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II. Suggestions for the Work of the Government in 2003

The Sixteenth National Congress of the Communist Party of China set the goal of building a well-off society in an all-round way in the first 20 years of this century, and pointed the way for opening a new stage in the cause of building socialism with Chinese characteristics. The year 2003 is the first year of our work to comprehensively implement the spirit of the Sixteenth Party Congress, and success in the work of the government for this year will be of tremendous importance.

The general requirements for our work this year as set forth by the Central Committee of the Communist Party of China are:take Deng Xiaoping Theory and the important thought of Three Represents as our guide; earnestly carry forward the spirit of the Sixteenth Party Congress; steadfastly give top priority to development in the Party's governance and rejuvenation of the country; vigorously respond to difficulties and challenges caused by changing domestic and international environments; continue to follow the policy of expanding domestic demand as well as the proactive fiscal policy and prudent monetary policy; further deepen the reform and open still wider to the outside world; accelerate the strategic readjustment of the economic structure; promote a sustained, rapid and sound development of the national economy and integrate speed with structure, quality and efficiency; correctly handle the relationships among reform, development and stability; effectively improve the development of democracy and the legal system and the promotion of spiritual civilization and Party building; and promote a coordinated development of socialist material civilization, political civilization and spiritual civilization.In keeping with these general requirements, and considering the upcoming election of a new government at the First Session of the Tenth National People's Congress, and after careful deliberation, the State Council wishes to put forward the following suggestions for the work of the government in 2003:

1. Continue to expand domestic demand and achieve a steady and rapid economic growth

Maintaining the good momentum of economic growth is the basis for success in all fields of our work. Based on our overall analysis of the situation at home and abroad, we set the target for 2003 economic growth at around 7%. This growth rate is both necessary and achievable through hard work. It is imperative that we pay adequate attention to raising the quality and efficiency of economic growth by readjusting and optimizing the economic structure. 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.

First of all, we should strive to expand consumption demand. Given the current situation, this is more important than greater investment demand. We should continue to increase the income of urban and rural residents, especially those with low income, and work hard to raise the living standards of the population. We should do everything possible to increase farmers' income and lighten their burden. We should effectively solve the problems the needy face in work and livelihood. Our original plan to raise the salaries of government employees as well as retirees' pensions in the second half of last year was postponed in order to first solve the problems of the urban poor and to harmonize relationships among the interests of all quarters. This measure, however, will take effect this year. We should continue to improve the consumption climate by improving relevant policies and expanding areas of consumer spending.

A relatively fast increase in investment should be maintained. Based on an overall consideration of various factors, we plan to issue 140 billion yuan of long-term construction treasury bonds in 2003. We should redirect the use of funds to be raised from treasury bonds as follows. Priority should be given to ongoing projects and projects which are near completion, and to a selected number of new projects which are wholly necessary. More support should be given to development of the western region, projects to improve production and living conditions in rural areas, technological transformation of enterprises, improvement of the ecological environment, and undertakings in science, education, culture and health care. 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 guard against redundant low-level development. In some localities, real estate investment is expanding too rapidly and too many luxury homes are being built. We must heighten our vigilance against risks and potential losses from blind development.

While continuing to watch out for and defuse financial risks, we should generate more financial resources to support economic development. Banks must give priority to extending matching loans to projects financed by treasury bonds, lend more money to enterprises that are profitable and trustworthy and have a ready market for their products, provide more credit to support agriculture, the rural economy, small and medium-sized enterprises and the service industry, and standardize and increase consumer credit. We should improve banking services, tighten financial regulation, and develop securities, insurance and money markets in accordance with established standards.

We should conscientiously handle fiscal and taxation work and vigorously increase revenue and cut expenditures. 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. Financial departments at all levels should arrange their expenditures so that funding for key items is ensured. They must first pay wages and salaries on time and in full, continue to increase their social security contribution, increase spending on agriculture, compulsory education and health care in rural areas, and increase transfer payments to the country's central and western regions and areas in difficulties.

2. Promote all-round development of agriculture and the rural economy

We should continue to take developing agriculture and the rural economy and increasing farmers' income as the top priority of our economic work. Economic and social development in urban and rural areas must be coordinated, and work relating to agriculture, rural areas and farmers must be done well.

We should accelerate structural readjustment in agriculture and the rural economy. We should continue readjusting the distribution of agricultural areas. We should vigorously develop animal husbandry, aquatic farming and the processing of agricultural products. We should vigorously expand the industrial management of agriculture, better organize farmers' access to the market and raise the overall efficiency of agriculture. We should forcefully increase export of agricultural products. While returning more farmland to forests and grass, we should implement without delay the national plan for the conservation of grasslands. We should strengthen

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