, safety, energy consumption, level of technology or quality and have not yet been started should be blocked and those already under construction should resolve such problems, while those already completed should be upgraded within a specified time.

Third, land-use management must be improved in accordance with the law. No land should be approved for projects that fail to meet the requirements of the State's industrial policies and standards for admittance into industries. The government should continue clearing up problems relating to development zones and rectifying and standardizing the land market.

Fourth, auditing and oversight of credit transactions must be strengthened. Financial institutions should not make any loans to new projects or rebuilding and expansion projects that do not meet the requirements for market access.

Fifth, the taxation system must be tightened and the practice of introducing unauthorized tax privileges must be stopped and rectified.

"On the basis of these measures we will strive to optimize the investment structure, keep the overall investment volume at a reasonable level and improve returns on investment,'' Wen said.

In order to take a new road to industrialization, China must base the national economy and society on IT and upgrade the industrial structure, according to the premier.

To ensure stable and rapid economic development, China must alleviate the current disparities between supply and demand in energy, important raw and processed materials and transport capacity, he said.

The premier went on to say that balancing investment and consumption is an important aspect of this year's work for macro-control. He said that consumption occupies too small a proportion of China's GDP, noting this is not conducive to ensuring a stable increase in domestic demand, sustaining rapid economic growth and establishing a beneficial economic cycle.

The government must work hard to increase the incomes of both urban and rural residents and raise their purchasing power.