Opportunities
and
Challenges
for
the
Chinese
Economy
in
the
21st
Century
Li
Tieying
I.
Major
Achievements
Scored
in
the
Development
and
Reform
of
the
Chinese
Economy
since
1978
After
the
Third
Plenary
Session
of
the
Eleventh
Central
Committee
of
the
Communist
Party
of
China
(CPC)
in
December
1978
the
Chinese
socialist
cause
entered
a
new
historical
stage.
Over
the
past
twenty
and
more
years
great
achievements
have
been
scored
in
China’s
reform,
opening-up
and
modernization
drive,
profound
changes
have
taken
place
in
the
society
and
economy
and
overall
national
strength
has
been
considerably
enhanced.
The
gross
domestic
product
(GDP)
in
2000
was,
in
parity
pricing
terms,
6.4
times
that
of
1978,
with
an
average
annual
growth
rate
of
9.52%.
By
the
late
1990s,
the
output
of
China’s
main
industrial
and
agricultural
products
such
as
grain,
cotton,
oilseeds,
coal,
iron
and
steel,
electricity,
chemical
yarn
and
electrical
domestic
appliances,
had
reached
the
forefront
of
the
world.
The
volume
of
China’s
annual
imports
and
exports
increased
from
US$
20.64
billion
in
1978
to
US$
474.29
billion
in
2000.
China
reached
the
strategic
goal
of
“two
steps”
it
had
set
in
the
early
1980s,
that
is,
by
the
year
2000
China
would
quadruple
its
1980
per
capita
GNP
and
provide
a
“fairly
comfortable”
life
for
its
people.
Starting
from
2001,
China
began
its
march
towards
the
third
of
the
strategic
goals:
full-fledged
modernization
and
a
per
capita
income
at
the
level
of
moderately
developed
countries
by
the
middle
of
the
21st
century.
A
market-oriented
reform
was
initiated
as
early
as
1979
and,
following
many
years
of
investigation
in
theory
and
practice,
it
was
decided
at
the
Fourteenth
National
Congress
of
the
CPC
in
1992
that
the
goal
was
to
develop
a
socialist
market
economy.
After
more
than
twenty
years
of
reform,
a
socialist
market
economy
has
now
been
basically
instituted
in
China,
as
shown
by
the
following:
Firstly,
the
economic
system
and
operating
mechanism
of
the
countryside
have
seen
radical
change.
The
rural
people’s
communes
set
up
on
the
basis
of
“a
larger
size
and
a
higher
degree
of
public
ownership”
and
“the
integration
of
government
administration
and
commune
management”
were
disintegrated
in
the
early
1980s.
In
their
place
were
introduced
a
two-tier
management
system
based
on
the
household
contract
system
and
a
combination
of
unified
management
with
independent
operation,
which
is
more
compatible
with
a
market
economy
and
gives
the
peasants
more
autonomy
in
production
and
management,
and
the
right
to
free
migration.
Secondly,
the
ownership
structure
has
been
readjusted
and
reformed,
and
the
principle
was
formulated
of
keeping
public
ownership
in
a
dominant
position,
while
developing
diversified
economic
sectors
side
by
side.
The
proportion
of
state
ownership
in
the
national
economy
dropped
from
78%
in
1978
to
40%
in
1999
while
the
proportion
of
non-state
ownership
rose
from
22%
to
60%
during
the
same
period.
Of
the
latter,
the
collectively
owned
sector
was
35%
and
private
economy
was
25%
(only
0.9%
in
1978).
The
first
two
sectors
constituted
75%
of
the
national
economy,
which
indicates
the
dominance
of
public
sectors
of
the
economy.
The
readjustments
of
ownership
structure
have
facilitated
the
development
of
productive
forces.
Thirdly,
the
reform
of
the
state-owned
economy
has
made
breakthroughs
and
the
state
enterprises
have
shifted
from
administrative
appendages
to
agents
in
the
market
that
are
independent
and
responsible
for
their
own
profits
and
losses.
