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Chapter Eight ‖ Comprehensively Advancing Socialism with Chinese Characteristics into the 21st Century

Editorial Group of This Book

January 1, 2021

第八章 把中国特色社会主义全面推向21世纪

本书编写组

Chapter Eight ‖ Comprehensively Advancing Socialism with Chinese Characteristics into the 21st Century第八章 把中国特色社会主义全面推向21世纪

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Originally Written By
Editorial Group of This Book本书编写组
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CPC History Press中共党史出版社

Chapter Eight ‖ Comprehensively Advancing Socialism with Chinese Characteristics into the 21st Century

第八章 ‖ 把中国特色社会主义全面推向 21 世纪

In the second half of 1992, the Chinese Communist Party was preparing to convene its Fourteenth National Congress. Following Deng Xiaoping’s Southern Tour talks, there was intense domestic and international attention on how China’s reform and opening up would take its next steps. In the course of guiding the drafting of the report for the Fourteenth Party Congress, on June 9, Jiang Zemin went to the Central Party School to deliver a speech to an advanced studies class for provincial and ministerial-level cadres, titled “Profoundly Grasp and Comprehensively Implement the Spirit of Comrade Deng Xiaoping’s Important Talks, and Advance Economic Construction and Reform and Opening Up Faster and Better.” This was in effect a “briefing session” to solicit opinions and build consensus around the Fourteenth Party Congress report. In the speech, Jiang Zemin enumerated several formulations regarding the target model for economic system reform, and indicated his preference for the formulation “socialist market economic system.” After the meeting, Jiang Zemin solicited the opinions of Deng Xiaoping and other comrades on this matter. Deng Xiaoping expressed his approval, saying: this gives the Fourteenth Party Congress a central theme. Jiang Zemin’s speech made important ideological and theoretical preparations for the convening of the Fourteenth Party Congress.

I. The Fourteenth Party Congress and the Establishment of the Socialist Market Economic System

The Fourteenth Party Congress

From October 12 to 18, 1992, the Fourteenth National Congress of the Chinese Communist Party was held in Beijing. Jiang Zemin delivered a report titled “Accelerating the Pace of Reform, Opening Up, and Modernization, and Winning Greater Victories in the Cause of Socialism with Chinese Characteristics.”

The Congress made three decisions of far-reaching significance.

The first was to seize opportunities, accelerate development, and concentrate efforts on advancing economic construction. The Congress pointed out that whether our state’s economy can develop more rapidly is not only a major economic question but also a major political question. Domestic conditions are now in place and the international environment is favorable; there are challenges, but more importantly there are opportunities—it is a good time to accelerate development. The Congress adjusted the projected pace of economic development for China in the 1990s, revising the original target of average annual growth in gross national product of 6 percent upward to 8 to 9 percent. It proposed that by the end of the 20th century, the overall quality of our state’s national economy and its composite national strength would reach a new level, gross national product would surpass the original target of quadrupling from the 1980 baseline, and the people’s standard of living would advance from subsistence to a moderately prosperous level.

The second was to establish the goal of building a socialist market economic system as the target of our state’s economic system reform. The Congress pointed out that determining what kind of target model to adopt for our state’s economic system reform is a major question bearing on the overall landscape of socialist modernization. The core of this question is correctly understanding and handling the relationship between planning and the market. The development of practice and the deepening of understanding require the Party to clearly propose that the goal of our state’s economic system reform is to establish a socialist market economic system, so as to further liberate and develop the productive forces. The socialist market economic system our state is to establish is integrated with the basic socialist institutional framework; its purpose is to enable the market to play a foundational role in resource allocation under the state’s macro-level regulation and control, so that economic activity follows the requirements of the law of value and adapts to changes in supply and demand.

The third was to put forward the task of arming the entire Party with Comrade Deng Xiaoping’s theory of building socialism with Chinese characteristics. The Congress report summarized the main content of the theory of building socialism with Chinese characteristics from nine aspects: the path of development, the stage of development, the fundamental task, the driving force of development, external conditions, political guarantees, strategic steps, the leading and relying forces, and national reunification. It pointed out that this theory was the first to provide a relatively systematic and preliminary answer to a series of basic questions about how to build socialism, and how to consolidate and develop socialism, in a country like China with a relatively backward economy and culture, and that it inherited and developed Marxism with new ideas and viewpoints. ★ The venue of the Fourteenth Party Congress The Central Advisory Commission assisted the Party Central Committee in carrying out a large volume of highly effective work, rendered historic contributions to the Party, the state, and the people in the new historical period, and admirably fulfilled its mission.

summarized the main content of this theory, pointing out that it was the first to provide a relatively systematic and preliminary answer to a series of fundamental questions about how to build socialism and how to consolidate and develop socialism in a country like China with a comparatively backward economy and culture, thereby inheriting and developing Marxism through new ideas and perspectives.

The Congress deliberated and adopted the report and the Amendments to the Constitution of the Chinese Communist Party. The amended Party Constitution incorporated the theory of building socialism with Chinese characteristics and the Party’s basic line for the Initial Stage of Socialism; explicitly proposed that party building must closely revolve around the Party’s basic line, uphold strict governance of the Party, and build the Party into a strong core leading the entire people along the path of socialism with Chinese characteristics in unceasing advance; added provisions on the importance of discipline, stipulating that party discipline is the code of conduct that must be observed by party organizations at all levels and all party members, and requiring that party organizations and party members strictly implement and uphold party discipline and consciously accept its constraints.

The Congress elected the Fourteenth Central Committee and the Central Commission for Discipline Inspection, and decided not to re-establish the Central Advisory Commission. From the Twelfth to the Fourteenth Party Congress,

The First Plenary Session of the Fourteenth Central Committee elected Jiang Zemin, Li Peng, Qiao Shi, Li Ruihuan, Zhu Rongji, Liu Huaqing, and Hu Jintao as members of the Standing Committee of the Political Bureau; elected Jiang Zemin as General Secretary of the Central Committee; decided that Jiang Zemin would serve as Chairman of the Central Military Commission; and approved Wei Jianxing as Secretary of the Central Commission for Discipline Inspection.

Driven by the spirit of Deng Xiaoping’s Southern Tour talks and the Fourteenth Party Congress, China’s reform and opening up set sail anew. Enthusiasm surged across the country and the economy developed rapidly. The world’s attention also focused on China, and a new wave of investment fever took hold. Marked by Deng Xiaoping’s Southern Tour talks and the Fourteenth Party Congress, our state’s reform and opening up and the cause of socialist modernization entered a new stage of development.

The Formulation and Implementation of the Program for Establishing the Socialist Market Economic System

Establishing the socialist market economic system was a major decision made by the Fourteenth Party Congress. Practice since the beginning of reform and opening up had fully demonstrated that the existing economic system could no longer meet the requirements of developing the social productive forces, and that piecemeal repairs were far from sufficient to resolve the problem. A fundamental reform of the planned economic system was necessary to establish a socialist market economic system full of vitality, one capable of allowing the market to play a foundational role in resource allocation.

However, people still held differing views on why it was necessary to add the four characters “socialist” before “market economy.” On this point, Jiang Zemin made clear: “The characters ‘socialist’ cannot be omitted—they are not superfluous, not ‘painting a snake and adding feet,’ but rather the opposite: they are ‘adding the eyes to the painted dragon.’ The so-called ‘adding the eyes’ means making clear the nature of our market economy,” and “our creativity and distinctive character are embodied precisely here.” This made clear that our state’s socialist market economic system must be integrated with our national conditions; it cannot be identical to that of Western countries and must not be copied wholesale. The socialist market economic system shares the common features of a general market economy while also bearing the distinctive characteristics of our state; the relationship between giving play to the role of the market and strengthening macro-level regulation and control must be properly handled.

Combining the basic socialist institutional framework with a market economy to establish a socialist market economic system is the result of more than a decade of arduous exploration since reform and opening up began. It is a great creative achievement of the Chinese Communist Party, a major development of Marxism by Chinese Communists, and a major breakthrough in the history of socialist development. It has played an extremely important role in our state’s reform and opening up and in economic and social development.

In accordance with the decisions of the Fourteenth Party Congress, the Party Central Committee and the State Council made a series of corresponding institutional reforms and policy adjustments, while at the same time pressing ahead with the formulation of an overall plan and implementing it in a planned and step-by-step manner.

In November 1993, the Third Plenary Session of the Fourteenth Central Committee deliberated and adopted the Decision of the Central Committee of the Chinese Communist Party on Several Issues Concerning the Establishment of a Socialist Market Economic System, which further concretized the goals and basic principles of economic system reform put forward by the Fourteenth Party Congress and formulated an overall plan for establishing the socialist market economic system. Its basic framework was: on the foundation of upholding public ownership as the mainstay while allowing diverse forms of ownership to develop together, establish a modern enterprise system, a unified and open national market system, a sound macro-level regulation and control system, a rational income distribution system, and a multi-tiered social security system. Our state’s economic system reform began to advance comprehensively toward the goal of establishing a socialist market economic system.

In accordance with the Party Central Committee’s requirements for establishing a socialist market economic system, the State Council made a series of deployments to accelerate the pace of institutional reform in the areas of public finance, taxation, finance, foreign trade, foreign exchange, planning, investment, pricing, and circulation.

