Speech at the Press Conference Organized by the Press Office of the State Council

In 2002, under the correct leadership of the Central Party Committee and the State Council, people of all nationalities of China held high the great banner of Deng Xiaoping Theory and implemented in full swing the important thought of “Three Represents”. United efforts were made to work hard through innovations in a pioneering spirit and to overcome difficulties in the course of development. Main targets set forth for the economic and social development were met. The quality of economic performance improved noticeably, and new progress was achieved in various undertakings, which paved the way for fulfilling the “Tenth-Five-Year” program and building a well-off society in an all round way. In 2002, the gross domestic product topped 10 trillion yuan, standing at 10,239.8 billion yuan, an increase of 8 percent over 2001 at comparable prices. Of this total, the value-added of the primary industry was 1,488.3 billion yuan, up 2.9 percent, that of the secondary industry was 5,298.2 billion yuan, up 9.9 percent, and that of the tertiary industry was 3,453.3 billion yuan, up 7.3 percent.

I. Steady growth was made in industrial and agricultural production. In light of market demand, reorientation of agricultural production was accelerated towards regional concentration, quality improvement and industrialization. Structural adjustment for crop production was continued. The planting areas for grain for the whole year were 103.99 million hectares, and that of cotton was 4.18 million hectares, down by 2.09 million hectares and 630,000 hectares respectively over last year. The planting areas for oil-bearing crops, sugar crops and vegetables were 14.87 million hectares, 1.80 million hectares and 17.28 million hectares respectively, up by 240,000, 150,000 and 880,000 hectares over last year. The total output of grain for the whole year was 457.11 million tons, up 1 percent over last year. The output of oil-bearing crops was 29.00 million tons, up 1.2 percent; that of cotton was 4.92 million tons, down by 7.5; that of sugar crops was 101.51 million tons, up 17.3 percent; that of meat was 65.90 million tons, up 4 percent; and that of aquatic products was 45.13 million tons, up 3 percent over last year. Forestry and water conservancy made new progress. The total afforested area in 2002 was 7.47 million hectares, up by 51 percent. Of this total, the afforested area through “grain for green” projects was 5.4 million hectares. A total 3,576 kilometers of main embankment along the middle and lower reaches of Yangtze River and 982 kilometers of embankment along the lower reaches of the Yellow River were reinforced and came up to anti-flood standards. Over 900,000 hectares of land were converted into farmland with effective irrigation system, another 1.40 million hectares of land were guaranteed by water-saving irrigation system. Comprehensive land recovery program was applied to over 40,000 hectares of once eroded areas.

Fast growth was registered in industrial production with new progress in structural adjustment of industrial products. In 2002, the total value-added of the industrial sector was 4,593.5 billion yuan, up by 10.2 percent over the previous year, representing the highest since 1998. Of this total, the value-added of state-owned and state-controlled industrial enterprises was 1,663.8 billion yuan, up by 11.7 percent; as for the industrial enterprise above designated size, the growth of collective enterprises was 8.6 percent; of joint-stock enterprises, up 14.4 percent; of enterprises invested by foreigners or investors from Hong Kong, Macao and Taiwan, up 13.3 percent. Fast growth was registered in the production of foreign trade products, high-tech products, and consumer products that suit the upgrading of consumption structure. The value of manufactured products shipped for export by industrial enterprises above designated size rose by 23.4 percent. The output of electronic and telecommunications products rose by over 25.9 percent, including PCs, mobile telephones, semi-conductor integrated circuits, color TV sets. The sales ratio of industrial enterprises above designated size was 98 percent, or 0.3 percentage points higher than that in the previous year. The net profits made by industrial enterprises above designated size was 562.0 billion yuan, up 20.6 percent, of which, that made by state-owned and state-controlled industrial enterprises was 263.6 billion yuan, up 15.3 percent.

II. Investment in fixed assets kept fast growth. The completed investment in fixed assets of the country in 2002 was 4.3202 trillion yuan, exceeding 4 trillion yuan for the first time, up 16.1 percent over the previous year, representing the highest growth rate since 1996. In terms of different economic entities, the investment in fixed assets by state-owned units and other type of units was 3,102.0 billion yuan, up by 17.0 percent, that of collective units was 590.1 billion yuan, up 11.8 percent, and that of urban and rural residents was 628.0 billion yuan, up 15.7 percent. In terms of uses, the growth of investment in capital construction was 16.4 percent; it rose by 11.1 percent in technical updating and transformation and 21.9 percent in real estate development. In terms of different regions, overall growth was scored in investment in eastern, central and western areas of China. Of the total investment by state-owned units and other type of units, the investment in western areas was up 20.6 percent, that in central areas, 20 percent, and 16.2 percent in eastern areas. In terms of different sectors, the investment in the primary industry was up 23.5 percent, it was 0.6 percentage points and 9.1 percentage points higher than that of the secondary and the tertiary industries. The construction of key projects progressed smoothly, including: the second phase of the Three Gorges project, Qinghai-Tibet railway, the West-East electricity transmission project, the West-to-East natural gas transmission project, and the start of the South-to-North water diversion project.