Most
of
the
state-owned
enterprises
have
been
transformed
into
companies
with
limited
liabilities
and
some
have
become
listed
companies,
going
in
for
the
modern
enterprise
system
as
entities
with
diversified
equity.
A
large
number
of
small
state-owned
enterprises
have
been
turned
into
enterprises
with
multiple
property
rights
through
joint
stock
partnerships,
auction
and
capital-pooling,
and
some
have
changes
their
operating
forms
through
leasing
and
contract
operation.
Fourthly,
we
have
successfully
reformed
the
price
system
and
constructed
a
mechanism
for
setting
prices
mainly
through
the
market.
The
twisted
relationships
among
the
prices
of
basic
industry
products,
manufactured
products,
industrial
goods
and
of
farm
produce
deriving
from
the
planned
economy
have
been
basically
corrected
and
streamlined.
Except
for
a
few
vital
commodities
and
services
that
have
a
close
bearing
on
the
national
economy
and
the
well-being
of
the
people,
prices
of
more
than
95%
of
commodities
and
services
are
determined
by
the
market.
The
market
determination
of
prices
now
serves
as
the
main
lever
to
regulate
supply
and
demand
and
achieve
a
rational
allocation
of
resources.
Initial
success
has
been
made
in
setting
up
factors
markets,
especially
a
capital
market.
Fifthly,
we
reformed
the
government
functions,
and
a
basic
change
from
direct
to
indirect
control
has
taken
place
in
governmental
regulation
and
control
of
the
economy.
China
has
pushed
the
reform
in
the
macroscopic
control
system
in
the
following
five
ways:
·
Reform
of
the
planning
system.
The
planning
departments
of
the
government
have
shifted
their
emphasis
from
issuing
production
and
circulation
quotas
to
formulating
long-term
plans
of
national
economic
development
and
coordinating
relations
between
various
economic
sectors.
·
Reform
of
the
investment
system.
The
enterprises
of
all
economic
sectors
are
becoming
real
investment
entities
and
they
are
encouraged
to
get
their
funds
directly
from
the
capital
market.
·
Reform
of
the
financial
system.
A
tax-sharing
system
was
introduced
in
1994
whereby
the
central
and
local
governments
split
the
taxes
and
each
collects
its
own.
·
Reform
of
the
monetary
system.
An
initial
system
of
macro-control
and
supervision
by
the
central
bank
has
been
set
up,
non-commercial
banking
has
been
separated
from
commercial
banking
and
specialized
banks
like
the
Industrial
and
Commercial
Bank,
the
Agricultural
Bank,
China
Bank
and
the
Construction
Bank
are
being
gradually
turned
into
commercial
banks.
·
Reform
of
the
government’s
mode
of
economic
management.
We
have
made
great
effort
to
separate
the
functions
of
the
government
from
those
of
enterprises
and
cancelled
the
specialized
departments
of
economic
management.
The
government
no
longer
directly
administers
the
internal
affairs
and
business
operations
of
the
enterprises,
but
guides
them
and
standardizes
their
production
and
operating
activities
by
economic
and
legal
means.
Sixthly,
the
policy
of
opening
to
the
outside
world
has
scored
considerable
achievements
and
a
radical
change
from
a
closed
to
an
open
economy
has
taken
place
in
foreign
economic
relations.
In
the
early
1980s
China
set
up
four
special
economic
zones
--
Shenzhen,
Zhuhai,
Shantou
and
Xiamen.
In
the
middle
of
the
1980s
China
opened
fourteen
coastal
cities
from
Dalian
in
Northeast
China
to
Beihai
in
Guangxi
Autonomous
Region.
Later
China
established
the
Hainan
Special
Economic
Region
and
the
Pudong
New
Area
in
Shanghai.
Since
the
early
1990s
China
has
pursued
an
omni-directional
open
policy
and
now
a
pattern
of
multilevel,
multifarious,
wide-ranging
and
omni-directional
opening
up
is
already
in
its
place.
Structural
reform
in
foreign
trade
has
been
continuously
deepened
and
the
mandatory
planning
reduced.
