5. Implementing the strategy of reinvigorating China through science,
education and human resources and promoting cultural progress
China has entered a stage in its history where it must increase its reliance
on scientific and technological advances and innovation to drive social and
economic development. Therefore, we must attach more strategic significance to
accelerating scientific and technological development. We will fully implement
the Outline of the National Program for Long- and Medium-Term Scientific and
Technological Development to build an innovation-oriented country. We will work
quickly to launch a number of major science and technology programs and key
projects, focusing on making breakthroughs in key areas. We will continue to
strengthen basic research and research in cutting-edge disciplines as well as
research in technologies for public welfare applications. We will build major
national science and technology infrastructure projects and laboratories for
developing industrial technologies. We will strengthen the national innovation
system. We will promote reform of the management system of science and
technology, effectively coordinate the use of science and technology resources
throughout society, and apply more scientific and technological advances in
production. We will establish a mechanism to ensure stable growth of government
investment in science and technology. This year the central government will
allocate 71.6 billion yuan for investment in science and technology, a
year-on-year increase of 19.2 percent. Local governments and enterprises also
need to increase their investment in science and technology. We will further
develop philosophy and the social sciences and break new ground in theoretical
research.
We need to work hard to make nine-year compulsory education more widely
available and consolidate past progress. Over the next two years, we will
completely eliminate tuition and miscellaneous fees for all rural students
receiving compulsory education. This will be done in the western region this
year and extended to the central and eastern regions next year. We will also
continue to provide free textbooks to students from poor families and living
allowances to poor students residing on campus. Expenditures for rural
compulsory education will be fully incorporated into the central and local
government budgets, and a mechanism to guarantee funding for rural compulsory
education through a combination of allocations from the central and local
governments will be established. The main measures we will adopt are: raising
the level of budgetary guarantees for common expenditures for compulsory
education in both rural primary and secondary schools, setting up a mechanism to
fund repair and renovation of rural primary and secondary school buildings, and
improving the mechanism for guaranteeing payment of primary and secondary school
teachers' salaries. To fund these measures, central government budget
expenditures for compulsory education will increase by 218.2 billion yuan over
the next five years. Elimination of tuition and miscellaneous fees for
compulsory education in all rural areas is an important milestone in the history
of the development of education in China, and it is bound to have a far-reaching
impact on raising the overall quality of the people of China. We also need to
solve the problems the children of low-income urban families and rural families
working in cities have in receiving a nine-year compulsory education to ensure
that all children have access to compulsory education. We will continue to carry
out the plan to make nine-year compulsory education basically universal and to
basically eliminate illiteracy among young and middle-aged adults in the western
region, and ensure that the plan's target s are met by 2007 as scheduled.
Developing vocational education is an important and pressing task, for which 10
billion yuan will be appropriated from the central government budget over the
next five years. We will make innovations in education and in instruction models
and methods in higher education, strive to improve the quality of university
teaching, and promote the development of more leading universities and key
disciplines. All schools need to comprehensively promote education that ensures
the well-rounded development of students. We will enhance the political
integrity and professional competence of teachers and train large numbers of
outstanding educators.
We will follow the strategy of reinvigorating the country through human
resources and intensify development of a well-trained workforce. We will
increase funding for human resource development through various sources,
strengthen the role of market forces in allocating human resources, and
standardize management of the human resource market.
We will intensify development of socialist culture. We need to do a good job
cultivating ideals and ethics, particularly among young people. We will carry
out extensive public activities to promote cultural and ethical progress. We
will deepen reform of the cultural system and develop cultural undertakings and
cultural industries. We will strengthen efforts to build cultural facilities,
paying particular attention to cultural development at the local level in rural
areas, and improve the system of culture-related services for the public. We
will strongly support social programs in literature, art, radio and television,
film, mass media, and publishing. We will strengthen the protection of cultural
and natural heritage sites. We will vigorously support folk culture and art and
increase cultural exchanges with other countries. We will improve management of
the culture market and steadfastly fight against pornography and illegal
publications. We will launch extensive fitness programs for the general public
and raise the level of competitive sports. We will continue to do a good job
preparing for the 2008 Olympic Games in Beijing and the 2010 World Exposition in
Shanghai.
6. Pressing ahead with reform and opening up
The decision to implement the reform and opening up policy constitutes a
major policy decision bearing on the destiny of our country. Reform is now going
through a very difficult period, and we must strengthen our resolve to
accelerate all reforms and continue making progress in major reforms having an
overall impact this year.
We need to implement the Company Law of the People's Republic of China and
accelerate introduction of the shareholding system in large state-owned
enterprises. We will improve their ownership structure, corporate governance,
and corporate incentive and restraint mechanisms, and speed up the formation of
a number of large companies and enterprise groups that are internationally
competitive. We will intensify reform of wholly state-funded enterprises and
monopoly industries, ease market access, and encourage investment from various
sources and diversified ownership. We will strengthen the oversight system for
state assets by establishing a sound operating and budget system for state
capital, a sound performance evaluation system and a sound system for assigning
responsibility for major losses of state assets. We will standardize the process
of changing the corporate structure and transferring ownership of state-owned
enterprises to prevent loss of state assets and protect the lawful rights and
interests of their employees. We will promote reform and development of
collectively owned enterprises. We will conscientiously implement policy
measures to encourage, support and guide the development of the non-public
sector and continue working to create a legal, policy and market environment
that ensures fair competition for all enterprises regardless of their type of
ownership.
We will accelerate reform of the financial system. First, we will firmly
press ahead with the shareholding reform of state-owned commercial banks. While
keeping a controlling share in the state's hands, we will work to improve the
banks' ownership structure. We will introduce advanced foreign management
practices, standardize corporate governance, improve internal control and
management, and promote structural innovations. Second, we will vigorously
develop the capital market. We will enforce the Securities Law of the People's
Republic of China and take steps to effectively strengthen the structural
foundation of the securities market. We will work hard to improve the
performance of listed companies, continue to do a good job in overall regulation
of securities companies, and enhance market supervision in accordance with the
law to create an open, just, fair and transparent market environment. We will
continue to reform the shareholder structure of listed companies. We will
energetically yet steadily develop the market for bonds and futures. Third, we
will deepen financial reforms in rural areas. We will improve the system of
rural credit cooperatives, carry out reform of the Agricultural Bank of China
and the Agricultural Development Bank of China and increase the pace of
innovation in banking and finance in rural areas to improve the banking system
and financial services there. In addition, we will deepen the reform of the
insurance industry and expand the scope of allowed activities, and promote
reform of policy banks, postal savings institutions and other financial
institutions. We will work to strengthen and improve financial oversight and
strengthen capital requirements for banks. We will rigorously prosecute parties
committing illegal and criminal acts in the financial sector in accordance with
the law, guard against general financial risks, and work to maintain financial
stability and security.