III. Steady growth was seen in consumption demand. In 2002, the total retail sales of consumer goods reached 4,091.1 billion yuan, up 8.8 percent over the previous year. Of this total, the retail sales of consumer goods in urban areas reached 2,589.8 billion yuan, up 10 percent, and the retail sales of consumer goods at and below county level stood at 1,501.3 billion yuan, up 6.8 percent. The retail sales of the wholesale and retail industry was up 9.2 percent, that of the catering industry was up 16.6 percent. Telecommunications, motor vehicles and related products had shaped new hotspots in consumption. The total retail sales of telecommunication equipment by wholesale and retail enterprises above designated size was up by 69.2 percent over the previous year; that of motor vehicles was up by 73 percent; electric and electronic appliances for household use was up by 14.6 percent. Tourism developed continuously. The year 2002 saw 877.82 million domestic tourists, up 12 percent over the previous year. A total of 16.60 million Chinese went abroad in the year 2002, up 36.8 percent over the previous year, including 10.06 million for private visits, up 44.9 percent and representing 60.6 percent of all out-going visitors.

IV. Rapid growth was registered in foreign trade. Total value of import and export in 2002 reached 620.8 billion US dollars, up 21.8 percent over the previous year. The value of export was 325.6 billion US dollars, up 22.3 percent, and the value of import was 295.2 billion US dollars, up 21.2 percent. China enjoyed a trade surplus of 30.4 billion US dollars. In 2002, the contracted foreign capitals through foreign direct investment stood at 82.8 billion US dollars, up 19.6 percent, and the foreign capitals actually utilized were 52.7 billion US dollars, up 12.5 percent. The accomplished business revenue through contracted projects and labor contracts was 14.4 billion US dollars, up 18.2 percent. By the end of 2002, the foreign exchange reserves of China reached 286.4 billion US dollars, an increase of 74.2 billion US dollars as compared with that at the end of the previous year. The exchange rate of RMB basically remained stable.

V. The general level of prices declined by a small margin.  The general level of consumer prices in China of the year was down by 0.8 percent over the previous year. Of this total, the consumer price level in urban areas was down by 1 percent, and it was down by 0.4 percent in rural areas. The price for services was up by 1.8 percent over the previous year. The retail prices of commodities were down by 1.3 percent. The producers’ prices of manufactured goods declined by 2.2 percent, and the purchasing prices for energy, raw materials and power went down by 2.3 percent. The prices for investment in fixed assets were up 0.2 percent.

VI. The living standard of urban and rural population continued to improve. The annual per capita disposable income of urban households was 7,703 yuan in 2002, a real increase of 13.4 percent over the previous year. The per capita net income of rural households was 2,476 yuan, a real growth of 4.8 percent. The Engel coefficient for urban household was 37.7 percent, down by 0.2 percentage points over the previous year. The Engel coefficient of rural households was 46.2 percent a decline of 1.5 percentage points over the previous year. Savings deposits of urban and rural residents reached 9,430.7 billion yuan, up 17.1 percent over the previous year.

At the end of 2002, the total population of China was 1,284.53 million. The net growth rate of population was 6.45 per thousand. By the end of 2002, 147.31 million people participated in basic pension programs, 101.82 million people participated in unemployment insurance programs, and 94.00 million people participated in basic medical insurance programs. A national total of 20.54 million urban residents received the minimum income relief from the government. The population in poverty in the rural areas was 1.07 million less than 2002.

VII. New progress was scored in education, science and technology, public health, sports and other social undertakings. Education of all levels and forms made further development, the 9-year compulsory education and higher education in particular. The newly enrolled undergraduates in general universities were 3.21 million, an increase of 530,000 over the previous year. Significant progress was made in R&D activities and in their industrialization. In 2002, the expenditure on R&D for the whole country was 116.1 billion yuan, up 11.3 percent over 2001. Important headways were made in the areas of IT, biotechnology and manned space technology, represented by the successful development of the CPU chip “Dragon I”, remarkable achievements in the genetic code of rice and the successful launching and returning of the spacecraft Shenzhou III and Shenzhou IV. Fairly fast development continued in cultural and art undertakings, in broadcasting, movie and television programs and in news and publishing undertakings. Stable progress was made in public health undertakings. Vigorous development was scored in sports.

In 2003, China is facing with various challenges. There are some uncertainties that exist in world political and economic situations. There are still prominent problems that need to be solved, such as irrational economic structures, high employment pressure, slow increase of farmers’ income and income gap between urban and rural residents. However, general speaking, Chinese economic development still enjoys many favorable factors. In the 2003, under the leadership of the central party committee headed by Comrade Hu Jintao, people of all nationalities of China will hold high the great banner of Deng Xiaoping Theory, implement in full swing the important thought of “Three Represents”, earnestly carry out the spirit of the 16th Party Congress and the Economic Work Conference, and concentrate on construction and development. We will take active measures to face the difficulties and challenges brought by the change of the economic environment both at home and abroad by continuing the policy of expanding domestic demand, carrying out the pro-active fiscal policy and sound monetary policy, maintaining the continuity and stability of macro-economic policies, further deepening reforms and opening wider to the outside world in order to boost a sustained rapid and healthy development of the economy and overall progress of the society and to make further progress on the new height.