Reform brought improvements in supply capacity and an abundance of material goods. After 1992, our state fully liberalized the purchase and sale prices and operations for grain. Not only grain, but the scope of goods priced by the market came to encompass nearly all consumer goods. Price reform, which had encountered setbacks at one point, succeeded without causing major disruption. In 1993, our state abolished grain ration coupons, bringing to an end the unified grain procurement and distribution system that had been in place for 40 years. The grain coupons, oil coupons, and various other ration tickets that had once been indispensable to people’s daily lives entered the history museum.

Reform of state-owned enterprises was the central link—and the most difficult aspect—of establishing the socialist market economic system. During this period, state-owned enterprise reform moved from the previous approach of delegating power and yielding profits and making policy adjustments into a stage of transforming mechanisms and institutional innovation. Beginning at the end of 1994, the State Economic and Trade Commission and the State Commission for Restructuring the Economy, together with relevant departments, selected 100 large and medium-sized state-owned enterprises to pilot the establishment of a modern enterprise system. Subsequently, more than 2,700 state-owned enterprises across the country were selected to participate in the pilot program. The State Council also selected 18 cities to conduct coordinated reform pilots for “optimizing capital structure,” adopting a variety of policies to achieve key breakthroughs in reducing enterprises’ debt burdens, separating social service functions, and redistributing surplus personnel.

The above reforms and adjustments accelerated in practical terms the pace of transition from a planned economic system to a socialist market economic system, significantly strengthened the foundational role of the market in resource allocation, and presented a picture of reform and opening up advancing comprehensively and economic construction developing rapidly across the country.

II. Strengthening Macro-Level Regulation and Control and Achieving an Economic “Soft Landing”

Achieving an Economic “Soft Landing”

In the course of rapid economic development, some localities and departments pursued high growth rates one-sidedly. Combined with the gradual failure of the existing macro-level regulation and control mechanisms and the fact that new regulatory mechanisms had not yet been fully established, this led to new problems: excessive growth in fixed asset investment, real estate fever, development zone fever, disorder in the financial system, and rising prices. The Party Central Committee identified these warning signs relatively quickly. As early as the first half of 1992, it repeatedly cautioned against the emergence of an overheated economy, emphasizing the need to work hard on deepening reform and to avoid focusing solely on expanding the scale of investment, so as to prevent new instances of redundant construction and product stockpiling. In April 1993, the Center convened an economic situation briefing, focusing discussion on resolving problems such as disorderly fundraising, unauthorized inter-bank lending, real estate fever, and development zone fever. In June, the Central Committee of the Chinese Communist Party and the State Council issued the Opinions on the Current Economic Situation and Strengthening Macro-Level Regulation and Control, deciding to adopt 16 measures centered on rectifying financial order. These measures primarily involved strictly controlling money issuance, resolutely correcting unauthorized inter-bank lending of funds, resolutely halting all forms of disorderly fundraising, strictly controlling the total scale of credit, and stabilizing foreign exchange market prices. Accordingly, the State Council successively convened a national financial work conference and a national fiscal and taxation work conference, intensifying the rectification of the financial and fiscal-taxation spheres.

This round of macro-level regulation and control, in addition to employing necessary administrative means and organizational measures, focused primarily on using economic and legal instruments, seeking solutions through accelerating the transition between old and new systems, and turning the resolution of prominent problems in economic operations into a driving force for accelerating reform and establishing the socialist market economic system. After three years of effort, macro-level regulation and control achieved significant results: excessive investment growth was effectively controlled, financial order gradually improved, the total scale of credit was brought under control, and prices were gradually liberalized while the rate of increase fell markedly. This round of macro-level regulation and control successfully curbed inflation while maintaining a relatively rapid pace of economic growth, achieving a “soft landing” from an overheated economy and inflation to high growth and low inflation. It avoided major economic boom-and-bust cycles and laid the foundation for healthy economic development and for successfully weathering the impact of the Asian financial crisis that followed.

Completion of the Eighth Five-Year Plan

In the course of strengthening macro-level regulation and control and deepening reform, the main targets set by the Eighth Five-Year Plan were met or exceeded, and the national economy and social development achieved remarkable results. During the Eighth Five-Year Plan period, the national economy sustained rapid growth, with gross national product growing at an average annual rate of 12.3 percent and reaching 6.113 trillion yuan in 1995. The original target of quadrupling gross national product from the 1980 baseline by the year 2000 was achieved five years ahead of schedule. Urban and rural residents’ living standards continued to improve, with per capita disposable income of urban residents growing at an average annual rate of 7.9 percent and per capita net income of rural residents growing at an average annual rate of 4.3 percent. All undertakings in our state advanced comprehensively, and the social productive forces, composite national strength, and people’s living standards reached a new level.

In September 1995, the Fifth Plenary Session of the Fourteenth Central Committee adopted the Proposals of the Central Committee of the Chinese Communist Party for Formulating the Ninth Five-Year Plan for National Economic and Social Development and the Long-Range Objectives for the Year 2010, making new deployments for achieving the second-step development strategy target during the Ninth Five-Year Plan period: by the year 2000, with China’s population having grown by approximately 300 million compared to 1980, to achieve per capita gross national product quadrupled from the 1980 baseline; to basically eliminate poverty, with the people’s standard of living reaching a moderately prosperous level; to accelerate the building of a modern enterprise system and to initially establish a socialist market economic system. The Proposals set the main goals for 2010 as: to double gross national product compared to the year 2000, enabling the people’s moderately prosperous life to become more comfortable, and to form a relatively sound socialist market economic system. The Proposals emphasized that the key to achieving these goals was to carry out two fundamental transformations of overall significance: first, the transformation of the economic system from the traditional planned economic system to a socialist market economic system; and second, the transformation of the mode of economic growth from extensive to intensive, so as to promote sustained, rapid, and healthy development of the national economy and comprehensive social progress.

Jiang Zemin delivered a speech at the closing of the plenary session, providing a profound exposition of 12 major relationships in socialist modernization. The most important of these was correctly handling the relationship among reform, development, and stability. He emphasized that reform is the driving force, development is the goal, and stability is the prerequisite; that reform and development must be advanced within a context of political and social stability, and that long-term political and social stability must be achieved through the advancement of reform and development. This was a profound summation of the historical experience of our state’s reform and opening up and socialist modernization.

III. The Fifteenth Party Congress, the Establishment of Deng Xiaoping Theory as the Party’s Guiding Ideology, and the Deepening of Reform and Opening Up

The Fifteenth Party Congress

On February 19, 1997, Deng Xiaoping—the chief architect of China’s socialist reform and opening up and modernization—passed away. The whole world was watching to see whether the Chinese Communist Party could continue along the path of socialism with Chinese characteristics that Deng Xiaoping had blazed.

From September 12 to 18, 1997, the Fifteenth National Congress of the Chinese Communist Party was held in Beijing. Jiang Zemin delivered a report titled “Hold High the Great Banner of Deng Xiaoping Theory and Comprehensively Advance the Cause of Building Socialism with Chinese Characteristics into the Twenty-First Century.”

The Congress pointed out that the question of the banner is of paramount importance. The banner is the direction; the banner is the image. The Congress was the first to use the concept of “Deng Xiaoping Theory,” designating this theory as the banner guiding the Party to continue moving forward. The Congress emphasized that upholding the line established since the Third Plenary Session of the Eleventh Central Committee without wavering means holding high the banner of Deng Xiaoping Theory without wavering. In the new period of reform and opening up and socialist modernization, on the new journey spanning the century, we must hold high the great banner of Deng Xiaoping Theory and use Deng Xiaoping Theory to guide our entire cause and all our work.

The Congress put forward the Party’s basic program for the Initial Stage of Socialism and expounded ▶ A Brief History of the Chinese Communist Party on the goal of, guided by Marxism, cultivating citizens with ideals, moral integrity, education, and discipline, and developing a socialist culture that is national, scientific, and popular in character, oriented toward modernization, toward the world, and toward the future. These expositions reflected yet another deepening of the Party’s ideological and theoretical understanding in its exploration of the questions of what socialism is and how to build it.

★ The venue of the Fifteenth Party Congress

The Congress expounded on the basic characteristics and requirements of the economy, politics, and culture of building socialism with Chinese characteristics. It made new expositions on major questions including the ownership structure and forms of realization of public ownership during the Initial Stage of Socialism in our state, governing the country according to law and building a socialist law-based state, and the building of a culture with Chinese characteristics. The Congress pointed out that the system of public ownership as the mainstay with diverse forms of ownership developing together is a basic economic system for the Initial Stage of Socialism in our state. The public-ownership economy encompasses not only the state-owned economy and the collective economy, but also the state-owned and collective components within the mixed-ownership economy. The state-owned economy plays a leading role in economic development, manifested primarily in its capacity for control. The forms of realization of public ownership can and should be diversified. The non-public-ownership economy is an important component of our state’s socialist market economy. Governing the country according to law is the basic strategy by which the Party leads the people in governing the state; it is an objective requirement for developing the socialist market economy, an important marker of social civilization and progress, and an important guarantee for the state’s long-term stability. Building a culture with Chinese characteristics means, guided by Marxism,

As the second-step target of our state’s “three-step” economic development strategy was on the verge of being achieved, the Congress made further plans for how to achieve the third-step target, putting forward a new “three-step” development strategy: in the first decade of the next century, to double gross national product compared to the year 2000, enabling the people’s moderately prosperous life to become more comfortable and forming a relatively sound socialist market economic system; after another decade of effort, by the time of the centenary of the founding of the Chinese Communist Party, to achieve further development of the national economy and greater improvement of all institutional arrangements; and by the middle of the next century, at the centenary of the founding of the People’s Republic of China, to have basically achieved modernization and built a prosperous, strong, democratic, and culturally advanced socialist state. The Congress made strategic deployments for our state’s cross-century development around this development strategy.