By
the
end
of
2001
a
single
exchange
rate
system
was
set
up
and
the
RMB
is
now
convertible
through
current
accounts.
Over
the
past
twenty
years
the
foreign
capital
actually
used
reached
395.4
billion
US
dollars.
There
are
now
more
than
390,000
enterprises
with
foreign
investment,
employing
17
million
people.
The
export
value
of
the
products
of
enterprises
with
foreign
investment
accounts
for
40
percent
of
the
total
value
of
industrial
exports.
The
policy
of
opening
to
the
outside
world
has
brought
about
great
changes
in
China’s
economy:
foreign
capital
and
advanced
technology
have
been
introduced
into
China,
accelerating
the
upgrading
and
renewing
of
products
and
the
expansion
of
imports
and
exports.
Along
with
these
also
come
the
advanced
management
techniques
and
the
operating
mechanisms
compatible
with
the
market
economy.
The
main
reason
for
the
great
success
in
China’s
post-1978
reforms
is
that
the
Chinese
Communists,
after
summing
up
their
historical
experiences
and
lessons,
corrected
their
pre1978
“Leftist”
mistakes,
and
have
upheld
the
principle
of
emancipating
the
mind
and
seeking
truth
from
facts.
During
the
process
of
reform
and
opening
up
we
proceed
from
the
actual
conditions
in
China,
respect
the
initiative
of
the
people,
learn
and
refer
to
overseas
experience
and
judge
everything
by
the
fundamental
criteria
of
the
“three
favorables,”
namely,
whether
it
is
favorable
for
promoting
the
growth
of
the
productive
forces
in
a
socialist
society,
for
increasing
the
overall
strength
of
the
socialist
state
and
for
raising
the
people’s
living
standards.
We
have
thus
blazed
a
road
of
building
socialism
with
Chinese
characteristics
under
the
guidance
of
Deng
Xiaoping
theory.
II.
Challenges
to
the
Development
of
Chinese
Economy
in
the
21st
Century
We
are
confident
of
the
prosperity
of
Chinese
economy
in
the
new
century
and
soberly
aware
of
the
challenges
posed
to
us.
First
of
all,
the
pressure
of
resources,
ecology
and
environment
on
sustainable
development.
While
China
is
rich
in
resources,
per
capita
shares
in
them
are
rather
low,
below
the
average
level
of
the
world
in
many
items.
For
example,
the
total
volume
of
fresh
water
in
China
is
2.8
trillion
cubic
meters,
making
it
the
sixth
largest
fresh
water
country
in
the
world.
But
in
terms
of
per
capita
shares
China
takes
up
the
109th
place
among
the
counties
in
the
world,
with
only
2,400
cubic
meters
per
capita
or
a
quarter
of
the
world
average.
The
forest
area
is
134
million
hectares
and
the
forest
cover
rate
is
13.92%,
while
the
per
capita
volume
of
wood
storage
is
only
13%
of
the
world
average.
The
total
area
of
land
under
cultivation
is
95
million
hectares,
with
only
0.07
hectare
per
head,
less
than
a
third
of
the
world
average.
Soil
erosion
and
desertification
threaten
to
further
reduce
the
arable
land.
Moreover,
some
important
resources
like
fine
quality
energy
deposits
are
also
in
serious
shortage.
All
these
impose
severe
restraints
on
sustainable
development.
Next,
the
steady
growth
of
total
population
and
the
aging
of
population
bring
about
more
difficulties
for
employment
and
social
pension
security.
The
total
population
will
be
still
on
the
increase
during
the
first
half
of
the
21st
century
due
to
a
large
population
base
and
a
grim
situation
will
loom
for
employment.
Meanwhile,
the
age
structure
of
Chinese
population
is
undergoing
a
rapid
change
and
the
pace
of
its
aging
is
accelerating.
By
2010
the
number
of
people
over
65
years
old
will
reach
113.78
million,
making
up
8.2%
of
the
total
population.
With
a
low
level
of
economic
development
too
large
a
proportion
of
the
aged
will
bring
about
more
difficulties
for
employment
and
exert
unfavorable
influence
over
the
economic
growth
and
the
improvement
of
the
people’s
living
standard.
