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V. Thoroughly Rectifying and Regulating the Order of the Market Economy

Thoroughly rectifying and regulating the order of the market economy is urgently needed to expand domestic demand and ensure sound economic growth. This is an inevitable choice we should make in consequence of China's entry into the WTO and the new steps taken to open China to the outside world. This is also an important measure to improve the socialist market economic system, upon which success or failure of China's modernization hinges. On the basis of the initial results achieved last year, we need to press ahead with this task with a still greater resolve and even more effective measures.

Working in an all-round way while emphasizing key points.We need to pay great attention to the current outstanding problems and concentrate on the following tasks: First, we need to severely crack down on all illegal and criminal activities related to the production and sale of counterfeit and shoddy goods, especially food, medicines and medical apparatus that seriously endanger people's lives and health. Second, we need to continue rectifying and standardizing the markets for construction and cultural products and the order of finance and taxation. Unremitting efforts must be made to combat such crimes as tax fraud and evasion, evading foreign exchange control, obtaining foreign currency through deception, pyramid selling and smuggling. Such violations of the law as forging invoices and vouchers and falsifying accounts must be dealt with severely. We need to regulate and standardize accounting firms and other intermediary service organizations. We will make great efforts to rectify the order of the tourism market. Third, the financial order needs to be thoroughly rectified. We need to earnestly investigate and deal with business activities that violate laws and regulations concerning banks, securities and insurance companies, and other financial institutions. We need to resolutely ban illegal financial institutions and illegal financial activities. Financial swindling, illegal fund-raising, manipulation of the securities market, insider trading, and malicious evasion and cancellation of debts should be investigated and dealt with according to law. Fourth, local protectionism and monopoly of industries must be eliminated. We need to deal with and stop, according to law, the acts of abusing privileges to set up trade barriers, obstruct commodity circulation and impede fair competition. We will continue to tighten management of the market for finished oil and market fairs. Prices and fees need to be rectified. Fifth, the management of industrial and traffic safety needs to be strengthened. The safety responsibility system needs to be improved. To prevent major worksite accidents, we must take effective measures to correct supervision and performance of work that violate safety rules and regulations. We need to tighten supervision and management over the entire process of handling dangerous chemicals and inflammable and explosive materials from their production, marketing, transport and warehousing to their use. Factories and mines that produce inferior products, contaminate the environment, damage resources or do not meet production safety standards must without exception be shut down in accordance with the law. In rectifying and standardizing the order of the market economy, we need to concentrate on investigating major cases and severely punish those guilty of crimes or corruption.

Seeking both temporary and permanent solutions while focusing on the permanent solution.The qualifications of all kinds of market entities need to be carefully examined to properly control market access. Government departments at all levels must sever their ties with enterprises and intermediary organs in accordance with relevant regulations. They must further take effective measures to implement the regulations on separately managing the receipts and expenditures of administrative charges and incomes from imposition of fines and confiscation. Comprehensive and departmental budgets need to be prepared to ensure that all departments have sufficient funds to perform their duties according to law and strictly enforce the law. We need to strengthen rule of law, improve the regulations linking administrative penalties to criminal investigation and prosecution, resolutely prevent and correct the acts of failing to punish lawbreakers and replacing punishment with imposing a fine, and deal with violations of the law more severely. We need to solve problems of law enforcement involving authorities at different levels or various government departments at the same level and improve the system of responsibility for law enforcement and the system of accountability. We need to effectively improve social credibility and gradually develop moral standards throughout society based on honesty and moral integrity. We need to accelerate the establishment of credibility records for enterprises, intermediary agencies and individuals, making those with a record of bad conduct pay a price for what they have done, and have their credibility ruined and even punishing them according to law. We will extensively apply modern means of supervision, utilize online information, establish interconnected networks and share information. We need to accelerate the reform of the system of distributing goods and develop modern methods of distribution to make it difficult to put counterfeits and shoddy goods on the market. We need to give full play to the role of industrial associations and intermediary organizations, change and improve their mechanisms of self-discipline and attach importance to supervision by the general public and news media.

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