The First Session of the 10th National People's Congress (NPC), China's top legislature, called its second plenary meeting in the Great Hall of the People in Beijing Thursday morning. Zeng Peiyan, minister of the State Development Planning Commission, delivered the Report on the Implementation of the 2002 Plan for National Economic and Social Development and on the 2003 Draft Plan for National Economic and Social Development at the session. The following are the excerpts from his report.

Achievements of the Past Five Years

During the past five years, the Chinese economy has experienced sustained and rapid growth. All social undertakings have developed rapidly. The overall national strength has reached a new height. The socialist market economy has been basically established. A pattern of multidirectional opening to the outside world has taken shape. China's international influence has grown notably, and our national cohesion has greatly increased. Our country has enjoyed social stability, solidarity, good government and a united people. These five years constituted one of the best periods of development of in China's history, during which a solid foundation has been laid for our long-term development despite a host of unfavorable factors in the international economic environment and numerous difficulties in the domestic economy. We clearly realize that all this is attributable to the scientific decisions and correct leadership of the central authorities and to the timely guidance and intensified oversight of the National People's Congress and its Standing Committee. Credit also goes to localities and departments for their concerted efforts and earnest work, and to the people of all out ethnic groups who have worked hard with one heart and one mind.

Alert on Conflicts and Problems

"We are also aware that there are still many conflicts and problems in our economic and social activities and that some of these are very serious," said the top economic planner.

The problem of weak effective demand is coupled with an irrational supply structure. Because the main factors affecting rural incomes have yet to be eliminated, rural income growth has been slow, the minister stressed.

Some urban residents have very low incomes and are confronted with many difficulties in their lives. All this hinders the expansion of the consumer market. The investment potential of the collective and private sectors and of individually run businesses has yet to be fully tapped, he said.

Employment and reemployment prospects remain grim. A large number of urban residents need to find a job or get reemployed, and there is a huge surplus of rural labor that needs to be diverted to work in urban areas. This makes it very difficult to create enough new job opportunities to keep up with the demand for employment, according to the minister.

The reform of state-owned enterprises is a monumental task, with deep-seated problems still not totally solved. "We still have a lot to do to make development through fair competition possible for businesses under different forms of ownership," he said.

The order of the market economy remains fairly chaotic. "We still have a long way to go to establish a social credibility system," he said, adding that major industrial accidents occur frequently. The State Council is paying close attention to these problems and working hard to adopt measures to solve them, he stressed.

7 Percent Economic Growth Rate for 2003

Zeng proposed a 7 percent growth for the country's gross domestic product in 2003.

He also listed other macroeconomic regulatory targets for 2003,which are as follows:

• Over 8 million new jobs for urban residents, and registered urban unemployment rate confined to 4.5%;

• Rise in the consumer price index of no more than 1%; and

• Increase in the total import and export volume of 7%.

The year 2003 is important for carrying out the guiding principles set forth at the 16th National Congress of the Party and for making fresh progress in building a well-off society in an all-round way, he said.

A comprehensive analysis of the domestic and international economic environments shows that "we enjoy favorable conditions for accelerating development but also face new challenges."

Conditions might change and new problems could arise in the Chinese economy, and there are many uncertainties in the world economy as well. Only by enhancing our awareness of potential danger, preparing for adversity, adequately assessing difficulties and problems, and fully considering policy measures can China avert peril and keep the upper hand, according to the minister.

Unemployment Rate Under 4.5 Percent

China promised to spare no effort to reach the projected targets for creating over 8 million new jobs for urban residents, in a bid to confine its registered urban unemployment rate to 4.5 percent in 2003.

The registered urban unemployment rate for 2002 was 4 percent, according to official statistics.

Efforts to bring the unemployment rate under control and increase over 8 million jobs should be incorporated into the plans of governments at all levels for economic and social development, according to his report.

"Development of the service sector will be the main source of new employment and reemployment. In particular, we must make full use of the important roles of individually and privately run businesses and of small and medium-sized enterprises in increasing employment," the minister said.

Great efforts should be made to create jobs in urban communities. The labor market needs to be standardized and further developed. Unemployed people are encouraged and supported to seek jobs on their own and to start their own businesses.

The social security system will be improved. "We will further consolidate the system of guaranteeing that the basic living allowances for workers laid off from state-owned enterprises and the basic pensions for retirees are paid on time and in full," the economic planner stressed.

He added that the implementation of the three programs for ensuring basic living allowances for workers laid off from state-owned enterprises, for improving unemployment insurance and for guaranteeing a minimum subsistence level for needy urban residents should be well coordinated.

Harsh Measures on Market Irregularities Promised

China will continue to implement the market-oriented reform and take harsh measures to rectify and standardize the order of the market economy in 2003.

"We will deal severely with illegal and criminal activities such as manufacturing and marketing fake or shoddy goods, smuggling, distribution of smuggled goods, and pyramid schemes," Zeng said.

Special campaigns against wrongdoings in the market will continue, and the central government will come down hard on major economic crimes and irregularities that seriously endanger the order of the market economy.

"We will promptly establish systems for enterprise and individual credit information, so as to develop an honest, credible and lawful market environment as soon as possible. We will strengthen supervision and management of production safety to prevent serious accidents," the minister said.

In addition, the government will improve the mechanism whereby prices are determined mainly by market forces under government macroeconomic regulation. Such systems as holding public hearings on government price-related decisions, expert reviews, group reviews and supervision and examination of prices for important goods and services, will be improved, he said.

"We will speed up the reform of the investment and financing systems, give enterprises the right to make independent investment decisions and improve macro control of the country's fixed-asset investment," Zeng said.

Income Growth for Urban, Rural Residents Expected Lower in 2003

The income growth rates for Chinese urban and rural residents will drop in 2003.

In 2003, the per capita disposable income of urban residents is expected to increase by 6 percent. The figure for 2002 is 13.4 percent. While the per capita net income of rural residents is expected to increase by 4 percent in 2003, compared with 4.8 percent last year.

The per capita disposable income of urban residents is 7,703 yuan in 2002, while that of rural residents 2,476 yuan, according to official statistics.

However, the minister said that a system for assisting low-income people through a variety of means will be established and perfected to help exceedingly indigent urban families solve their problems in housing, children's schooling, medical treatment and heating.

"We will deepen the reform of the wealth distribution system to increase personal incomes, particularly for the low-income population," the minister said.

(China.org.cn March 6, 2003)