V. Economic Restructuring and Economic Development Strategy
The period from the present to the first decade of the next century will be crucial for China to realize its strategic objective of the second step before marching toward that of the third step. We must promote the fundamental shift of the economic system and of the mode of economic growth, fulfill the Ninth Five-Year Plan and attain the Long-Range Objectives Through the Year 2010 so as to lay a solid foundation for achieving basic modernization by the middle of the next century. During this period, we must solve two major problems, that is, how to establish a more or less ideal socialist market economy and how to maintain sustained, rapid and sound development of the national economy. Keeping to the orientation of building a socialist market economy, we must strive for new breakthroughs in some major aspects of our reform and make substantial progress in optimizing the economic structure, developing science and technology and raising the level of opening up, so as really to find a way to coordinated development of the economy featuring a fairly high speed, fairly good performance and constant improvement of the quality of the economy as a whole.
(1) Readjust and improve the ownership structure.
It is China's basic economic system for the primary stage of socialism to retain a dominant position for public ownership and to develop diverse forms of ownership side by side. The establishment of such a system is determined by the socialist nature and the reality of China in the primary stage of socialism: First, being a socialist country, China must keep to public ownership as the foundation of its socialist economic system; second, being in the primary stage of socialism, China needs to develop diverse forms of ownership with public ownership in the dominant position; and third, any form of ownership that meets the criterion of the "three favorables" can and should be utilized to serve socialism.
Since the Third Plenary Session of the 1lth Party Central Committee, our Party has earnestly reviewed its past experience and lessons with regard to the ownership issue, formulated the principle of keeping public ownership in a dominant position and developing diversified economic sectors side by side, gradually removing the letters of the irrational ownership structure on the productive forces and bringing about a situation featuring diversified forms of public ownership with all sectors of the economy developing side by side. It remains a major task in the economic restructuring to continue readjusting and improving the ownership structure so as to further release and develop the productive forces.
We should see the full meaning of the public sector of the economy. The public sector includes not only the state- and collectively-owned sectors, but also the state-and collectively-owned elements in the sector of mixed ownership. The dominant position of public ownership should manifest itself mainly as follows: Public assets dominate in the total assets in society and the state-owned sector controls the life-blood of the national economy and plays a leading role in economic development. This is the case for the country as a whole. There may be differences in some localities and industries. Dominance of the public assets should feature in quantitative terms, but more so in terms of improved quality. The leading role of the state-owned sector should manifest itself mainly in its control power. We should make a strategic readjustment of the pattern of the state-owned sector of the economy. The state-owned sector must be in a dominant position in major industries and key areas that concern the life-blood of the national economy. But in other areas, efforts should be made to rearrange assets and readjust the structure so as to strengthen the focal points and improve the quality of the state assets as a whole. On the premise that we keep public ownership in the dominant position, that the state controls the life-blood of the national economy and that the state-owned sector has stronger control power and is more competitive, even if the state-owned sector accounts for a smaller proportion of the economy, this will not affect the socialist nature of our country.
The collectively-owned sector is an important component of the public sector of the economy. The collective economy is able to reflect the principle of common prosperity, extensively absorb funds that are scattered in society, ease employment pressure and help increase public accumulation and state tax receipts. We should support, encourage and help all forms of collective economy in their development in the urban and rural areas, which will be of great significance to the public sector of the economy in playing its dominant role.
Public ownership can and should take diversified forms. All management methods and organizational forms that mirror the laws governing socialized production may be utilized boldly. We should strive to seek various forms for materializing public ownership that can greatly promote the growth of the productive forces. The joint stock system is a form of capital organization of modern enterprises, which is favorable for separating ownership from management and raising the efficiency of the operation of enterprises and capital. It can be used both under capitalism and under socialism. We cannot say in general terms that the joint stock system is public or private, for the key lies in who holds the controlling share. If the state or a collective holds the controlling share, it obviously shows the characteristics of public ownership, which is favorable to expanding the area of control by public capital and enhancing the dominant role of public ownership. Now there have appeared a large number of diverse forms of joint stock partnerships in the urban and rural areas. They are new things arising in the process of reform. We should support them, give them guidance, constantly sum up their experience and improve them. What should be specially advocated and encouraged is the kind of collective economy that features, in the main, the association of laborers in labor and capital.
The non-public sector is an important component part of China's socialist market economy. We should continue to encourage and guide the non-public sector comprising self-employed and private businesses to facilitate its sound development. This is of great importance to satisfy the diverse needs of the people and promoting the development of the national economy.
It is necessary to improve the legal system concerning property and protect the legitimate rights and interests of, and fair competition among, all types of enterprises and at the same time exercise supervision and control over them according to law.