The Congress emphasized the need to comprehensively strengthen party building in terms of ideology, organization, and conduct, in accordance with the overall goal of the new great project of party building; to continuously improve the level of leadership and governance; to continuously enhance the capacity to resist corruption and prevent degeneration; and, with a new bearing and greater fighting strength, to lead the people in completing new historical tasks.

The Congress deliberated and adopted the report and the Amendments to the Constitution of the Chinese Communist Party, and elected the Fifteenth Central Committee and the Central Commission for Discipline Inspection. The First Plenary Session of the Fifteenth Central Committee elected Jiang Zemin, Li Peng, Zhu Rongji, Li Ruihuan, Hu Jintao, Wei Jianxing, and Li Lanqing as members of the Standing Committee of the Political Bureau; elected Jiang Zemin as General Secretary of the Central Committee; decided that Jiang Zemin would serve as Chairman of the Central Military Commission; and approved Wei Jianxing as Secretary of the Central Commission for Discipline Inspection.

Establishing Deng Xiaoping Theory as the Party’s Guiding Ideology

The Fifteenth Party Congress incorporated Deng Xiaoping Theory into the Party Constitution alongside Marxism-Leninism and Mao Zedong Thought as the Party’s guiding ideology. This was a historic decision made by the Party after nearly 20 years of successful practice in reform and opening up and socialist modernization. It expressed the entire Party’s resolve and conviction to comprehensively advance the cause of socialism with Chinese characteristics that Deng Xiaoping had pioneered, and also reflected the consensus and aspirations of the entire people.

The report of the Fifteenth Party Congress pointed out that Deng Xiaoping Theory took shape and developed gradually under the historical conditions in which peace and development had become the theme of the times, in the practice of our state’s reform and opening up and modernization, and on the basis of summing up the historical experience of both the victories and setbacks of socialism in our state while drawing on the historical experience of the rise and fall of other socialist countries. It grasped the fundamental question of “what is socialism and how to build it,” provided for the first time a relatively systematic and preliminary answer to a series of basic questions about building socialism with Chinese characteristics, and guided the Party in formulating the basic line for the Initial Stage of Socialism. It is a relatively complete scientific system that runs through the realms of philosophy, political economy, and scientific socialism, and encompasses the areas of economics, politics, science and technology, education, culture, ethnic affairs, the military, foreign affairs, the united front, and party building—and it is also a scientific system that needs to be further enriched and developed in all its aspects.

Deng Xiaoping Theory opened up new horizons for Marxism; it is a new stage in the development of Marxism in China, the Marxism of contemporary China, and the founding work of the theoretical system of socialism with Chinese characteristics. The Fifteenth Party Congress provided a profound exposition of the historical status and guiding significance of Deng Xiaoping Theory, pointing out that the integration of Marxism-Leninism with Chinese realities has undergone two historic leaps, producing two great theoretical achievements. The theoretical achievement of the first leap is the correct theory and summation of experience concerning China’s revolution and construction that has been proven by practice; its principal creator was Mao Zedong, and our Party calls it Mao Zedong Thought. The theoretical achievement of the second leap is the theory of building socialism with Chinese characteristics; its principal creator was Deng Xiaoping, and our Party calls it Deng Xiaoping Theory. Both of these great theoretical achievements are the crystallization of the practical experience and collective wisdom of the Party and the people.

Comprehensive Advancement of Rural Reform and the Reorganization and Transformation of State-Owned Enterprises

After the Fifteenth Party Congress, the Party Central Committee took a series of important measures to accelerate the advancement of reform, emphasizing the need to focus particularly on two major areas: first, strengthening the foundational status of agriculture; and second, running the large and medium-sized state-owned enterprises well.

On the question of rural reform and development, in March 1995, during an inspection of agricultural and rural work in Jiangxi, Jiang Zemin reaffirmed and further elaborated on Deng Xiaoping’s thinking on “two leaps” in agricultural reform and development,[1] pointing out that the household contract responsibility system must be maintained stable and unaltered over the long term while being continuously improved, and that at the same time, from a long-term perspective, gradually moving toward the path of intensive and collective management is the general direction for rural development.

As the pace of establishing the socialist market economic system accelerated, the contradictions between our state’s agricultural management system and industrial structure on the one hand and the market economy on the other became increasingly prominent. To address this, the Party Central Committee put forward in a timely manner the guideline of implementing strategic adjustments to the agricultural structure. In October 1998, the Third Plenary Session of the Fifteenth Central Committee adopted the Decision of the Central Committee of the Chinese Communist Party on Several Major Issues Concerning Agriculture and Rural Work, proposing that by 2010, a rural economic system adapted to the requirements of developing a socialist market economy would be basically established, with household contract management as its foundation and supported by an agricultural socialized service system, an agricultural product market system, and a state support and protection system for agriculture. The plenary session’s proposal to steadfastly implement the policy of extending land contract periods by another 30 years enabled hundreds of millions of farmers to work and manage their contracted land with peace of mind, promoting agricultural development.

To resolve the problems of subsistence and income growth for farmers in impoverished areas, the Party and government adopted a range of measures to intensify the assault on poverty. Since the 1980s, the Party and government had carried out large-scale, organized, and planned poverty alleviation work across the country. The National Eight-Seven Poverty Alleviation Plan, formulated and implemented in 1994, proposed to basically resolve the subsistence problems of 80 million rural poor within approximately seven years. In the course of implementing the plan, cumulative central government poverty alleviation funds totaled 112.7 billion yuan. By the end of 2000, the number of rural poor who had not yet achieved subsistence had been reduced to 32.09 million, accounting for approximately 3.5 percent of the rural population. The production and living conditions of the 592 nationally designated poverty-stricken counties improved markedly; most administrative villages achieved access to electricity, roads, postal services, and telephone service; and the state of poverty was alleviated.

While advancing rural reform, reform pilots for establishing a modern enterprise system in state-owned enterprises—launched at the end of 1994 in accordance with the goals of clear property rights, well-defined responsibilities, separation of government from enterprise, and scientific management—achieved initial results. However, due to the heavy burden of historical legacies and social obligations, compounded by the impact of the 1997 Asian financial crisis, state-owned enterprises faced unprecedented difficulties. State-owned enterprise reform had to seek new approaches in order to achieve new breakthroughs. The Fifteenth Party Congress put forward the three-year target for state-owned enterprise reform and extrication from difficulties: within approximately three years, through reform, reorganization, transformation, and strengthened management, to enable most large and medium-sized loss-making state-owned enterprises to overcome their difficulties, and to enable most large and medium-sized backbone state-owned enterprises to initially establish a modern enterprise system.

After the Fifteenth Party Congress, the assault on state-owned enterprise reform oriented toward establishing a modern enterprise system was launched comprehensively. The State Council, following the reform approach of encouraging mergers, standardizing bankruptcies, redistributing workers through layoffs, reducing staff to increase efficiency, and implementing a re-employment program, used the textile industry as a breakthrough point and, through a series of measures including debt-to-equity swaps, special state funds for technological transformation, listing state enterprises on stock markets to realize assets, and policy-based closure and bankruptcy, launched a comprehensive three-year battle to extricate enterprises from difficulties. In 1998, a number of very large enterprise groups operating according to market requirements—including China National Petroleum Corporation, China Petrochemical Corporation, and Shanghai Baosteel Group—were successively established, taking an important step toward building a modern enterprise system. These large state-owned enterprises operated according to market requirements and no longer performed administrative functions, enhancing their capacity for self-development and participation in international competition. Small state-owned enterprises, leveraging the advantage of being “small boats that are easy to turn around,” adopted forms such as reorganization, consolidation, merger, leasing, contracted management, share-cooperative systems, and sale to accelerate the pace of reform. By the end of 2000, the three-year target for the reform and extrication from difficulties of large and medium-sized state-owned enterprises was basically achieved; profits realized by state-controlled enterprises increased substantially; and most large and medium-sized backbone state-owned enterprises had initially established a modern enterprise system.

In the course of accelerating economic structural adjustment and deepening state-owned enterprise reform, in order to address the problem of large numbers of workers being laid off, the Party Central Committee repeatedly emphasized that the broad workforce of state-owned enterprises had made major contributions to the state over decades; the full strength of the entire Party and society must be mobilized to carry out, with wholehearted enthusiasm and the utmost sense of responsibility, the work of guaranteeing the basic livelihoods of laid-off state-owned enterprise workers and helping them find new employment. In 1996, Shanghai took the lead in establishing re-employment service centers and vigorously advancing the re-employment program. After this “people’s livelihood project” was extended nationwide, it built a bridge for redistributed state enterprise workers from enterprise to market. In June 1998, the Party Central Committee and the State Council issued a notice requiring that, within approximately five years, a social security system and employment mechanism adapted to the requirements of the socialist market economic system be initially established. Local governments at all levels, in accordance with central deployments, established three lines of protection for laid-off workers: basic livelihood guarantees, unemployment insurance, and the urban residents’ minimum livelihood guarantee. They also launched reform of the social security system, with workers’ pension insurance and medical insurance as the focus. Many localities also guided workers to change their employment concepts through strengthened vocational training, actively developed the tertiary sector, and broadened employment channels. These measures safeguarded the basic livelihoods of laid-off workers and to a great extent dissolved the difficulties and risks of state-owned enterprise reform.

