Following is the full text of the Report on the Implementation of the 2003 Plan for National Economic and Social Development and on the 2004 Draft Plan for National Economic and Social Development, delivered at the Second Session of the Tenth National People's Congress on March 6, 2004:

REPORT ON THE IMPLEMENTATION OF THE 2003 PLAN FOR NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT AND ON THE 2004 DRAFT PLAN FOR NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT

Ma Kai Minister in Charge of the National Development and Reform Commission

Fellow Deputies,

As entrusted by the State Council, I am now reporting to this session on the implementation of the 2003 Plan for National Economic and Social Development and on the 2004 Draft Plan for National Economic and Social Development. I am presenting these to you for your examination and approval and also for comments and suggestions from members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).

I. Implementation of the 2003 Plan for National Economic and Social Development

Acting in accordance with the resolution on economic and social development adopted at the First Session of the Tenth National People's Congress (NPC), the people of all our ethnic groups vigorously worked under the leadership of the Communist Party of China (CPC) to promote reform, opening up and the modernization drive over the past year. We won a great victory in the fight against the severe acute respiratory syndrome (SARS), and we overcame natural disasters and other difficulties. Our national economy had rapid growth, good performance and strong vitality, and we successfully attained our main targets for economic and social development.

1. The economy grew rapidly, and economic efficiency improved significantly. China's GDP hit 11.6694 trillion yuan in 2003, a 9.1% increase over the previous year. Per capita GDP rose to 9,030 yuan, exceeding the important benchmark of US$1,000 for the first time when calculated at the present exchange rate. Growth of domestic demand was accelerated. Investment in fixed assets for the whole country was 5.5118 trillion yuan, a year-on-year increase of 26.7%. Retail sales of consumer goods totaled 4.5842 trillion yuan, up 9.1%. Consumer prices rose by 1.2%.

Economic efficiency improved in step with economic growth. Government revenue for the entire country was 2.17 trillion yuan, 14.7% more than the previous year. Economic efficiency in the industrial sector reached a record high. Total profits of state-owned and large non-state owned industrial enterprises were 815.2 billion yuan, an increase of 42.7%, 22 percentage points greater than the previous year. State-owned enterprises and enterprises with the controlling stake held by the state generated 378.4 billion yuan in profits, an increase of 45.2%. Of the industrial products made last year, 98.1% were sold.

2. Structural adjustment was vigorously carried forward, and economic vitality continued to improve. The acreage devoted to high-quality crop varieties increased. The acreage sown to high-quality special wheat accounted for 38% of China's total acreage sown to wheat, 7 percentage points higher than the previous year. Principal crops were further concentrated in the areas with the most suitable conditions. The livestock and fishery industries continued to develop, and the output of dairy products increased by 25%. Smooth progress was made in major agricultural, forestry and water control projects. Manufacturing industries with a high technological content led industrial growth. The production of electronic and information products grew by 34%. Treasury bonds continued to play a major role in promoting structural adjustments. A number of projects of great importance for long-term economic and social development were completed and put into operation, and they performed well. Water was successfully stored in the Three Gorges Reservoir; permanent locks on the Three Gorges Project were opened to navigation; and the project's first set of generators began producing power. Construction was started on the eastern and central routes of the South-to-North Water Diversion Project. An additional 46,000 kilometers of highways and 1,164 kilometers of newly completed railway lines were opened to traffic. The power industry developed more quickly. The country produced 1.9 trillion KWH of electricity in 2003, 15.5% more than in 2002. The generating capacity of newly started projects and projects put into operation during the year each totaled more than 30 million KW. Tertiary industry continued to develop, and some new service industries expanded rapidly. The number of telephone subscribers reached 532 million, a year-on-year increase of 112 million.

Economic growth was driven to a greater degree by internal momentum. The total amount of funds invested by enterprises from their own resources for technological upgrading increased by 30.2%.The non-state sector of the economy invested actively. Investment from collective and individually-owned businesses grew by 22.9%, 6.1 percentage points greater than the previous year. Exports from collective and private businesses rose by 83.1%, contributing significantly to the rapid growth of China's exports.

3. New strides were made in developing the western region, and implementation of the strategy for reinvigorating northeast China and other old industrial bases began. Ecological conservation and environmental protection work in the western region was further intensified. Some 3.37 million hectares of farmland were returned to forests; 3.77 million hectares of barren hills and wasteland were afforested; and 6.66 million hectares of seriously degraded grassland were improved. Greater efforts were put into infrastructure development. An additional 317 kilometers of track was laid on the Qinghai-Tibet railway line. The eastern section of the West-to-East Natural Gas Piping Project was completed, allowing natural gas to be delivered to east China. An additional power transmission capacity of over 8 million KW was installed as part of the West-to-East Electricity Transmission Project. Another 4,200 kilometers of highways connecting county seats were built or upgraded. An adequate supply of potable water was ensured for 8.6 million more rural people. More than 300,000 rural households had access to methane. Implementation of the strategy for reinvigorating northeast China and other old industrial bases began. The eastern and central regions accelerated their development, and new areas of economic growth kept emerging.

4. There was all-round development in science, technology, education and all other social undertakings as well as continued progress in ecological conservation and environmental protection. Basic and hi-tech research was intensified. Continued progress was made in the state innovation system. The first successful manned space flight by Shenzhou-V was another milestone in China's hi-tech development. Education continued to develop. Fresh progress was achieved in compulsory education. Regular institutions of higher learning across the country enrolled 3.822 million students, 617,000 more than the previous year. Efforts to develop public health facilities were intensified, and about 6 billion yuan from the sale of treasury bonds was allocated to develop an anti-SARS infrastructure, disease prevention and control networks at the provincial, prefectural and county levels, and a public health emergency response system. The rate of natural population growth was 6.01. Implementation of key cultural projects proceeded smoothly. Radio, film, TV, the press, publishing, sports and other undertakings continued to develop.

