(3) Improve the structure and mode of distribution.

We shall keep to the system in which distribution according to work is primary and in which a variety of modes of distribution coexist. By combining remuneration according to work and remuneration according to factors of production put in, and by giving priority to efficiency with due consideration to equity, such a system is conducive to optimizing the allocation of resources, promoting economic development and maintaining social stability. We shall protect lawful incomes according to law, allowing and encouraging some of the people to get wealthy first through honest labor and lawful operations, and allowing and encouraging the use of capital, technology and other factors of production to participate in the distribution of gains. Illegal earnings shall be banned and those who appropriate public property or seek gains by such illegal means as tax evasion or by striking deals between power and money shall be resolutely punished according to law. We shall take stock of irrational incomes and must correct the malpractice of individuals obtaining extra incomes by taking advantage of sectoral monopolies and some special privileges. We shall regulate the excessively high incomes, improve the individual income tax system, introduce such new taxes as inheritance tax, and standardize income distribution so as to make income gaps more reasonable and prevent polarization.

To concentrate financial strength on improving the state finance is an essential requirement for ensuring the development of all economic and social undertakings. It is necessary to correctly handle the relations of distribution among the state, enterprises and individuals and between the central and local authorities so as to gradually raise the proportion of fiscal revenue in the gross national product and the proportion of the central government revenue in the national revenue and, at the same time, adjust the revenue and expenditure structure to adapt to the changed ownership structure and the changed government functions and establish secure and balanced state finances.

(4) Give full play to the role of the market mechanism and improve the macroeconomic control system.

We should accelerate the process of building a complete market system in the national economy We shall continue to develop all kinds of markets, with emphasis on markets for capital, labor, technology and other production factors and the mechanism for pricing these factors. We shall reform the circulation system, improve market rules, strengthen market management, remove obstacles to market development, break through regional blockades and sectoral monopolies so as to build as soon as possible a unified and open market system with orderly competition and make better use of the basic role of the market in the allocation of resources.

The main task of macroeconomic control is to keep a balance between total demand and total supply, curtail inflation, promote the optimization of the major economic structures and achieve stable economic growth. In macroeconomic control, we should mainly employ both economic and legal means. We shall deepen the reforms of the banking, fiscal and planning systems so as to improve the means of macroeconomic control and the coordinating mechanism. We shall carry out appropriately tight financial and monetary policies, keeping an eye on the degree of the control. We shall, in accordance with the law, strengthen the supervision and control of the financial institutions and markets, including the securities market, standardize and safeguard the financial order, and effectively guard against financial risks.

(5) Strengthen agriculture as the foundation of the economy, and readjust and optimize the economic structure.

In line with our economic development and taking into full account the trend of accelerated development of science and technology in the world and the speedy regrouping of the international economic structures, we should make strategic readjustments in the economic structure aimed at improving the quality and performance of the entire national economy in an all-round way and at boosting the overall national strength and international competitiveness. This is a pressing requirement of the national economic development and a long-term task. The general principles are as follows: with the market as the orientation, to make production respond to the changing demands of the domestic and foreign markets; to optimize the industrial structure by relying on scientific and technological progress; to bring about coordinated development of regional economies by giving scope to the advantages in their respective localities; and to change the mode of economic growth, putting an end to the situation featuring high input, low output, high consumption and low efficiency.

We should continue to give priority to agriculture in all our economic work. We shall keep the Party's basic rural policies stable, deepen rural reforms and see to it that agriculture and the rural economy develop and the peasants' income increases. We shall increase agricultural input through multiple channels, improve agricultural infrastructure and constantly better production conditions. We shall step up the effort to develop agriculture by relying on science and education, aiming at high yields, fine quality and high efficiency as well as good water-saving results. We shall promote an industrial management of agriculture to get production, processing and marketing integrated and supporting each other so that agriculture will develop toward commercialization, specialization and modernization. We shall develop farming, forestry, animal husbandry, sideline production and fishery in an all-round way and continue to develop town and township enterprises so as to bring into being a rational industrial structure. We shall do well in planning and building up small towns and cities. We shall keep stable, for a long time to come, the household responsibility contract system with remuneration linked to output, improve the two-tier operation system that combines unified management with independent management and gradually boost the strength of the collective economy. We shall reform the grain and cotton purchasing and marketing system and introduce a rational pricing policy. We shall set up and improve a socialized service system for agriculture, a farm produce market system and a system of state support and protection. We must respect the decision-making power of peasants in their production and operations, protect their legitimate rights and interests and really lighten their burdens so that the broad masses of the peasants will truly benefit from the various rural policies and the work of the Party.

We should transform and upgrade traditional industries, develop rising and high-tech industries and try to informationize the national economy. We shall continue to strengthen the construction of infrastructure and basic industries, intensify the readjustment and upgrading of the processing industry, invigorate pillar industries and actively cultivate new points of economic growth. We shall combine the efforts to develop new technologies, products and industries with the efforts to open up markets and integrate the development of technology-intensive with labor-intensive industries. We shall encourage and guide the tertiary industry so that it will develop at an accelerated pace.

We should promote rational distribution and coordinated development of regional economies. Taking advantage of its favorable conditions, the eastern part of the country should strive for a still higher level of development in the course of reform and opening up, and take the lead in achieving basic modernization where conditions permit. The central and western parts should speed up the reform, opening up and development, make use of their advantages in natural resource and develop related industries. The state will increase its support for the central and western parts by giving them priority in planning infrastructure and resources development projects, instituting step by step a standard payment transfer system, and encouraging both Chinese and overseas investors to invest in the regions. It is necessary to further develop all forms of association and cooperation between the eastern and the central and western parts. We shall pay more attention and give active support to areas inhabited by ethnic minorities in their economic development. We must try all possible ways to minimize the regional development disparities step by step. Proceeding from their actual conditions, all regions should develop their economies with distinct local characteristics, speed up the upgrading of old industrial bases, let the central cities play their role, and continue to guide the formation of trans-regional economic zones and key industrial belts. We shall accelerate the reform of investment and financing systems, improve state industrial policies, and take measures to solve such problems as launching "large and all-inclusive" and "small and all-inclusive" projects and irrational and duplicated construction projects.