The Formation of a Comprehensive, All-Directional Pattern of Opening Up

Deepening reform domestically and expanding opening up externally are closely interlinked. In the highly complex international environment of the 1990s, the Party Central Committee keenly observed and firmly grasped the irreversible developmental trend of economic globalization, upheld without wavering the basic state policy of opening up to the outside world, and drove opening up to take major strides forward.

The Fourteenth Party Congress and the Third Plenary Session of the Fourteenth Central Committee proposed expanding the geographic scope of opening up, forming a multi-tiered, multi-channel, all-directional pattern of opening up, making full use of both international and domestic markets and both types of resources, and actively advancing strategic measures such as competing on quality and diversifying markets. As certain preferential policies and flexible measures originally implemented in the special economic zones were gradually extended to the interior, some cadres in the special economic zones began to question whether the zones were still “special,” whether they still needed to be “special,” and whether they should continue to develop. In 1994, the Party Central Committee made clear that the Center’s resolve to develop the special economic zones had not changed, the Center’s basic policies toward the special economic zones had not changed, and the historical status and role of the special economic zones in the nation’s overall reform, opening up, and modernization had not changed—the special economic zones should “create new advantages and reach new heights.”

The Fifteenth Party Congress further proposed that opening up to the outside world is a long-term basic state policy; that we must engage the world with a more proactive posture, improve the all-directional, multi-tiered, and broad-sphere pattern of opening up, develop an open economy, and enhance international competitiveness. In February 1998, the Second Plenary Session of the Fifteenth Central Committee drew profound lessons from the Asian financial crisis, proposing that we must both dare to and be adept at participating in international economic and technological cooperation and competition under conditions of economic globalization; that we must both make full use of the favorable conditions and opportunities available to develop ourselves, and be clear-eyed in recognizing and timely in guarding against the various adverse influences and risks that may arise, steadily advancing opening up while maximizing benefits and minimizing harm and maintaining the initiative. Subsequently, the Party Central Committee further pointed out that economic globalization is a “double-edged sword”—it has both advantages and disadvantages for our state’s development. We must both steadfastly implement opening up to the outside world and uphold independence and self-reliance, strengthen risk awareness, reinforce preventive work, effectively safeguard our state’s economic security, and better develop and strengthen ourselves.

In accordance with these major decisions, and under the vigorous promotion of the Party Central Committee and the State Council, our state expanded opening up in coastal cities, inland border cities, cities along major rivers, and provincial capitals, establishing a number of economic and technological development zones and bonded zones. At the same time, it clarified the development strategy of using the Shanghai Pudong New Area as the leading force to drive the economic takeoff of the Yangtze River basin, and determined to build Shanghai into an international economic, financial, and trade center in the early 21st century. By 1997, a new pattern of multi-tiered, multi-channel, all-directional opening up—from the coast to the rivers, from the borders to the interior—had gradually taken shape.

Joining the World Trade Organization was an event of historic significance in our state’s process of reform and opening up, and also an important opportunity to further advance all-directional, multi-tiered, and broad-sphere opening up. The Chinese government applied in July 1986 to restore its status as a contracting party to the General Agreement on Tariffs and Trade and began negotiations with the contracting parties. After the World Trade Organization was established in January 1995, China began conducting bilateral negotiations one by one with WTO member states in a protracted back-and-forth process; the negotiations were turbulent, with the Sino-American negotiations being particularly complex and difficult. From seeking to “restore GATT membership” to “joining the WTO,” China conducted negotiations spanning 15 years. Throughout this period, the Party Central Committee consistently attached great importance to the matter and did a great deal of work. On November 10, 2001, the Fourth WTO Ministerial Conference held in Doha, Qatar, adopted the decision on China’s accession to the World Trade Organization. On December 11, China officially became the 143rd member of the WTO. Integration into the world economy is the great direction of history. For China’s economy to develop, it must dare to swim in the vast ocean of the world market; if it does not dare to brave the winds and waves of the open sea and gain experience, it will one day drown in that ocean. Therefore, China boldly stepped toward the world market. Practice has proven that joining the World Trade Organization gave China’s economy a favorable position to participate in rule-making and competition in the process of globalization, thereby opening up new vistas for opening up to the outside world, gaining a broader space for development, and exerting a profound influence on driving economic system reform and modernization.

IV. The Formulation and Implementation of Cross-Century Development Strategies

The Strategy of Revitalizing the Nation Through Science, Technology, and Education

Competition among nations in the modern world is, at bottom, competition in composite national strength, and the key lies in competition in science and technology. The formulation and implementation of the strategy of revitalizing the nation through science, technology, and education took shape gradually on the basis of growing recognition of the role of science and technology in driving our state’s modernization. In 1993, the Law of the People’s Republic of China on Scientific and Technological Progress was promulgated and implemented—the first law on science and technology in the history of New China. In May 1995, the Party Central Committee accurately analyzed trends in techno-scientific development and the domestic and international situation, and made a decision on accelerating scientific and technological progress, determining to implement the strategy of revitalizing the nation through science, technology, and education. Revitalizing the nation through science, technology, and education means comprehensively implementing the idea that science and technology constitute the primary productive force, upholding education as the foundation, placing science and technology and education in an important position in economic and social development, enhancing the state’s techno-scientific strength and its capacity to transform that strength into real productive forces, raising the techno-scientific and cultural quality of the entire nation, shifting economic construction onto a track of reliance on scientific and technological progress and improvement of the quality of the workforce, and accelerating the realization of national prosperity and strength. Implementing the strategy of revitalizing the nation through science, technology, and education requires continuously improving innovation capacity. On May 26, Jiang Zemin emphasized at the National Conference on Science and Technology: innovation is the soul of a nation’s progress and the inexhaustible driving force of a state’s ★ Jiang Zemin speaking at the National Conference on Science and Technology prosperity and development. At this time, the Party Central Committee, the State Council, and the Central Military Commission made a decision to solemnly commend 23 techno-scientific experts who had made outstanding contributions to the development of the “Two Bombs and One Satellite.” The Party Central Committee and the State Council decided to establish the State Supreme Science and Technology Award beginning in 2000, and on February 19, 2001, held the State Science and Technology Awards Conference. Renowned mathematician Wu Wenjun and “father of hybrid rice” Yuan Longping were awarded the 2000 State Supreme Science and Technology Award, generating a powerful response throughout society.

A nation without the capacity for innovation will find it difficult to stand tall among the world’s advanced nations. While studying and introducing advanced foreign technologies, we must perseveringly and unremittingly work to enhance the state’s capacity for independent research and development.

After the Party Central Committee put forward the strategy of revitalizing the nation through science, technology, and education, while continuing to implement the “863 Plan,” in 1997 it organized the implementation of the National Key Basic Research Development Plan (the “973 Plan”) to strengthen basic research guided by national strategic objectives. The Party Central Committee also keenly recognized that informatization is a techno-scientific innovation of profound transformative significance, and emphasized the need to actively promote the integration of industrialization and informatization, using informatization to drive industrialization and achieve leapfrog development. During this period, our state’s techno-scientific undertakings achieved tremendous results. In November 1999, the successful launch of the first unmanned experimental spacecraft, “Shenzhou I,” marked a major breakthrough in our state’s manned spaceflight technology. The advent of the “Shenwei” computer in 1999 broke the blockade that Western countries had imposed on our state in the area of high-performance computing technology.

To encourage the broad community of scientific and technological personnel to make contributions, on the occasion of the 50th anniversary of the founding of New China,

In the area of education, the Central Committee of the Chinese Communist Party and the State Council promulgated the Outline for Reform and Development of Education in China in February 1993, explicitly proposing that education must be placed in a strategically prioritized position of development, and that efforts must be made to raise the ideological, moral, scientific, and cultural level of the entire nation—emphasizing that this is the fundamental plan for realizing our state’s modernization. In September 1995, the Education Law of the People’s Republic of China came into formal effect, providing legal guarantees for the development of education. In the same year, the state officially launched the “211 Project”—oriented toward the 21st century, to focus on building approximately 100 institutions of higher education and a number of key disciplines. In 1999, the state began implementing the “985 Project,” providing focused support for a number of universities to build world-class universities and a number of first-rate disciplines. The state rationally adjusted the layout and structure of higher education institutions, promoted reform of higher education and various forms of cooperative schooling, and gradually changed the long-standing situation of compartmentalization and redundant construction in higher education, making the allocation of educational resources more rational. In the areas of basic education and vocational and technical education, a new system of schooling combining government as the primary provider with social participation gradually took shape. The state substantially increased investment in education, providing strong support for the reform of the educational system and the development of educational undertakings.