Thirdly,
the
unreasonable
economic
structure
is
an
acute
problem
in
China
as
manifested
by
the
following:
The
position
of
agriculture
as
the
foundation
of
the
economy
is
not
stable,
agricultural
productivity
is
low,
there
is
no
outlet
for
surplus
labor
in
rural
areas
to
be
channeled
to
other
sectors,
and
the
income
of
farmers
is
growing
very
slowly.
In
the
industrial
setup
technology
and
knowledge
intensive
high-tech
industries
account
for
a
small
percentage
while
general
processing
industries
with
low
added
value
have
a
relatively
surplus
capacity
and
the
supply
exceeds
demand.
With
regard
to
the
organizational
structure
of
enterprises,
diseconomy
of
scale
is
a
general
phenomenon
and
there
are
no
large
enterprises
that
can
compete
with
big
transnational
corporations.
The
output
value
of
tertiary
industry
constitutes
a
rather
small
percentage
of
the
GNP,
and
the
number
of
employees
in
these
industries
is
not
large
enough.
Fourthly,
development
is
unbalanced
between
urban
and
rural
areas
and
between
different
regions;
the
gap
between
them
is
quite
considerable.
China
remains
a
developing
country
and
has
a
typical
dualistic
economy.
On
the
one
hand,
it
has
established
a
huge
industrial
system
and
the
output
of
secondary
industry
makes
up
50%
of
the
GDP;
on
the
other
hand,
urbanization
remains
at
a
low
level,
70%
of
its
population
make
a
living
on
traditional
agriculture
and
a
wide
gap
exists
between
town
and
country.
The
average
income
ratio
of
urban
to
rural
residents
is
3:1.
At
the
same
time,
the
gap
finds
its
expression
between
eastern
China
and
western
China.
The
eastern
coastal
regions
are
more
developed
economically
than
the
western
regions,
the
per
capita
GDP
ratio
being
three
or
four
to
one.
Fifthly,
China
has
initially
set
up
a
socialist
market
economy,
but
the
task
of
economic
restructuring
is
tar
from
being
accomplished
and,
in
particular,
the
reform
in
the
state-owned
enterprises
is
confronted
with
many
difficulties.
It
is
still
to
be
solved
how
the
state
as
owner
will
effectively
encourage
and
restrain
the
management
of
the
state-owned
enterprises
after
these
enterprises
become
the
independently
operating
entities.
A
modern
enterprise
system
according
both
with
market
principles
and
with
the
actual
conditions
in
China
has
yet
to
be
formulated.
The
high
rate
of
debts
and
high
proportion
of
redundant
personnel
in
the
state-owned
enterprises
hinders
their
competitiveness.
Monetary
institutional
reform
must
be
further
deepened
and
how
to
solve
and
prevent
financial
risks
waits
for
a
better
answer.
There
are
also
problems
to
be
solved
in
the
markets
for
factors
such
as
capital
and
labor,
not
to
mention
the
investment
and
social
security
systems.
Sixthly,
corruption
is
a
historical
phenomenon
prevalent
in
all
countries.
During
the
period
of
transition
towards
the
socialist
economy
the
traditional
highly
concentrated
administrative
restraints
have
gradually
been
weakened
while
new
systems,
mechanisms
and
legal
institutions
have
yet
to
be
perfected,
giving
rise
to
many
loopholes.
As
a
result,
corruption
cases
of
trading
power
for
money
and
abusing
power
for
personal
gain
are
rather
numerous,
doing
great
harm
to
the
relations
between
the
Party
and
the
government
and
the
broad
masses
of
the
people
and
negatively
impacting
on
the
reform,
opening
up
and
economic
construction.
Seventhly,
following
the
return
of
Hong
Kong
and
Macao
the
complete
reunification
of
the
motherland
is
an
important
historical
task
confronting
the
Chinese
people.
The
CPC
and
the
Chinese
government
have
reiterated
once
and
again
their
adherence
to
the
principle
of
“peaceful
reunification
and
one
country,
two
systems.”
