Aiding rural areas, improving the market economic system and 　　encouraging science and technology innovation are top priorities
　　for the country over the next five years
　　“What will China be like five years from now?”
　　Pondering that question, Shen Jilan, a 77-year-old farmer from north China’s Shanxi Province, replies confidently, “Surely, farmers’ lives will be greatly improved.”
　　Shen, the only national lawmaker elected for 10 consecutive terms since the National People’s Congress was inaugurated in 1954, took part in discussions on the 11th Five-Year Plan for National Social and Economic Development (2006-10) in March.
　　As a witness to changes that have taken place in the past five decades, she is hopeful about the coming years. “Just as today’s living standard is an improvement from five years ago, five years from now, we are going to have an even better life than today.”
　　But it is not only farmers who will enjoy better living conditions, according to Ma Kai, Minister in charge of the National Development and Reform Commission. In five years, the overall living standard will make great headway. By then, he said, China will have a larger gross domestic product (GDP), lower energy consumption per unit of GDP, an improved environment and better medical care and education services.
　　
　　Slowing economic growth
　　
　　The development plan for the next five years, which was approved by the National People’s Congress, the top legislature, on March 14, proposes 7.5 percent annual GDP growth on average and expects GDP to reach 26.1 trillion yuan by 2010.
　　Professor Liu Fuxiang at the Beijing-based University of International Business and Economics, however, thinks that figure may be an underestimate. He pointed out that the growth rate last year was 9.9 percent, and some economic programs in which investments were made several years ago will bear fruit in the coming years. Therefore, time is needed to see the growth rate drop to 7.5 percent, and he forecasts that the lowest average annual GDP growth rate will be no less than 8 percent.
　　In addition, a further appreciation of the yuan seems inevitable. “In this case, even if China’s economic aggregate hits 26.1 trillion yuan, its position in the world ranking in terms of this index will move up, perhaps by three notches,” Liu said. China currently is the sixth largest economy in the world, following the United States, Japan, Germany, Britain and France.
　　The next five years also will see an upgrading of China’s economic structure. According to the latest Five-Year Plan, the development of hi-tech industries will be put at the top of the agenda, focusing on innovative capability and an optimization of product mix, corporate structure and industrial distribution.
　　While China has already developed a certain industrial scale, the improvement of the overall quality and structure of its industries has now become an urgent task.
　　On March 20, Xu Guanhua, Minister of Science and Technology, signed a financial cooperation agreement with Chen Yuan, President of the China Development Bank, under which the state-owned policy lender will provide a loan of 50 billion yuan to support the country’s scientific and technological development.
　　Innovation will be strongly encouraged in the following four areas: electronic and information manufacturing, bioengineering, space technology and new materials.
　　With a 20 percent growth rate already evident for several years, China’s new and hi-tech industries will make a steadily increasing contribution to the country’s economic progress, the Five-Year Plan forecasts.
　　Encouraged by the Chinese Govern-ment, the consumption-oriented service sector will play a more important role in pushing forward the country’s GDP growth.
　　By 2010, China will have completed the change from an investment and export-based economic growth pattern to a consumption-driven one. With consumption accounting for 60 percent of GDP, consumer spending will be the engine of the country’s economic growth, under the government plan. Currently, personal consumption makes up 46.5 percent of China’s GDP.
　　
　　Focus on social development
　　
　　In the early 1980s, the Chinese Government adopted a policy under which some people were encouraged to become wealthy first, and those who were well-off were to help the less fortunate. This concept, however, led to an unexpected result--the widening gap between the rich and the poor--which has the potential to create growing social conflicts. As a result, the government is now encouraging “common affluence,” to narrow the gap and to curb the polarization of the rich and the poor.
　　In the years to come, social progress will receive at least as much attention as economic development. In this way, the government hopes to make up for social imbalances resulting from the overemphasis on economic development in past years. The government will provide more access to social welfare for poor and disadvantaged groups. Such areas as science and technology, education and health care will receive financial and policy support.
　　The underdevelopment of rural areas is the most striking social problem facing China. In response, the government has made the building of a “new countryside” a top priority by increasing investment and offering more aid to nurture talent in rural areas.
　　The annual per-capita net income of rural residents in 2005 stood at 3,225 yuan, a figure that is expected to climb to 4,150 yuan by 2010.
　　Under the current rural cooperative medical care system, farmers are required to pay 10 yuan for a year’s worth of medical services, while central and local governments contribute 10 yuan each. Beginning this year, however, central and local governments will each contribute an additional 10 yuan per farmer. This new system is expected to cover at least 80 percent of rural areas by 2010.