The Sustainable Development Strategy

Against the backdrop of our state’s high-speed and extensive economic growth and an ever-expanding economic scale, the question of sustainable development attracted increasing high-level attention from the Party Central Committee. Following the 1992 United Nations Conference on Environment and Development, the Party Central Committee and the State Council explicitly proposed implementing a sustainable development strategy. In 1994, our state published China’s Agenda 21—White Paper on China’s Population, Environment, and Development in the 21st Century, putting forward an overall strategy, countermeasures, and action plans for sustainable development. The Fifteenth Party Congress and the First Session of the Ninth National People’s Congress convened in March 1998 both designated the implementation of the sustainable development strategy as an important task for our state’s cross-century development, upholding the basic state policies of family planning and environmental protection, and correctly handling the relationship between economic development and population, resources, and the environment.

Under the active promotion of the Party and government, the implementation of the sustainable development strategy achieved major progress in a number of important areas. In 1996, the State Council issued a decision on several issues concerning environmental protection, vigorously advancing work to control total emissions of major pollutants, bring industrial pollution sources up to standard, and achieve environmental quality standards by functional zone in key cities; comprehensively launching water pollution prevention and control in the Huai River, Hai River, Liao River, and Taihu Lake, Dianchi Lake, and Chaohu Lake; and advancing air pollution prevention and control in acid rain control zones and sulfur dioxide pollution control zones. After the Fifteenth Party Congress, the State Council promulgated the National Ecological Environment Construction Plan and the Outline of China’s Nature Reserve Development Plan, and issued a series of regulations on banning the burning of crop stalks and promoting their comprehensive utilization, cracking down on the illegal hunting and trading of wildlife, and other matters. It launched comprehensive management of soil erosion, initiated projects for natural forest protection, returning farmland to forests (and grasslands), and controlling the sources of sandstorms affecting Beijing and Tianjin, and implemented a system of paid use of resources, year by year increasing the intensity of ecological and environmental protection.

In 1978, the Party Central Committee made a strategic decision to build large-scale protective forests in key areas of wind-sand damage and soil erosion in the northwest, north, and northeast, launching the Three-North Shelterbelt Forest Program. After unremitting efforts, the first phase of construction was successfully completed by 2001; the forest coverage rate in the “Three-North” region reached 10 percent, and a green Great Wall to block the southward advance of wind and sand was initially established. This project has been hailed as “the world’s greatest ecological project.” In the course of its construction, a number of advanced models in sand prevention, afforestation, and ecological improvement emerged, including Saihanba Forest Farm and Youyu County.

The Strategy of Large-Scale Development of the Western Region

Our state has a vast territory, with significant differences in natural environment and development conditions across different regions, and long-standing imbalances and lack of coordination in development. After the construction since the founding of New China, and especially since the beginning of reform and opening up, the western region had accumulated a considerable material and technological foundation. However, compared with the eastern region, its infrastructure in transportation, communications, and other areas was weak, its economic level had long lagged behind, and the development of culture, education, health, and other undertakings was markedly behind.

Gradually narrowing the development gap between regions, achieving coordinated economic and social development across the country, and ultimately realizing common prosperity for all the people are essential requirements of socialism and a major question bearing on the overall landscape of our state’s cross-century development. As early as September 1988, Deng Xiaoping had put forward the strategic concept of “two broader landscapes.” He pointed out: “The coastal areas must accelerate their opening up to the outside world, enabling this vast belt with a population of 200 million to develop more rapidly first, thereby driving better development in the interior—this is a question bearing on the broader landscape. The interior must take this broader landscape into account. Conversely, when development reaches a certain point, the coastal areas will be required to contribute more to help the interior develop—this too is a broader landscape. At that time, the coastal areas must also defer to this broader landscape.” In his 1992 Southern Tour talks, he further emphasized that when the moderately prosperous level is reached by the end of the 20th century, this question must be prominently raised and resolved.

In mid-to-late December 1995, during an inspection visit to Shaanxi and Gansu, Jiang Zemin began to think about and deliberate on the question of accelerating the development of the western region. He proposed that through strong state support and multi-faceted assistance from other regions, especially the more developed regions, efforts should be made to accelerate the pace of development in the western region. At that time, the most prominent and urgent problem facing the western region was the protection and management of the ecological environment. In August 1997, Jiang Zemin made an annotation on the Investigation Report on Controlling Soil Erosion and Building Ecological Agriculture in Northern Shaanxi, proposing that all should work together to vigorously plant trees and afforest, green the wastelands, build ecological agriculture, and recreate a northwest region of beautiful mountains and rivers. Subsequently, the State Council adopted a series of measures in the western region, including returning farmland to forests and grasslands and developing resettlement. The people of the broad western region, with support from all parts of the country, actively adjusted their agricultural production structure, planted trees and afforested on a large scale, and waged war against desertification.

At the turn of the century, our state’s composite national strength had grown significantly, economic structural adjustment was accelerating, the eastern region had accumulated a certain level of economic and social development strength, the conditions for the state to support the western region in accelerating development were basically in place, and the timing had matured. In September 1999, the Fourth Plenary Session of the Fifteenth Central Committee made the decision to implement the strategy of large-scale development of the western region, requiring that, through measures such as giving priority to infrastructure construction and increasing fiscal transfer payments, support be provided for the central and western regions and ethnic minority regions to accelerate development. In October 2000, the Fifth Plenary Session of the Fifteenth Central Committee made further deployments on this matter, and the implementation of the strategy of large-scale development of the western region was fully launched. Subsequently, the State Council issued a notice on several policy measures for implementing the development of the western region, specifying that the scope of applicable western development policies covers 12 provinces, autonomous regions, and municipalities directly under the central government: Sichuan, Yunnan, Guizhou, Tibet, Chongqing, Shaanxi, Gansu, Qinghai, Xinjiang, Ningxia, Inner Mongolia, and Guangxi. With State Council approval, the Xiangxi Tujia and Miao Autonomous Prefecture in Hunan Province, the Enshi Tujia and Miao Autonomous Prefecture in Hubei Province, and the Yanbian Korean Autonomous Prefecture in Jilin Province were given comparable treatment in practical work in accordance with the relevant policies and measures for western development. To support the large-scale development of the western region, the State Council formulated and issued specific policies on fiscal and taxation matters, finance, foreign investment and trade, attracting talent, and science, technology, and education; increased the intensity of fiscal transfer payments to the western region; and expanded the scale of public investment in the western region. A large number of key projects—including the Qinghai-Tibet Railway, the West-East Gas Transmission Pipeline, and the West-East Power Transmission Project—successively broke ground, the pace of infrastructure construction accelerated markedly, and the economic and social development of the western region was powerfully driven forward.

The implementation of the strategy of large-scale development of the western region is a major strategic decision made by the Party Central Committee with an eye to the overall landscape. It is of major and far-reaching significance for promoting coordinated development between the eastern and western regions and ultimately realizing common prosperity, for safeguarding ethnic unity, social stability, and national security, and for expanding the state’s strategic room for maneuver in development.

The “Bringing In” and “Going Out” Strategy

Since the beginning of reform and opening up, our state has achieved great results by actively introducing foreign capital and advanced technology and management experience to develop itself. The enhancement of our state’s economic strength and the accelerating development of economic globalization require us to boldly “go out” without missing the opportunity, making full use of both international and domestic resources and both markets. Only in this way can we make up for the shortfall in domestic resources and markets, bring technology, equipment, products, and services out into the world, give our state better conditions for introducing new technologies and developing new industries, and gradually form our own transnational corporations to better participate in economic globalization competition.

In July 1996, during an inspection visit to Tangshan, Hebei, Jiang Zemin proposed that urgent research was needed on how state-owned enterprises could “go out” in a focused and organized manner, and do a good job of utilizing international markets and overseas resources. In December 1997, when meeting with delegates to the National Conference on Foreign Capital Work, Jiang Zemin further explicitly proposed that “bringing in” and “going out” are two closely linked and mutually reinforcing aspects of our basic state policy of opening up to the outside world—neither can be dispensed with. This is a major strategy: both an important strategy for opening up to the outside world and an important strategy for economic development. In October 2000, the Fifth Plenary Session of the Fifteenth Central Committee proposed “implementing the ‘going out’ strategy, striving for new breakthroughs in utilizing both domestic and international resources and both markets.”

In accordance with this strategic deployment, our state’s opening up to the outside world developed from a previous emphasis on bringing in to a combination of “bringing in” and “going out.” A number of enterprises with strength and competitive advantages invested and established factories in Africa, Central Asia, the Middle East, Eastern Europe, South America, and other regions, actively participating in international cooperation; diverse forms of external economic cooperation business sustained stable growth. By the end of 2001, our state had cumulatively participated in 195 overseas resource cooperation projects with total investment of 4.6 billion US dollars; had cumulatively established 6,610 overseas enterprises of various types, with Chinese investment totaling 8.4 billion US dollars; and the average investment per overseas project reached 2.52 million US dollars, an increase of nearly 30 percent over the previous year. China National Petroleum Corporation, China Petrochemical Corporation, and other large backbone enterprises played a leading role in implementing overseas investment strategies and had initially taken on the embryonic form of transnational corporations.

The “bringing in” and “going out” strategy promoted the development of our state’s open economy, accelerated the integration of our state’s economy into the process of economic globalization, and expanded the space for our state’s economic development. This is yet another far-sighted strategic decision made by the Party Central Committee on the path of cross-century development of our state’s socialist cause.