However,
with
the
connivance
of
and
support
from
international
anti-China
forces
the
Taiwanese
authorities
have
deliberately
avoided
and
refused
to
acknowledge
the
principle
of
“one
China”
and
continue
to
stick
to
the
stance
of
an
independent
Taiwan.
They
have
been
engaging
in
arms
expansion
in
a
vain
attempt
to
obstruct
the
reunification
of
Taiwan
and
the
mainland.
How
to
accomplish
the
great
cause
of
the
peaceful
reunification
is
another
major
problem
faced
by
us.
In
international
terms,
China
also
faces
rigorous
tests
with
the
approach
of
the
new
century.
First,
the
process
of
globalization
will
hasten
its
pace,
the
Chinese
economy
will
be
more
closely
related
to
the
world
market;
transnational
corporations
will
appear
on
the
market
in
China
as
fierce
competitors,
thus
making
the
domestic
economy
an
arena
of
international
competition.
The
entry
of
China
into
the
WTO
will
drive
forward
the
reform,
opening
up
and
economic
development
of
China,
but
it
will
also
place
pressure
on
the
economy,
especially
on
agriculture,
technology
intensive
industries
and
the
banking
and
insurance
industries,
in
which
China
lags
behind
the
developed
countries.
Second,
China
will
face
competition
from
the
developed
countries
in
science
and
technology.
In
the
21st
century,
scientific
and
technological
advance
will
be
the
primary
force
driving
human
society
forward.
The
outcome
of
economic
competition
between
nations
hinges
on
scientific
and
technological
innovation
and
the
capability
to
transform
science
and
technology
into
productive
forces.
Whoever
has
the
highest
technical
level
and
the
most
powerful
transforming
capability
will
occupy
the
dominant
position
in
the
increasingly
fierce
international
competition.
For
historical
and
institutional
reasons,
although
China
has
greatly
improved
its
capacity
for
innovation
since
the
reform
and
opening
up,
it
is
still
week
in
this
field.
Achievements
in
scientific
research
cannot
smoothly
be
turned
into
real
productive
forces;
scientific
and
technological
advances
make
far
less
contribution
to
economic
growth
in
China
than
in
developed
countries.
China
still
has
a
long
way
to
go
to
catch
up
with
the
advanced
countries
in
science
and
technology.
On
top
of
that,
China
must
face
up
to
hegemony
and
power
politics.
The
mainstream
will
remain
unchanged
in
the
21st
century,
but,
in
the
wake
of
the
cold
war,
a
few
superpowers
continue
to
pursue
hegemony
and
power
politics
and
continue
to
keep
to
cold
war
thinking.
They
invent
every
excuse
to
interfere
in
the
internal
affairs
of
other
countries,
using
force
or
the
threat
of
it
against
other
states
and
violating
their
sovereignty.
They
hate
to
see
a
powerful
and
prosperous
China
and
therefore
try
every
means
to
contain
China
and
check
its
advance.
III.
Tasks
and
Opportunities
for
the
Development
of
Chinese
Economy
Looking
ahead,
China
will
face
severe
challenges
in
its
economic
development,
but
it
also
has
many
favorable
factors.
China
began
to
implement
the
tenth
Five-year
Plan
in
2001.
The
goal
is
for
the
average
annual
growth
rate
of
GDP
to
be
7%
in
the
next
ten
years,
and
the
present
GDP
to
be
doubled
by
the
end
of
2010.
The
present
relatively
comfortable
life
of
the
people
will
be
further
improved,
the
economic
structure
will
be
optimized
and
the
national
aggregate
economic
strength
will
be
greatly
enhanced.
After
the
cold
war,
the
world
is
still
full
of
contradictions
and
local
conflicts
have
broken
out
here
and
there.
However,
peace,
development,
social
progress
and
a
prosperous
economy
are
what
the
people
all
over
the
world
want:
they
are
the
main
themes
of
the
21st
century
and
striving
for
their
realization
is
an
unstoppable
trend
of
history.