Ecological conservation and environmental protection were intensified, and economical and multipurpose utilization of natural resources was promoted. Some 2.05 million hectares of forests were developed to improve ecological conditions or serve as shelterbelts. Banning or temporarily suspending animal grazing allowed for 8.6 million hectares of grassland to be effectively protected and rationally utilized. Pollution control and treatment were accelerated in key river valleys and regions, including the drainage basins of the Huaihe, Haihe and Liaohe rivers, Taihu, Chaohu and Dianchi lakes, and the Three Gorges Reservoir. The percentage of urban sewage receiving centralized treatment, the percentage of urban household garbage safely disposed of, and the multipurpose utilization of industrial solid waste all increased moderately.

5. The various reforms pressed ahead in an orderly manner, and China continued opening wider to the outside world. Institutional restructuring of the State Council was completed smoothly, and steady progress was made in institutional restructuring of provincial-level governments. The experimental reform of rural taxes and administrative charges was carried out throughout the country. Important steps were taken in the reform of the state-owned assets management system and state-owned enterprises. Reform of the electric power, telecommunications and civil aviation industries was continued. The export tax rebate mechanism was improved. The reform of state-owned commercial banks was accelerated. The Chinese People's Insurance Company and the China Life Insurance Company completed their reorganization and transformation into stock companies and were successfully listed on overseas stock exchanges. Smooth progress was made in the trial reform of rural credit cooperatives in eight provinces and municipalities directly under the central government. Trials for restructuring the cultural system were started in selected regions. Major and important cases were investigated and prosecuted in the course of rectifying and standardizing the order of the market economy, resulting in gradual improvement of the market environment.

Foreign trade grew rapidly. Imports and exports totaled $851.2 billion, a year-on-year increase of 37.1%. The scope of foreign investment continued to expand, and the quality of foreign investment utilization constantly improved. A total of $53.5 billion in foreign direct investment was actually utilized. Fresh progress was made in implementing the strategy of "going global," and overseas investment was further expanded and diversified.

6. More jobs were created, and people's lives continued to improve. A total of 8.59 million more urban residents found jobs, and 4.4 million laid-off workers were reemployed in 2003; both figures exceeded the targets set for the year. The registered unemployment rate was 4.3% in cities and towns at the end of 2003.The urban population had a per capita disposable income of 8,472 yuan, an increase of 9% in real terms, and the rural population had a per capita net income of 2,622 yuan, an increase of 4.3% in real terms. Living allowances for laid-off workers and old-age pensions for retirees were basically paid on time and in full. Social security coverage further increased, as more people became covered by old-age, medical, unemployment or workman's compensation insurance. Some 22.35 million urban residents received subsistence allowances, 1.7 million more than in 2002. The government allocated special funds to help people in disaster-afflicted areas restore production and improve their living conditions. Programs to give people work in place of relief subsidies continued to expand. Better roads and supplies of electricity and potable water in poverty-stricken areas improved working and living conditions there. Steady progress was made in pilot programs to move impoverished people out of areas afflicted by extremely poor ecological conditions.

Because of the complicated and volatile international situation, the unexpected SARS outbreak and the numerous natural disasters, these achievements in China's economic and social development were made only with great difficulty. They are attributable to the correct leadership of the CPC Central Committee with Comrade Hu Jintao as General Secretary, which maintained control of the overall situation and remained calm and resolute in making decisions. Credit also goes to local authorities and government departments, which consciously followed the important thought of Three Represents, unified the broad masses of cadres and people and worked hard in a down-to-earth manner. These achievements are also due to the National People's Congress strengthening its oversight and guidance and the CPPCC taking an active part in the deliberation and administration of state affairs.

While affirming our achievements, we are clearly aware that there are still many difficulties and problems in China's economic and social development that we cannot afford to ignore. Some longstanding, deep-rooted problems have yet to be solved, and there are still structural barriers holding back economic and social development. Moreover, there are new circumstances and problems affecting the operation of the economy. First, farmers have difficulty increasing their incomes and grain production has dropped considerably. The 2003 increase in per capita net income for the rural population was 0.5 percentage points lower than in 2002. The problem of indiscriminate expropriation of arable land is serious. Grain output for 2003 decreased by 26.4 billion kilograms year-on-year. Second, the problem of unemployment remains serious. We still have about 14 million laid-off workers and unemployed people in cities and towns. Approximately 10 million new urban residents are expected to enter the labor force this year. In addition, large numbers of surplus rural laborers still need to shift to non-agricultural industries and urban areas. Third, there is an excessively wide income gap among some members of society, and in both urban and rural areas many low-income people lead a fairly difficult life. Fourth, the economic structure is still irrational, and too much of our economic grow this based on extensive production. The problems of haphazard investment and low-level, redundant expansion are worsening in some industries and localities, resulting in excess energy consumption, serious waste of resources and environmental pollution. Considerable disparity remains between supply and demand in coal, electricity, oil and transport capacity, and the shortages of resources are increasingly affecting development. Fifth, economic and social development remains imbalanced. The public health service system is far from sound. The situation that rural education remains weak as a whole requires fundamental changes. Sixth, the order of the market economy remains somewhat chaotic. We urgently need to improve the social credit system. Major industrial accidents occur frequently. We need to take a long-term perspective rooted in the present and solve these problems through reform and development.