V. Political Civilization, Advanced Culture Building, and the Achievement of Overall Moderate Prosperity in People’s Lives

Solid Advancement of Governing the Country According to Law and Political Civilization Building

Developing socialist democratic politics and building socialist political civilization are important goals of socialist modernization. The Fourteenth Party Congress proposed actively advancing political system reform so that socialist democracy and the rule of law would achieve relatively significant development. The Fifteenth Party Congress elevated governing the country according to law to the status of the basic strategy by which the Party leads the people in governing the state, proposing that under the leadership of the Party, on the basis of the people being the masters of the country, the country should be governed according to law, developing socialist democratic politics with Chinese characteristics and building a socialist law-based state.

To meet the needs of establishing the socialist market economic system, after the Fourteenth Party Congress, party committees and governments at all levels, in accordance with the principles of separating government from enterprise and streamlining, unifying, and improving efficiency, carried out sweeping reforms of the administrative management system and party and government institutions. After the Fifteenth Party Congress, the intensity of administrative system reform and transformation of government functions was further increased; reform focused on strengthening macro-economic regulation and control departments, adjusting and reducing specialized economic departments, and strengthening law enforcement and supervisory departments. Subsequently, further measures to deepen administrative reform were adopted, centered on transforming government functions, including reforming the administrative approval system and standardizing the bidding and tendering system.

After the Fourteenth Party Congress, the state’s legal system construction entered the “fast lane.” The socialist market economy is also a law-based economy. In March 1993, the First Session of the Eighth National People’s Congress incorporated “the state implements a socialist market economy” into the Constitution. Thereafter, the pace of legislation related to the socialist market economy accelerated markedly; in December of that year, the Fifth Session of the Standing Committee of the Eighth National People’s Congress adopted the Company Law of the People’s Republic of China. In February 1996, Jiang Zemin delivered a speech at a legal system lecture organized by the Party Central Committee, changing the previous formulation of “ruling the country by law” (以法治国) to “governing the country according to law” (依法治国), and pointing out that governing the country according to law is an important guideline for the Party and government in managing state and social affairs. In 1997, the Fifteenth Party Congress changed the goal of governing the country according to law from “building a socialist legal system state” (社会主义法制国家) to “building a socialist law-based state” (社会主义法治国家). The change from “legal system” (法制) to “rule of law” (法治), though a difference of only one character, carries a different substantive meaning. “Legal system” is merely one of the contents and forms of the rule of law, whereas “rule of law” is the mode and strategy of governance and administration. In this way, governing the country according to law was formally established as the basic strategy by which the Party leads the people in governing the state. To implement this basic strategy, the National People’s Congress and its Standing Committee made strengthening legislative work and improving legislative quality their primary task: they formulated the Legislation Law, amended the Marriage Law, and promulgated and implemented a number of laws for developing the socialist market economy, including the Securities Law and the Contract Law. To meet the needs of continuously expanding opening up to the outside world, especially accession to the World Trade Organization, they timely amended the Law on Chinese-Foreign Equity Joint Ventures, the Law on Chinese-Foreign Contractual Joint Ventures, the Law on Foreign-Capital Enterprises, and a number of laws and regulations related to intellectual property protection. In March 1999, the Second Session of the Ninth National People’s Congress incorporated “governing the country according to law and building a socialist law-based state” into the Constitution. This was an important achievement in the development of socialist democratic politics, marking the entry of our state’s socialist democratic and legal system construction into a new stage.

After the Fifteenth Party Congress, the Party Central Committee gradually established the organic unity of upholding party leadership, the people being masters of the country, and governing the country according to law as the basic principle of our state’s socialist democratic politics. Guided by this basic principle, the system of people’s congresses, the system of multi-party cooperation and political consultation under the leadership of the Chinese Communist Party, and the system of regional ethnic autonomy were further improved; the patriotic united front was further broadened; village self-governance in rural areas, resident self-governance in urban areas, workers’ representative congresses, and other forms of democratic management in enterprises and institutions continued to develop; and grassroots democracy building in urban and rural areas was progressively strengthened.

Strengthening ethnic affairs work and religious affairs work is an important component of socialist political construction. In August and September 1990, during an inspection visit to Xinjiang, Jiang Zemin proposed that the people of all ethnic groups should cultivate the thinking that the Han ethnic group cannot do without the ethnic minorities, the ethnic minorities cannot do without the Han ethnic group, and the various ethnic minorities cannot do without each other. The 1992 Central Ethnic Affairs Work Conference called for continuing to consolidate and develop socialist ethnic relations of equality, unity, mutual assistance, and common development and common prosperity. The 1993 National United Front Work Conference proposed comprehensively and correctly implementing the Party’s religious policies, strengthening the management of religious affairs according to law, and actively guiding religion to adapt to socialist society. In 1994, the Party Central Committee and the State Council convened the Third Tibet Work Forum, formulating a series of policy measures to accelerate Tibet’s development and maintain social stability, and making the major decision for central departments and 15 provinces and municipalities to provide paired assistance to Tibet, opening up a new situation of nationwide support for Tibet. Under the leadership and care of the Party Central Committee and with nationwide support, the broad cadres and masses of Tibet inherited and carried forward the “Old Tibet Spirit,” driving Tibet’s reform and opening up and modernization to achieve remarkable results. During this period, the Party and state strengthened resource development and infrastructure construction in ethnic minority regions, implemented the central fiscal transfer payment system, increased investment in ethnic minority education, implemented the action to enrich the border areas and the people, carried out paired assistance from coastal provinces and municipalities, and intensified poverty alleviation efforts in ethnic minority regions, powerfully promoting social stability and economic and cultural development in ethnic minority regions.

Steady Development of Spiritual Civilization and Advanced Culture Building

In the 1990s, the Party Central Committee upheld the guideline of “grasping both hands, and making both hands strong,” emphasizing that spiritual civilization lies in construction. It mobilized the full strength of the entire Party and society, continued to advance socialist spiritual civilization building, and vigorously developed socialist culture with Chinese characteristics, achieving new progress and accomplishments.

To further uphold the “two services” orientation of “serving the people and serving socialism,” implement the “double hundred” policy of “letting a hundred flowers bloom and a hundred schools of thought contend,” promote the main melody, and enrich socialist culture, beginning in 1991 the Central Propaganda Department organized and implemented the “Five One Project” award selection activities for spiritual civilization building,[2] encouraging cultural and artistic workers to go deep into life and among the masses, create outstanding works, and meet the spiritual and cultural needs of the broad masses. In March 1996, the Fourth Session of the Eighth National People’s Congress incorporated spiritual civilization building into the overall plan for national economic and social development, driving material civilization building and spiritual civilization building to promote each other and develop in a coordinated manner.

In October 1996, the Sixth Plenary Session of the Fourteenth Central Committee adopted the Resolution of the Central Committee of the Chinese Communist Party on Several Important Issues Concerning the Strengthening of Socialist Spiritual Civilization Building, emphasizing the need to arm people with scientific theory, guide people with correct public opinion, mold people with noble spirit, and inspire people with outstanding works; to cultivate socialist citizens with ideals, moral integrity, education, and discipline; and making deployments for socialist spiritual civilization building under the new situation. After the plenary session, mass spiritual civilization creation activities centered on creating civilized cities, civilized villages and towns, and civilized industries flourished across the country. Activities such as the Youth Volunteer Action and “Project Hope” received active responses from all sectors of society, promoting throughout society the virtues of the Chinese nation—helping others and assisting those in difficulty. The “Three Rural Activities” of bringing culture, science and technology, and health services to the countryside penetrated deep into rural areas, especially “old revolutionary base areas, ethnic minority areas, border areas, and poverty-stricken areas,” bringing spiritual and cultural enjoyment to rural masses while also providing them with information and technology for getting rich, health knowledge, and medical services.

Building a culture with Chinese characteristics was a new proposition put forward by the Fifteenth Party Congress. The Fifteenth Party Congress emphasized that, in terms of its main content, the culture with Chinese characteristics is consistent with socialist spiritual civilization; it is an important force for cohering and inspiring the people of all ethnic groups across the country, and an important marker of composite national strength. After the Fifteenth Party Congress, the state implemented a “masterpiece strategy” for cultural construction, vigorously developing public-interest cultural undertakings, and strengthening the construction of cultural infrastructure and major cultural projects. A number of outstanding works reflecting the spirit of the times and close to the people’s lives continued to emerge; the cultural life of the masses became increasingly rich and colorful; a healthy and civilized social atmosphere gradually thickened; and the socialist cultural front was continuously consolidated.

Strengthening socialist ideological and moral construction is an important content and central link in developing advanced culture. During this period, the Party Central Committee placed strengthening ideological and moral construction in an important position and put forward the important thinking of “governing the country with virtue.” In January 2001, Jiang Zemin explicitly stated at the National Conference of Propaganda Department Directors: “In the process of building socialism with Chinese characteristics and developing the socialist market economy, we must perseveringly strengthen socialist legal system construction and govern the country according to law; at the same time, we must also perseveringly strengthen socialist moral construction and govern the country with virtue. For the governance of a state, rule of law and rule of virtue have always been complementary and mutually reinforcing. Neither can be dispensed with, nor can either be neglected.” In September, the Central Committee of the Chinese Communist Party issued the Implementation Outline for Citizen Moral Construction, proposing that legal system construction and moral construction, governing the country according to law and governing the country with virtue, must be closely integrated to form and develop a socialist moral system. By vigorously advocating throughout society the basic moral norms of “patriotism and law-abidingness, propriety and integrity, unity and friendliness, diligence and self-improvement, and dedication to one’s work,” socialist moral construction was continuously deepened and expanded, and the moral quality of the broad cadres and people was continuously raised.