China
will
continue
to
pursue
an
independent
and
peaceful
foreign
policy
and
strive
for
a
relatively
long
period
of
peace
in
the
international
environment
so
that
it
can
concentrate
its
efforts
on
economic
construction.
China
is
still
in
the
throes
of
industrialization
and
fan
from
completing
this
task.
The
per
capita
GDP
falls
short
of
1,000
US
dollars,
belonging
to
the
lower-middle
category.
China’s
advantages
as
a
newcomer
to
modernization
have
not
been
given
full
play.
Meanwhile,
as
a
big
developing
country
with
the
largest
population
in
the
world,
China
has
great
market
potential
and
a
broad
space
for
development
from
infrastructure,
manufacture
to
services,
in
either
urban
or
rural
areas,
in
either
the
east
or
the
west
regions.
Tapping
these
potentials
will
contribute
to
the
achievement
of
the
third-phase
strategic
goal
of
socioeconomic
development,
industrialization
and
modernization
of
national
economy.
Over
the
twenty
and
more
years
since
the
reform
and
opening
up
we
have
maintained
sustained
and
rapid
development
of
the
national
economy.
The
overall
national
capacity
of
the
country
has
been
considerably
strengthened.
The
bottlenecks
in
infrastructure
industries
that
long
held
back
national
economic
development
have
now
been
loosened.
In
the
field
of
science
and
technology,
a
complete
research
and
development
system
consisting
of
basic,
applied
and
development
research
is
shaping
up,
which
will
lay
a
good
foundation
for
China’s
economic
development
in
the
21st
century.
China
has
initially
established
a
socialist
market
economy,
an
ownership
structure
with
public
and
state
ownership
in
the
dominant
position
and
diverse
forms
of
ownership
developing
side
by
side
is
coming
into
being,
the
market
is
beginning
to
play
a
fundamental
role
in
resources
allocation
under
the
macro
control
by
the
state.
All
these
changes
will
constitute
institutional
guarantees
for
the
development
of
Chinese
economy.
A
worldwide
scientific
and
technological
revolution
is
in
the
making,
with
information
technology
as
the
forerunner
and
with
microelectronics,
biological
engineering,
new
energy
resources,
new
materials,
aviation
and
aeronautics,
and
ocean
engineering
technologies
as
the
main
contents.
And
achievements
in
the
revolution
are
gradually
being
commercialized
and
industrialized.
New
high-tech
sectors
are
emerging
and
traditional
industries
are
being
transformed
with
high
technologies.
All
these
provide
new
opportunities
for
China
to
make
use
of
the
achievements
of
technical
revolution
in
other
countries
and
give
full
play
to
its
staying
advantages
in
order
to
bring
about
a
leap
in
the
development.
Since
the
1990s
economic
globalization
has
gathered
momentum.
There
have
been
more
and
closer
contacts
between
countries
and
regions
through
commodity
trade,
capital
flow,
technical
diffusion
and
information
transmission,
exerting
extensive
and
profound
influence
over
the
politics,
economy
and
culture
of
all
countries.
As
a
big
developing
country,
China
will
take
an
active
part
in
the
international
division
of
labor,
exchange
and
competition,
take
up
the
gauntlet
of
economic
globalization,
and
at
the
same
time
make
every
effort
for
the
establishment
of
a
fair
and
rational
new
international
economic
order.
As
the
ninth
biggest
export
country,
China
will,
with
its
entry
into
the
WTO,
have
more
opportunities
to
participate
in
international
cooperation
and
division
of
labor,
promote
the
marketing
of
Chinese
commodities
all
over
the
world
and
make
export
further
stimulate
the
growth
of
domestic
economy.
The
comparative
advantage
of
cheaper
labor
will
still
be
present
for
China
in
international
competition
as
the
country
is
very
rich
in
human
resources.
In
order
to
seize
the
opportunities,
face
up
to
challenges
and
attain
the
goal
of
socioeconomic
development
in
the
new
century,
China
will
continue
to
take
Deng
Xiaoping
theory
as
the
guidance
and
march
forward
along
the
road
of
building
socialism
with
Chinese
characteristics.
