The session points out that our country has achieved new and important successes in developing the international united front against hegemonism and in developing friendly relations with countries in all parts of the world. The visits made by our state leaders this year to Korea, Romania, Yugoslavia, Kampuchea, Iran, Burma Nepal, the Philippines, Bangladesh, Japan, Thailand, Malaysia and Singapore and many other countries in Asia, Africa, Latin America and Europe, the conclusion of the China-Japan Peace and Friendship Treaty and the completion of the negotiations for the normalization of relations between China and the United States are important contributions to peace in Asia and the world as a whole. But the grave danger of war still exists. We must strengthen our national defence, and be prepared to repulse at any moment aggressors from any direction. The plenary session holds that the normalization of relations between China and the United States further places before us the prospect of the return of our sacred territory Taiwan to the embrace of our motherland and the accomplishment of the great cause of reunification. The plenary session expresses welcome to Taiwan compatriots, compatriots in Hongkong and Macao and overseas Chinese, as patriots belonging to one family, to continue making joint and positive contributions to the reunification and construction of their motherland.

Chairman Hua Kuo-feng and Vice-Chairmen Yeh Chien-ying, Teng Hsiao-ping, Li Hsien-nien, Chen Yun and Wang Tung-hsing at the third plenary session.

The session unanimously adopts the communique.

In the early years after the founding of the People's Republic, especially after the socialist transformation was in the main completed, Comrade Mao Tsetung instructed the whole Party time and again to shift the focus of our work to the field of the economy and technical revolution. Under the leadership of Comrade Mao Tsetung and Comrade Chou En-lai, our Party did a great deal for socialist modernization and scored important achievements. But the work was later interrupted and sabotaged by Lin Piao and the "gang of four." Besides, we had some shortcomings and mistakes in our leading work because we lacked experience in socialist construction, and this also hampered the transition in the focus of our Party's work. Since the nationwide mass movement to expose and criticize Lin Piao and the "gang of four" has fundamentally come to a successful conclusion, though in a small number of places and departments the movement is less developed, still needs some time to catch up and so cannot end simultaneously, on the whole there is every condition needed for that transition. Therefore the plenary session unanimously endorsed the policy decision put forward by Comrade Hua Kuo-feng on behalf of the Political Bureau of the Central Committee that, to meet the developments at home and abroad, now is an appropriate time to take the decision to close the large-scale nationwide mass movement to expose and criticize Lin Piao and the "gang of four" and to shift the emphasis of our Party's work and the attention of the people of the whole country to socialist modernization. This is of major significance for fulfilment of the three-year and eight-year programmes for the development of the national economy and the outline for 23 years, for the modernization of agriculture, industry, national defence and science and technology and for the consolidation of the dictatorship of the proletariat in our country. The general task put forward by our Party for the new period reflects the demands of history and the people's aspirations and represents their fundamental interests. Whether or not we can carry this general task to completion, speed socialist modernization and on the basis of a rapid growth in production improve the people's living standards significantly and strengthen national defence - this is a major issue which is of paramount concern to all our people and of great significance to the cause of world peace and progress. Carrying out the four modernizations requires great growth in the productive forces, which in turn requires diverse changes in those aspects of the relations of production and the superstructure not in harmony with the growth of the productive forces, and requires changes in all methods of management, actions and thinking which stand in the way of such growth. Socialist modernization is therefore a profound and extensive revolution. There is still in our country today a small handful of counter-revolutionary elements and criminals who hate our socialist modernization and try to undermine it. We must not relax our class struggle against them, nor can we weaken the dictatorship of the proletariat. But as Comrade Mao Tsetung pointed out, the large-scale turbulent class struggles of a mass character have in the main come to an end. Class struggle in socialist society should be carried out on the principle of strictly differentiating the two different types of contradictions and correctly handling them in accordance with the procedures prescribed by the Constitution and the law. It is impermissible to confuse the two different types of contradictions and damage the political stability and unity required for socialist modernization. The plenary session calls on the whole Party, the whole army and the people of all our nationalities to work with one heart and one mind, enhance political stability and unity, mobilize themselves immediately to go all out, pool their wisdom and efforts and carry out the new Long March to make China a modern, powerful socialist country before the end of this century.

Comrade Chen Yun.

Comrade Teng Ying-chao.

Comrade Hu Yao-pang.

Comrade Wang Chen.

(2)

In preparing for the great task of socialist modernization, the session reviewed the experience and lessons of economic construction since the founding of the People's Republic. The session holds that the fundamental policy put forth in the report On the Ten Major Relationships which Comrade Mao Tsetung made in 1956, summing up China's experience in economic construction, is an objective reflection of economic law and also an important guarantee for the political stability of society. This report still is significant for guidance today. It has been shown in practice that whenever we maintain the society's necessary political stability and work according to objective economic law, our national economy advances steadily and at a high speed; otherwise, our national economy develops slowly or even stagnates and falls back. While we have achieved political stability and unity and are restoring and adhering to the economic policies that proved effective over a long time, we are now, in the light of the new historical conditions and practical experience, adopting a number of major new economic measures, conscientiously transforming the system and methods of economic management, actively expanding economic co-operation on terms of equality and mutual benefit with other countries on the basis of self-reliance, striving to adopt the world's advanced technologies and equipment and greatly strengthening scientific and educational work to meet the needs of modernization. Therefore, there can be no doubt that our country's economic construction is bound to advance rapidly and steadily once again.