Completion of the Ninth Five-Year Plan and the Achievement of Overall Moderate Prosperity in People’s Lives

In the process of advancing the cause of socialism with Chinese characteristics into the 21st century, the Party united and led the people in steadfastly deepening reform and opening up and accelerating modernization, successfully meeting various severe risks and challenges, and achieving major accomplishments.

In the second half of 1997, a financial crisis erupted in Southeast Asian countries; our state’s total foreign trade imports and exports showed a declining trend, and economic construction encountered serious difficulties. Facing the impact of the financial crisis, the Party Central Committee clearly put forward the guiding policy of maintaining firm confidence, having a clear-eyed understanding of the situation, taking precautions before problems arise, responding calmly, working diligently, and maximizing benefits while minimizing harm. It resolutely adopted measures to expand domestic demand, implementing an active fiscal policy and a prudent monetary policy, increasing investment, and strengthening infrastructure construction; increasing livelihood guarantees for low- and middle-income earners and improving people’s lives; adopting measures such as raising export tax rebate rates and cracking down on smuggling to increase exports by every possible means, driving economic growth from multiple directions. These countermeasures and measures quickly proved effective. After 1997, our state’s economy sustained growth, and foreign trade exports also began to recover substantially in the second half of 1999. In a situation where many countries experienced economic recession and sharp currency depreciation, China honored its commitment to keep the renminbi from depreciating, playing a key stabilizing role in overcoming the Asian financial crisis, fully demonstrating the image of a responsible major power, and making a contribution to alleviating this globally impactful financial crisis.

In the summer of 1998, our state was struck by a historically rare and extraordinarily severe flood disaster. The Yangtze River, Nenjiang River, and Songhua River experienced record-breaking floods; the Xijiang River in the Pearl River basin and the Minjiang River in Fujian also experienced major floods at one point; and the affected population reached 230 million. At this critical moment, the Party Central Committee paid close attention to the safety of lives and the vital interests of people in the disaster areas, making resolute decisions and meticulous deployments. Party and state leaders personally went to the front lines of flood control to direct operations; more than 300,000 officers and soldiers of the People’s Liberation Army and the People’s Armed Police participated in the flood control struggle, using their flesh and blood to build an unyielding strong embankment; the people of the disaster areas sacrificed their individual families to protect the larger community, sacrificed local interests to protect the overall situation; and the people of the whole country gave strong support to the frontline soldiers and civilians, winning a comprehensive victory in the flood control and disaster relief struggle. In the battle against the floods, the Party and the people forged the great flood-fighting spirit of being of one heart and one mind, united in a common purpose, unafraid of difficulties, tenaciously fighting, persevering, and daring to win.

In the course of reform and opening up, under the influence of infiltration and subversion activities by external hostile forces, some erroneous tendencies and unhealthy phenomena periodically emerged domestically. In April 1999, in response to an incident in which a small number of people used “Falun Gong” to bewitch people and undermine social stability, the Party Central Committee led the people in resolutely and decisively conducting a major political struggle against the “Falun Gong” cult organization, promptly banning this cult organization according to law, mobilizing all sectors of society to expose and criticize the heretical doctrines of the “Falun Gong” cult, educating and transforming those who had been drawn in and deceived, and safeguarding social and political stability.

The victories in responding to the Asian financial crisis and a series of major struggles fully demonstrated the Party Central Committee’s capacity to command the overall landscape, respond to challenges, and withstand risks, and highlighted the superiority of our state’s socialist system. The Party and the people moved forward with even greater confidence.

In the course of meeting various difficulties, risks, and challenges, reform and opening up and modernization achieved new accomplishments. By 2000, the main tasks of the Ninth Five-Year Plan had been completed or exceeded: gross domestic product reached 9.9776 trillion yuan, with average annual growth of 8.6 percent; the target of quadrupling per capita gross national product from the 1980 baseline was achieved three years ahead of schedule in 1997; the output of major industrial and agricultural products ranked among the world’s top, and the situation of commodity shortages basically came to an end. Urban and rural residents’ incomes increased substantially and the quality of life improved significantly. All undertakings advanced comprehensively and composite national strength was further enhanced. During this period, the world-renowned Three Gorges Water Control Project on the Yangtze River successfully achieved the closure of the main river channel; major progress was made in the construction of a number of cross-century mega-projects, including the new western coal-to-east railway corridor and a ten-million-ton-class steel base; and the West-East Gas Transmission Pipeline project and the capacity expansion and renovation project of the Xining-to-Golmud section of the Qinghai-Tibet Railway were successively launched.

By 2000, our state had successfully completed the transition from a planned economic system to a socialist market economic system; the basic framework of the socialist market economic system was initially established; and the institutional environment for economic and social development underwent major changes.

The successful completion of the Ninth Five-Year Plan marked our state’s achievement of the second-step strategic target of socialist modernization, with the people’s standard of living reaching an overall moderately prosperous level, laying a good foundation for advancing toward the third-step strategic target. This is a great achievement of our state’s reform and opening up and the cause of socialist modernization, and a new milestone in the history of the development of the Chinese nation.

In October 2000, the Fifth Plenary Session of the Fifteenth Central Committee adopted the Proposals of the Central Committee of the Chinese Communist Party for Formulating the Tenth Five-Year Plan for National Economic and Social Development, charting a new blueprint for economic and social development.

VI. Actively Advancing the Revolution in Military Affairs with Chinese Characteristics

In the 1990s, facing the surging tide of the new revolution in military affairs worldwide, the Party Central Committee and the Central Military Commission put forward the overall requirements for military building in the new period—”politically qualified, militarily proficient, with an excellent conduct, strict discipline, and strong logistical support”—and, with an eye toward being able to win battles and not changing in nature, made a series of strategic plans and ★ On October 1, 1999, Jiang Zemin reviewed the People’s Liberation Army honor guard at the 50th anniversary celebration of the founding of the People’s Republic of China deliberated and adopted the Outline Plan for Military Building During the Ninth Five-Year Plan Period, explicitly putting forward the strategy of strengthening the military through science and technology and the strategic thinking of “two fundamental transformations”: in terms of military struggle preparedness, transforming from preparing to cope with local wars under ordinary conditions to preparing to win local wars under modern technological conditions, especially high-technology conditions; and in terms of military building, transforming from a quantitative-scale type to a quality-efficiency type, and from a labor-intensive type to a technology-intensive type. The expanded session of the Central Military Commission convened in December 2000 put forward the new thinking that our military’s building must accomplish the dual tasks of mechanization and informatization construction, and achieve leapfrog development.

and deployments, advancing the revolution in military affairs with Chinese characteristics.

The Gulf War that broke out in early 1991 displayed to the world an entirely new picture of warfare, with high-technology weapons and equipment becoming an important factor determining the outcome of war. In terms of military technology and the form of warfare, this was a turning point from mechanized warfare to informatized warfare, triggering a worldwide wave of military transformation. The Central Military Commission paid close attention to this; Jiang Zemin participated in three symposiums on the Gulf War, proposing the need to see clearly the changes in the international situation, study how future wars would be fought, make great efforts to develop defense science and technology, and have “trump cards” in weapons and equipment. In January 1993, the expanded session of the Central Military Commission formulated the military strategic guideline of active defense for the new period, making a major adjustment in strategic guidance, clarifying the goals and tasks of military struggle preparedness for the entire military under the new situation, and proposing that the baseline for military struggle preparedness be placed on winning local wars under modern technological conditions, especially high-technology conditions, endowing the military strategic guideline of active defense with new content. In December 1995, the expanded session of the Central Military Commission

To advance the revolution in military affairs with Chinese characteristics and follow the path of elite troops with Chinese characteristics, from the second half of 1992 to the end of 1994, the entire military underwent preliminary adjustment and streamlining of its organizational structure and establishment. In September 1997, the Fifteenth Party Congress announced that China, on the basis of having reduced military personnel by one million in the 1980s, would further reduce military personnel by 500,000 within three years. Through this adjustment and streamlining, the People’s Liberation Army took a step toward being combined-arms, smaller, lighter, and more diverse. To meet the needs of the revolution in military affairs with Chinese characteristics, the Party Central Committee and the Central Military Commission also made major adjustments and reforms to the military’s logistical support system, the military academy system, the active-duty soldier service system, and especially the non-commissioned officer system.

From the mid-1990s onward, on the basis of sustained rapid economic development, the state increased investment in national defense and military building. The various services and arms of the People’s Liberation Army earnestly implemented the guidelines of strengthening the military through science and technology and through quality, accelerating the development of defense science and technology and weapons and equipment, and achieved results of world-advanced level in aviation, aerospace, shipbuilding, ordnance, military electronics, and engineering physics, as well as major progress in microelectronics, information technology, sensing technology, and communications technology. In particular, breakthroughs in a number of cutting-edge weapons—including submarine-launched missiles and mobile strategic missiles—laid a new and important technological foundation for the modernization of our military’s weapons and equipment.

