II. Work of the Past Five Years

The five years since Deng Xiaoping gave talks during his visit to the south and the Party held its 14th National Congress in 1992 have been no ordinary years. In the five years, our Party led the people of all nationalities in our country in standing up to the severe tests of political disturbances at home and abroad in the late 1980s and early 1990s and continuing to make big strides on the road to socialism with Chinese characteristics. In the five years, we have further emancipated our minds and made pioneering efforts, bringing the reform, opening up and the modernization drive to a new stage of development. In the five years, we have, in the course of profound changes in establishing a socialist market economy, properly handle the relations between reform, development and stability and scored great achievements in various fields. In the five years, China's international standing has risen notably in the midst of radical changes in the pattern of the world.

The 14th Party Congress made three policy-decisions of far-reaching significance: One, seize opportunities to speed up development; two, define the establishment of a socialist market economy as the goal of economic restructuring in China; and three, establish the guiding position of Deng Xiaoping's theory of building socialism with Chinese characteristics in the whole Party. Acting in the spirit of the 14th Party Congress, the Central Committee convened seven plenary sessions to adopt programs and plans regarding a series of major issues which have a vital bearing on the overall situation, such as the establishment of a socialist market economy, the strengthening of Party building, the formulation of the Outline of the Ninth Five-Year Plan for National Economic and Social Development and the Long-Range Objectives Through the Year 2010, and the development of socialist culture and ethics. Over the past five years, the work of the whole Party has been highlighted in the all-round implementation of the Party's basic theory and basic line, the conscientious enforcement of the important policy-decisions of the 14th Party Congress, the formulation of and adherence to the basic principle of "seizing current opportunities to deepen the reform and open China wider to the outside world, promote development and maintain stability," and the fostering of both material progress and cultural and ethical progress. Major advancements have been made in developing our productive forces, increasing the overall national strength and improving the people's living standards.

Marked successes were attained in economic development over the past five years. From 1992 through 1996, the gross domestic product rose by 12.1 percent a year on the average. Rapid economic growth was registered while inflation was brought under effective control, and thus drastic fluctuations were avoided. Notable headway was made in economic restructuring. Greater attention was paid to agriculture and the output of grain and other farm produce increased steadily. Infrastructure including water conservancy, transport and telecommunications and basic industries such as iron and steel and energy sectors expanded swiftly. Rapid economic growth was witnessed in the eastern part of the country and the pace of economic development was speeded up in the central and western parts as well. The Eighth Five-Year Plan was crowned with success, and a good beginning has been recorded in the implementation of the Ninth Five-Year Plan.

New breakthroughs have been made in the reform and opening to the outside world. In accordance with the requirements for establishing a socialist market economy, we made big strides in reforming the systems of finance, taxation, banking, foreign trade, foreign exchange, planning, investment, pricing, circulation, housing and social security. Market forces notably served as the basic means of regulating the allocation of resources, and the framework of a macroeconomic control system was preliminarily established. We pressed forward with the reform of state-owned enterprises after making experiments in selected ones. We further developed the pattern of the public sector remaining dominant and diverse sectors of the economy developing side by side. We continued to expand economic and technological cooperation and exchanges with other countries, scored big increases in foreign trade and in the use of foreign funds and brought about a marked rise in state foreign exchange reserves.

We took new steps in promoting cultural and ethical progress. Gratifying achievements were scored in science, technology, education, culture, public health, sports, family planning and other social undertakings. We further improved publicity work and guidance for public opinion and promoted ideological and ethical progress. Significant progress was made in developing socialist democracy and improving the legal system. A series of laws and statutes commensurate with the development of a socialist market economy were enacted, and law enforcement and the judiciary work were strengthened. The patriotic united front expanded, and the great unity of all our nationalities was further consolidated and developed. Social and political unity and stability provided an important guarantee for the reform and development.

Progress was made in modernizing national defense. The combat effectiveness of the army was further enhanced. The people's army made major contributions to defending the national security, safeguarding the unification of the motherland, taking part in national economic development and fulfilling such tasks as dealing with emergencies and disasters and providing relief.

The living standards of the people rose notably. The average annual per-capita income for living expenses increased by 7.2 percent for city dwellers in real terms, while the average annual per-capita net income went up by 5.7 percent for rural residents in real terms, making the period one of those with the biggest increases. The market had an adequate supply of commodities, and the people's living conditions including food, clothing, housing, articles for daily use and transportation improved markedly. Savings deposits of urban and rural residents rose considerably. The rural poor population of the country decreased by 32 million.

In the past five years, we have done a great deal of work with marked results for the peaceful reunification of the motherland. The Chinese government has resumed the exercise of sovereignty over Hong Kong, which is a consolation to numerous revolutionary martyrs and veterans as it has wiped out a century-old humiliation of the Chinese nation. This is a great event which makes every Chinese elated and has won universal acclaim from the international community.

We unswervingly implemented the independent foreign policy of peace and continued to improve the external environment for China's reform, opening up and modernization drive. China's influence on international affairs kept growing.

We stepped up our efforts to strengthen Party building. The whole Party studied Deng Xiaoping's theory of building socialism with Chinese characteristics more deeply. Progress was made in strengthening leading bodies and the contingent of cadres, with a large number of fine young cadres taking leading posts. We redoubled our efforts to improve the Party's work style, build a clean government and fight corruption and achieved successes by stages. The building of primary organizations was strengthened, and Party members played a vanguard and exemplary role. Progress was made in institutionalizing and standardizing inner-Party activities.

However, we are soberly aware that there are still quite a few difficulties on the road ahead, and that there are also shortcomings and defects in our work. The following are the main ones: The quality and efficiency of the national economy as a whole remain fairly low, the irrational economic structure still poses a rather outstanding problem, and especially part of the state-owned enterprises lack vitality. The work style of the Party and the government, the current social conduct and public security still fall short of the expectations of the people; corruption, extravagance and waste and other undesirable phenomena are still spreading and growing; and bureaucratic style of work, formalism and deception constitute serious problems. The relationship between income and distribution has yet to be straightened out, uneven regional development is obvious, and some urban and rural residents still live in difficult circulnstances. Population growth and economic development have caused great strains on resources and the environment. We must pay great attention to these problems and solve them in a down-to-earth way.

Reviewing the work of the past five years, we can say that on the whole the reform and development have proceeded satisfactorily during this period. Our Party realized the replacement of veteran cadres with younger ones in its collective leadership, maintained the consistency of the line, principles and policies and social and political stability throughout the country, properly settled a series of major issues at home and in our foreign relations, and consolidated and developed the excellent situation prevailing since the Third Plenary Session of the llth Party Central Committee. This has gratified the people throughout the country and won praises from the world opinion. Practice during the five years shows that the policy-decisions made at the 14th Congress are correct and that our Party is capable of handling complex domestic and international situations. The achievements scored in the five years are the outcome of the united endeavor of the whole Party and the people throughout the country. They have provided valuable new experiences and will serve as a more solid foundation for our future development. All this will greatly encourage us to win new victories with greater confidence and enthusiasm.