First,
we
shall
continue
to
make
economic
construction
our
central
task
and
balance
reform
development
and
stability
in
order
to
create
a
favorable
social
and
political
environment
for
economic
development.
Second,
we
shall
further
deepen
economic
restructuring,
make
strategic
readjustments
to
the
state-owned
economy,
effectuate
strategic
reorganization
of
state-owned
enterprises
and
strive
to
seek
various
forms
of
for
materializing
public
ownership.
Further,
we
will
establish
and
improve
the
modern
enterprise
and
social
security
systems,
actively
standardize
and
develop
production
factor
markets,
and
improve
the
macroeconomic
control
system,
including
reform
and
improvement
of
tax,
monetary
and
investment
institutions.
Third,
we
shall
continue
to
readjust
and
optimize
the
economic
structure
with
the
main
aim
being
to
strengthen
the
competitiveness
of
industries
and
enterprises.
The
main
tasks
are
as
follows:
Readjust
the
rural
economic
structure,
promote
agricultural
industrialization
and
urbanization
and
hasten
the
steps
of
agricultural
modernization,
with
a
focus
on
increasing
farmers’
incomes;
Accelerate
development
of
high-tech
industries
with
the
information
industry
as
the
leading
edge,
base
the
national
economy
on
information
and
networks
and
link
informationization
with
industrialization;
Transform
traditional
industries
with
advanced
technologies
and
equipment,
speed
up
the
technical
upgrading
of
traditional
industries
and
the
renewal
of
products;
Encourage
and
guide
the
tertiary
industry
so
that
it
will
develop
at
an
accelerated
pace.
Open
up
new
areas
of
service
and
raise
service
quality.
Fourth,
we
shall
implement
the
strategy
of
developing
the
country
by
relying
on
science
and
technology,
enhance
the
scientific
and
technological
innovation
capacity
and
improve
the
quality
of
the
whole
population.
The
main
measures
are:
With
economic
development,
gradually
increase
input
in
scientific
research,
technical
development
and
education;
With
reform
as
a
driving
force
and
through
institutional
innovations,
reintegrate
science,
technology
and
education
with
economic
development,
and
encourage
enterprises
to
undertake
technical
innovation;
Closely
follow
world
developments
in
science
and
technology
and
the
knowledge
economy,
and
concentrating
on
selected
areas
to
speed
up
the
high-tech
development
and
its
industrialization.
Fifth,
we
shall
promote
rational
distribution
and
coordinated
development
of
regional
economies
and
gradually
narrow
the
gap
between
regions.
Taking
advantage
of
its
favorable
conditions,
the
eastern
part
of
the
country
will
continue
to
play
its
role
in
leading
the
reform
and
opening
up.
It
will
actively
develop
technology
and
knowledge
intensive
industries,
raise
its
ability
to
take
part
in
international
competition
and
accelerate
the
process
of
modernization.
The
central
zone
will,
on
the
basis
of
consolidating
the
position
of
agriculture,
promote
industrialization,
vigorously
transform
traditional
industries,
raise
productivity
and
operating
efficiency
of
industry.
China
will
actively
and
steadily
carry
out
the
strategy
of
developing
the
western
region,
focusing
on
rational
tapping
and
utilization
of
natural
resources,
protection
and
improvement
of
biological
environment
and
construction
of
infrastructure.
Sixth,
we
shall
further
expand
in
opening
to
the
outside
world
and
strive
to
do
better
in
this
regard.
Taking
advantage
of
its
entry
into
the
WTO,
conforming
to
the
trend
of
economic
globalization
and
in
accordance
with
the
rules
of
international
economic
operation,
China
will
extensively
take
part
in
international
economic
cooperation
and
competition,
strive
to
raise
the
level
and
quality
in
the
use
of
foreign
capital,
and
channel
foreign
capital
into
the
development
of
the
middle
and
western
parts
of
China,
into
the
technical
transformation
of
existing
enterprises
and
into
new
and
high-tech
industries.