The plenary session discussed arrangements for the national economic plans for 1979 and 1980 and approved them in principle, and proposed that the State Council submit them after revisions to the Second Session of the National People's Congress to be held next year for discussion and adoption. The session feels that these arrangements are both forward-looking and feasible. The session points out that the restoration and development of our national economy since the downfall of the "gang of four" has been very rapid, and that there have been marked increases in total industrial and agricultural output value and revenue in 1978. But it has to be noted that due to sabotage by Lin Piao and the "gang of four" over a long period there are still quite a few problems in the national economy, some major imbalances have not been completely changed and some disorder in production, construction, circulation and distribution has not been fully eliminated. A series of problems left hanging for years as regards the people's livelihood in town and country must be appropriately solved. We must conscientiously solve these problems step by step in the next few years and effectively achieve a comprehensive balance, so as to lay a solid foundation for rapid development. We must make concentrated efforts within the limits of our capabilities to carry out capital construction actively and steadily and not rush things, wasting manpower and material.

The session points out that one of the serious shortcomings in the structure of economic management in our country is the over-concentration of authority, and it is necessary boldly to shift it under guidance from the leadership to lower levels so that the local authorities and industrial and agricultural enterprises will have greater power of decision in management under the guidance of unified state planning; big efforts should be made to simplify bodies at various levels charged with economic administration and transfer most of their functions to such enterprises as specialized companies or complexes; it is necessary to act firmly in line with economic law, attach importance to the role of the law of value, consciously combine ideological and political work with economic methods and give full play to the enthusiasm of cadres and workers for production; it is necessary, under the centralized leadership of the Party, to tackle conscientiously the failure to make a distinction between the Party, the government and the enterprise and to put a stop to the substitution of Party for government and the substitution of government for enterprise administration, to institute a division of responsibilities among different levels, types of work and individuals, increase the authority and responsibility of administrative bodies and managerial personnel, reduce the number of meetings and amount of paper work to raise work efficiency, and conscientiously adopt the practices of examination, reward and punishment, promotion and demotion. These measures will bring into full play the initiative, enthusiasm and creativeness of four levels, the central departments, the local authorities, the enterprises and the workers, and invigorate all branches and links of the socialist economy.

The session discussed in detail questions in agriculture, and agreed to distribute to the provinces, municipalities and autonomous regions for discussion and trial use the Decisions of the Central Committee of the Communist Party of China on Some Questions Concerning the Acceleration of Agricultural Development (Draft) and the Regulations on the Work in the Rural People's Communes (Draft for Trial Use).

The plenary session holds that the whole Party should concentrate its main energy and efforts on advancing agriculture as fast as possible because agriculture, the foundation of the national economy, has been seriously damaged in recent years and remains very weak on the whole. The rapid development of the national economy as a whole and the steady improvement in the living standards of the people of the whole country depends on the vigorous restoration and speeding up of farm production, on resolutely and fully implementing the policy of simultaneous development of farming, forestry, animal husbandry, side-occupations and fisheries, the policy of taking grain as the key link and ensuring an all-round development, the policy of adaptation to local conditions and appropriate concentration of certain crops in certain areas, and gradual modernization of farm work. This requires first of all releasing the socialist enthusiasm of our country's several hundred million peasants, paying full attention to their material well-being economically and giving effective protection to their democratic rights politically. Taking this as the guideline, the plenary session set forth a series of policies and economic measures aimed at raising present agricultural production. The most important are as follows: The right of ownership by the people's communes, production brigades and production teams and their power of decision must be protected effectively by the laws of the state; it is not permitted to commandeer the manpower, funds, products and material of any production team; the economic organizations at various levels of the people's commune must conscientiously implement the socialist principle of "to each according to his work," work out payment in accordance with the amount and quality of work done, and overcome equalitarianism; small plots of land for private use by commune members, their domestic side-occupations, and village fairs are necessary adjuncts of the socialist economy, and must not be interfered with; the people's communes must resolutely implement the system of three levels of ownership with the production team as the basic accounting unit, and this should remain unchanged. Organizations at various levels of the people's commune must firmly carry out democratic management and election of cadres and make public their accounts. The session holds that, for a fairly long period to come, the national figures for the agricultural tax and the state purchase of grain will continue to be based on the five-year quotas 1971-75 and that grain purchase must never be excessive. To reduce the disparity in prices between industrial and agricultural products, the plenery session suggests that the State Council make a decision to raise the grain purchase price by 20 per cent, starting in 1979 when the summer grain is marketed, and the price for the amount purchased above the quota by an additional 50 per cent, and also raise the purchase price for cotton, oil-bearing and sugar crops, animal by-products, aquatic and forestry products and other farm and side-line products step by step, depending on the concrete conditions. The factory price and the market price of farm machinery, chemical fertilizer, insecticides, plastics and other manufactured goods for farm use will be cut by 10 to 15 per cent in 1979 and 1980 on the basis of reduced cost of production, and these benefits will in general be passed on to the peasants. After the purchase price of farm produce is raised, the urban workers must be guaranteed against a fall in their living standards. The market price of all food grain will remain unchanged, and the selling price of other farm products needed for daily life must also be kept stable; if some prices have to be raised, appropriate subsidies will be given to the consumers. The plenary session also discussed the strengthening of education in agricultural science, the drafting of regional programmes for developing agriculture, forestry and animal husbandry, the establishment of modern farming, forestry, livestock-breeding and fishing centres, the active expansion of rural industry and side-occupations run by people's communes and production brigades and other important questions, and decided upon relevant measures.

The plenary session points out that it is imperative to improve the livelihood of the people in town and country step by step on the basis of the growth of production. The bureaucratic attitude of paying no attention at all to urgent problems in the people's livelihood must be resolutely opposed. On the other hand, since our economy is still very backward at present, it is impossible to improve the peoples livelihood very rapidly and it is essential to keep the people informed on the relevant state of affairs and to intensify education in the revolutionary ideas of self-reliance and hard struggle among the youth and other sectors of the people, and leading comrades at all levels must make themselves exemplars in this regard.