BIZCHINA / Official Speeches

NDRC minister on 11th Five-Year Plan
(NDRC.gov.cn )
Updated: 2006-03-13 09:04

First, we will promote development by relying on the expansion of domestic demand, take the expansion of domestic demand, especially consumption, as a major driving force, and transform economic growth from being driven by investment and export to being driven by consumption, investment, domestic and foreign demand combined in a balanced manner. This transformation is targeted at solving the problem that China's economic growth has relied on investment and export excessively and domestic consumption does not play its due role. During the 10th Five-Year Plan period, the domestic capital formation rate increased from 36% to 44.8%, while the consumption rate decreased from 61.5% to 50.7%, and foreign trade dependency rose from 39.6% to 63.9%. If such kind of growth continues, though successful in short-term fast expansion, it will lead to a more extensive growth mode and instability of the economy. In the 11th Five-Year Plan period, we will adjust the relationship between investment and consumption, rationally control total investment, and strengthen the driving force of consumption in economic growth. We will adjust residents' income distribution, raise the income of urban and rural residents, and enhance the consumption capacity of residents, particularly rural residents and low-income population in urban areas. We will speed up the transformation of foreign trade growth mode, and promote the switch of the dominant feature of foreign trade from volume expansion to quality improvement.

Second, we will promote development by relying on optimizing industrial structure, take the adjustment of economic structure as the theme, transform economic growth from being driven by industry and quantitative expansion to being driven by the balanced development of the primary, secondary and tertiary industries and by structural optimization and upgrading. This is a solution targeting at the irrational industrial structure of China. At present China has a weak agriculture foundation, and problems such as difficulties for farmers to increasing income and underdevelopment of rural regions remain prominent. The secondary industry is large in scale but not strong, and its ratio has kept rising and currently stands at 47.3%. The service industry lags behind, with its ratio dipping from 41.7% in 2002 to current 40.3%. Such an economic mix has not only increased the pressure on resources and environment, but also affected the improvement of total economic quality and benefits. It has also impeded the easing of employment pressure and impaired the stability of the economy. During the 11th Five Year Plan period, it is imperative for us to give top priority to the issues of "agriculture, rural areas and farmers" among all strategic tasks, adhere to the balanced rural and urban development and balanced economic and social development, and make steady progress in building the socialist new countryside while promoting urbanization vigorously and prudently. According to the requirements of the new industrialization path, we regard the enhancement of independent innovation capability as the central link and will promote market-oriented and enterprise-led innovation. We will continue to give scope to the competitive edge of labor-intensive industries, readjust and upgrade the product mix, enterprises' organizational structure and industrial distribution so as to build up our industry. Priority will also be given to stepping up the development of the service industry. By following the principles of market orientation, industrialization and socialization, we will widen the scope, expand the scale, upgrade the structure, strengthen the function and standardize the market of the service industry so as to improve the proportion and level of the service industry.

Third, we will promote development by relying on resource conservation and environmental protection and focus on the fundamental change of the economic growth mode, transforming economic growth from being driven by large amount of resources consumption to being driven by the improvement of resources utilization efficiency. This transformation is targeted at solving China's problems, including resources shortage, fragile ecology and environment and increasingly prominent contradiction between economic growth and resources and environment constraints. Rapid economic growth was achieved during the 10th Five-Year Plan period, yet it was achieved at the expense of resources and environment. It is imperative to make timely change to this growth mode because we can hardly achieve sustainable development by heavily relying on resources consumption. During the 11th Five-Year Plan period, we will implement the basic national policy of resources conservation and environment protection, develop cycling economy vigorously, protect and restore ecosystem and environment, strengthen environmental protection, improve resources management, promote the balanced development of population, resources and environment to realize sustainable development, build a cycling and sustainable national economic system featuring low input, high output, low consumption and emission and a resources-conserving and environment-friendly society.

Fourth, we will promote development by relying on enhancing independent innovation capability, take it as a national strategy and shift economic growth from relying on the input of capital and substance factor to relying on science and technology advancement and human resources. This is a solution put forward to address the bottlenecks of science and technology and human resources China encounters in economic and social development. China's economic growth largely relies on substance input and its competitive edge is to a great extent based on cheap labor, cheap water and land resources and expensive environment pollution. Such a competitive edge will be weakened along with the rising price of raw materials and the enhancement of environmental protection. Therefore, we should enhance independent innovation capability vigorously and increase the contribution of science and technology advancement to economic growth notably. In the 11th Five-Year Plan period, we will implement the strategy of rejuvenating our nation through science and education and take science and technology advancement and innovation as a major driving force of economic and social development. We will give more strategic importance to developing education and fostering high-quality talented people who are endowed with capability and integrity, deepen system reforms, increase input, accelerate the development of science, technology and education, and make great efforts to build an innovation-oriented nation and a strong nation with abundant human resources.


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