　　The gap between rural and urban areas in educational facilities will be gradually narrowed or even eliminated under the Five-Year Plan. The government plans to spend more than 20 million yuan on improving educational facilities in the countryside, such as the development of a “l(fā)ong-distance education” network. From this year, free compulsory education will gradually be expanded, with children from low-income families receiving subsidies so that all rural children can have access to education.
　　The government will try to coordinate the development of urban and rural areas and increase the country’s urbanization rate to 47 percent. The Central Government is requiring local governments to help migrant workers obtain access to social security, work-related insurance and public services. Local governments also have been asked to set a minimum wage for these workers and assure their democratic and political rights in accordance with the law.
　　In urban areas, employment will be promoted with the creation of 45 million new jobs for the expanding labor force, while the government aims to keep the registered unemployment rate below 5 percent.
　　
　　Clear sky and air
　　
　　The protection and restoration of the natural environment will be among major tasks of the government in the next five years.
　　It aims to reduce the discharge of major pollutants by 10 percent and increase forest coverage to 20 percent of the country’s land area by 2010, resulting in cleaner air.
　　As a measure to maintain ecological balance, the government has named 22 restricted development zones and 1,164 zones in which development is prohibited. The former mainly consists of deserts, forests, grasslands and marshes while the latter includes nature reserves and tourist sites, among others. These two special zones will encompass more than 60 percent of the country’s territory.
　　The government has also launched 10 ecological conservation projects. Among the key projects are the conservation of the sources of the Yellow and Yangtze rivers, together with the control of pollution in major river basins and the desulfurization of coal-fired power plants.
　　Under the plan, at least 70 percent of sewage in cities should be treated by 2010 and at least 70 percent of urban trash disposed of in an environmentally friendly manner.
　　The Five-Year Plan also indicates that energy consumption per unit of GDP should be 20 percent lower in 2010 than in 2005.
　　With 21 percent of the growth in the world’s energy demand occurring in China, the country is now one of the largest resource consumers in the world. In 2005, nearly 50 percent of the country’s oil supplies depended on imports. Statistics show that for each unit of GDP calculated in dollars, the energy consumption in China is 11.5 times that of Japan, 7.7 times that of Germany and France and 4.3 times that of the United States.
　　If China is to fulfill its objective of a 20 percent reduction in energy consumption per unit of GDP by 2010, it must achieve an annual energy consumption reduction of 4.4 percent on average. According to Minister Ma of the National Development and Reform Commission, China will take three approaches to fulfilling this goal. First, it will try to elevate the proportion of the economy devoted to hi-tech industries, the equipment manufacturing sector and the service sector, which have low energy consumption, and at the same time cut the percentage of energy-consuming industries, such as steel and aluminum. Second, advanced energy-saving technologies will be widely employed. Third, energy-saving behavior will be encouraged in people’s daily lives.
　　It is expected that by 2010, China’s environmental deterioration will be brought under control and such important resources as fresh water and key minerals will receive enhanced protection. By that time, irrigation water and solid industrial waste will be handled in a more efficient way.
　　
　　Problems persist
　　
　　Despite these goals, the issue of rural development may well remain the most striking problem facing China five years from now. In spite of farmers’ increasing income and the state’s large investment in agriculture and the countryside, solving rural problems is a time-consuming project. Although the gap in income and social development between rural and urban areas will be narrowed to some extent, no tangible change is expected to take place, according to the government.
　　Zhang Zuoji, Governor of northeast China’s Heilongjiang Province, said the biggest headache in the coming five years is shrinking per-capita resources. According to the Five-Year Plan, by 2010, China’s population will be maintained at 1.36 billion, implying that resources per capita will decline sharply, hindering the country’s future development. Therefore, he said, much work must be done to promote an energy-saving society and step up research on alternative energy sources.
　　Zhong Wei, professor at the Department of Economics of Beijing Normal University, pointed out that if all the objectives set up in the Five-Year Plan are fulfilled by 2010, potential social conflicts resulting from the gap between the rich and the poor may be relieved to some degree, but such problems as the poorly developed economic system will remain nagging issues.
　　Although the government is encouraging private capital to enter such sectors as railways, oil and telecommunications, no tangible results will be produced because these sectors are unlikely to be deprived of their monopoly status in China’s economy in the years to come, he said.
　　

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