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III. Carrying Forward Adjustment of the Economic Structure and the Economic Restructuring

We need to further resolve structural inconsistencies and remove institutional obstacles that impede economic development. This is an essential measure to sustain development of the national economy, improve the quality of its performance and enhance its competitiveness. We will make unremitting efforts to adjust the economic structure and deepen the economic restructuring.

Accelerating the optimization and upgrading of the industrial structure.First, we need to utilize new and high technologies and advanced applied technologies to transform and upgrade traditional industries. We will support the technological transformation of key industries and enterprises and help large equipment manufacturing enterprises that perform important tasks assigned by the state to raise their capacity for product development and technological innovation. Enterprises need to draw up plans and choose feasible projects for technological transformation, focusing on "quality, variety and performance." They cannot engage in redundant construction or only expand their production capacity. The achievements made by the textile, metallurgical and coal industries in eliminating outmoded production capacity need to be consolidated and expanded. The petrochemical, building materials, machinery, pharmaceutical, sugar refining and tobacco industries should continue to reduce their surplus and outmoded production capacities. Production capacity once eliminated must never be put to use again under any pretext or in any form. Energy restructuring will continue. We need to encourage old industrial bases to accelerate their industrial restructuring and technological transformation. We will help the cities and old mining areas that mainly exploit resources to develop new industries. Second, we need to accelerate the development of information, biology, new materials and other high and new technology industries. We will continue to organize and initiate key projects for industrialization of high and new technology in such fields as information networks, new electronic components, integrated circuits, software, new materials, and the use of modern technologies in production of traditional Chinese medicines. We need to extend the application of information technology throughout the national economy and society. Third, we need to develop tertiary industries, particularly modern service industries. We need to accelerate the development of the banking, accounting, consulting, legal and other service industries. We need to gradually adopt such organizational forms and service methods as commercial chains, physical distribution, the agency system and e-commerce. The tourism industry and cultural industries need to be greatly expanded.

Developing the western region and promoting coordinated development of different areas.We will continue to strengthen the infrastructure development and improve the ecological environment in the western region. We need to concentrate on key projects, including the Qinghai-Tibet Railway and the projects to divert gas and electricity from the western to the eastern regions. We will carry forward projects to restore cultivated land to forests, to protect natural forests, to build the northwest-north-northeast China networks of shelterbelts, and to prevent and control desertification. The various polices and measures for developing the western region must be carried out in earnest to stimulate the development of old revolutionary base areas, areas inhabited by ethnic minority groups, border areas and poverty-stricken areas. The western region needs to develop industries for which it has favorable conditions and those with local characteristics and avoid redundant construction and haphazard investment. We will prevent the transfer to the western region of factories and equipment which have been eliminated elsewhere so as not to damage the ecological environment there. The central region needs to exploit its advantages in geography and resources and create new points of economic growth. The state will assign more construction projects to the region to accelerate its development. The eastern region needs to optimize its industrial structure and vigorously develop its export-oriented economy, improve its economic quality, raise its competitiveness, and take various measures to strengthen its economic and technological cooperation with the western and central regions.

Deepening reforms centering on the reform of state-owned enterprises.We made great progress in the reform of state-owned enterprises over the past few years, but we still face many difficult problems, and we must continue to work hard and deepen the reforms. First, a modern corporate system needs to be firmly established. We will continue to adopt a standardized corporate system in state-owned enterprises, improve the corporate governance and change the way enterprises operate. This year we need to concentrate on examining the modern corporate system established in listed companies to uncover problems and solve them. We need to deepen the internal reform of enterprises, implement reforms of the income distribution system on a trial basis in a few large enterprises managed by the central authorities and companies listed on overseas stock markets, and establish effective incentive and restraint mechanisms for enterprise managers. The accounting system of the enterprises needs to be brought into conformity with international accounting practice. Enterprises need to tighten and improve their management of quality, costs and marketing. They need to accelerate the application of modern management methods and information technology. Second, positive efforts need to be made to promote the restructuring and reorganization of enterprises, and form and develop as quickly as possible a number of large companies and enterprise groups that are internationally competitive. We need to take various measures to relax control over and invigorate small and medium-sized state-owned enterprises. In restructuring and reorganizing enterprises, we must prevent the loss of state assets and evasion of bank debts. Third, we will continue to properly handle bankruptcies and mergers of enterprises through well-planned steps, and to pay special attention to making proper arrangements for laid-off workers in accordance with the government policy in order to maintain social stability. We need to appropriately increase the capital reserves in banks available to write off non-performing loans and bad debts, and we will use them mainly for bankruptcies and mergers of enterprises in key industries and regions, especially the shutdown and bankruptcies of mines with exhausted resources, military industrial enterprises and other enterprises that experience special difficulties. We will continue to free enterprises from performing social functions.

We need to carry forward the reform of monopoly industries. We need to break industrial monopolies and establish a proper degree of competition by separating the functions of the government from those of enterprises and by restructuring enterprises. We need to reform the management systems of the telecommunications, power and civil aviation industries as soon as possible and lose no time in drawing up plans for the reform of the rail

（责任编辑：中大编辑）

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