The People’s Liberation Army consistently upheld the fundamental principle and system of the Party’s absolute leadership over the military, placing ideological and political construction at the forefront of all construction. During this period, the Party Central Committee and the Central Military Commission revised, formulated, and implemented the Regulations on the Political Work of the People’s Liberation Army, the Decision on Several Issues Concerning Ideological and Political Construction of the Military Under Conditions of Reform and Opening Up and Development of the Socialist Market Economy, and other documents, continuously strengthening officers’ and soldiers’ consciousness of the military’s soul, always maintaining the strong revolutionary will and vigorous fighting spirit of the people’s army, and providing a strong guarantee for our military to complete all tasks with military struggle preparedness as the leading thread.

VII. The Return of Hong Kong and Macao to the Motherland and the Expansion of Cross-Strait Exchanges

The Triumphant Return of Hong Kong and Macao to the Motherland

After Hong Kong entered the transition period toward returning to the motherland, the early cooperation between the Chinese and British governments on resolving the Hong Kong question proceeded basically smoothly. After 1989, and especially after the dramatic changes in the Soviet Union and Eastern Europe, the British government erroneously assessed the situation, violated relevant provisions of the Sino-British Joint Declaration, and placed obstacle after obstacle in the way of Hong Kong’s smooth transition, obstructing and opposing the Chinese government’s resumption of the exercise of sovereignty over Hong Kong. In response, our Party and government conducted a tit-for-tat struggle that was principled, advantageous, and measured.

To ensure Hong Kong’s smooth transition and maintain Hong Kong’s long-term prosperity and stability, at the end of 1992 the Party Central Committee put forward the guideline of “taking the initiative ourselves, with two-pronged preparations.” Subsequently, the Chinese government pressed ahead with preparations for resuming the exercise of sovereignty over Hong Kong and with the relevant work of establishing the Hong Kong Special Administrative Region in accordance with the Basic Law of the Hong Kong Special Administrative Region. On December 11, 1996, the Selection Committee for the First Government of the Hong Kong Special Administrative Region elected Tung Chee-hwa as the candidate for the first Chief Executive of the Hong Kong Special Administrative Region by secret ballot. On December 16, the central government appointed Tung Chee-hwa as the first Chief Executive of the Hong Kong Special Administrative Region. At this point, all preparations for Hong Kong’s return to the motherland were basically in place.

▶ A Brief History of the Chinese Communist Party

★ On July 1, 1997, the Hong Kong handover ceremony was held at the Hong Kong Convention and Exhibition Centre

At midnight on June 30, 1997, the Hong Kong Convention and Exhibition Centre was ablaze with light as the world-watched handover ceremony between the Chinese and British governments was held there. At 11:59 PM on June 30, the British flag and the Hong Kong flag were slowly lowered, symbolizing the end of Britain’s century-and-a-half of colonial rule over Hong Kong. At midnight on July 1, the band struck up the national anthem of the People’s Republic of China, and the national flag of the People’s Republic of China and the regional flag of the Hong Kong Special Administrative Region of the People’s Republic of China rose slowly. President of the People’s Republic of China Jiang Zemin solemnly declared: the Chinese government resumes the exercise of sovereignty over Hong Kong.

Hong Kong, which had endured a century of vicissitudes, triumphantly returned to the embrace of the motherland, washing away a century of humiliation of the Chinese nation and completing an important step toward the complete reunification of the motherland. This is an achievement of enduring glory inscribed in the annals of the Chinese nation. The people of Hong Kong from that moment became the true masters of this land of the motherland, and Hong Kong from that moment set out on the broad road of developing together with the motherland, never to be separated again.

While the various preparations for Hong Kong’s return were proceeding intensively, the pace of Macao’s return was also accelerating. On May 15, 1999, the First ★ On December 20, 1999, the Macao handover ceremony was held at the Macao Cultural Centre closely. Facing the severe impact of the Asian financial crisis and the adverse influence of changes in the international economic environment, with the strong support of the central government, the Special Administrative Region governments responded calmly, people from all walks of life worked hand in hand, and a series of economic and social problems were properly handled, maintaining the economic and social stability and prosperity of Hong Kong and Macao. The facts fully demonstrate that “one country, two systems” is the best solution for resolving the historically inherited questions of Hong Kong and Macao, and also the best institutional arrangement for maintaining Hong Kong’s and Macao’s long-term prosperity and stability after their return.

Selection Committee for the Government of the Macao Special Administrative Region elected Edmund Ho Hau-wah as the candidate for the first Chief Executive of the Macao Special Administrative Region by secret ballot. On May 20, the central government appointed Edmund Ho Hau-wah as the first Chief Executive of the Macao Special Administrative Region.

At midnight on December 19 to the early hours of December 20, 1999, the Chinese and Portuguese governments held the Macao handover ceremony. President of the People’s Republic of China Jiang Zemin solemnly declared: the Chinese government resumes the exercise of sovereignty over Macao.

The fervent longing of the Macao compatriots to return to the embrace of the motherland—expressed and conveyed in the poem “Song of the Seven Sons” written by the renowned poet Wen Yiduo in 1925—became reality at this moment. The triumphant return of Macao is yet another monument erected by the Chinese people on the road to completing the great cause of national reunification.

After returning to the motherland, Hong Kong and Macao, as special administrative regions directly under the central government, were reintegrated into the state governance system. The central government governs Hong Kong and Macao in accordance with the Constitution and the Basic Laws of the special administrative regions, and the corresponding special administrative region systems and institutions were established. The ties between Hong Kong and Macao and the mainland of the motherland became increasingly

The Expansion of Cross-Strait Exchanges

With the development of the mainland of the motherland and through years of effort by compatriots on both sides of the strait, in October 1987 the Kuomintang authorities in Taiwan opened up family visits with restrictions. In November, the first group of Taiwan compatriots making family visits traveled to the mainland via Hong Kong. At this point, the state of cross-strait isolation that had lasted 38 years was broken, and personnel exchanges and economic and cultural exchanges between the two sides of the strait gradually unfolded.

On this basis, the Party Central Committee steadily advanced the development of cross-strait relations. In March 1992, the Association for Relations Across the Taiwan Straits and the Straits Exchange Foundation of Taiwan began conducting consultations on practical matters. In November, the two sides reached a consensus on how to express adherence to the one-China principle—namely, “both sides of the Taiwan Strait belong to one China and will jointly strive for national reunification”—which was later called the “1992 Consensus.” In April 1993, Wang Daohan, President of the Association for Relations Across the Taiwan Straits, and Koo Chen-fu, Chairman of the Straits Exchange Foundation, successfully held talks in Singapore and signed four agreements including the Joint Agreement of the Wang-Koo Talks, establishing an institutionalized mechanism for cross-strait liaison and consultation, marking an important step forward in cross-strait relations. In March 1994, the Sixth Session of the Standing Committee of the Eighth National People’s Congress adopted the Law of the People’s Republic of China on the Protection of the Rights and Interests of Taiwan Compatriots’ Investment, bringing the protection of Taiwan businesspeople’s investments onto a legal track and further promoting the development of cross-strait economic relations and the expansion of exchanges in other areas.

However, after Lee Teng-hui came to power as the leader of the Taiwan region, with the support and connivance of external anti-China forces such as the United States, he gradually abandoned the one-China principle, and “Taiwan independence” activities became increasingly rampant. The Party Central Committee scientifically analyzed the situation in Taiwan, concluding that it was necessary both to contain the “Taiwan independence” separatist forces and strike at their arrogance, and to conduct in-depth research on the application and development of the guideline of “peaceful reunification, one country, two systems” under the new situation. On January 30, 1995, on the occasion of the traditional Chinese festival of the Spring Festival, Jiang Zemin delivered the speech “Continue to Strive for the Completion of the Great Cause of National Reunification,” putting forward eight propositions for developing cross-strait relations and advancing the process of peaceful national reunification at the present stage. He emphasized: upholding the one-China principle is the foundation and prerequisite for achieving peaceful reunification. Our not committing to renouncing the use of force is absolutely not directed at Taiwan compatriots, but rather at foreign forces interfering in China’s reunification and at schemes for “Taiwan independence.” The speech both embodied the Chinese government’s steadfast resolve to complete the great cause of national reunification and gave full consideration to the wishes of Taiwan compatriots and the actual situation in Taiwan, attracting a high degree of attention and positive response at home and abroad.

However, Lee Teng-hui went further and further down the road of pursuing “Taiwan independence” and splitting the country. In June 1995, Lee Teng-hui visited the United States under the so-called pretext of a private visit, openly creating “two Chinas” in the international community. In July 1999, he put forward the so-called “two states theory.” After Chen Shui-bian, the leader of Taiwan’s Democratic Progressive Party, came to power in March 2000, he refused to accept the one-China principle and denied the “1992 Consensus.”

In response to the continuously intensifying “Taiwan independence” separatist activities by forces within Taiwan and hostile foreign forces, the Party Central Committee took resolute measures and conducted struggles from political, military, diplomatic, and public opinion fronts. From the second half of 1995 to the first half of 1996, the People’s Liberation Army conducted a series of large-scale military exercises in the Taiwan Strait and in sea areas near Taiwan, shaking the world and demonstrating the firm resolve of the Chinese government and the Chinese people to safeguard state sovereignty and territorial integrity, powerfully striking at the arrogance of “Taiwan independence” separatist forces and hostile foreign forces.

VIII. Driving the Construction of a New Pattern of All-Directional, Multi-Tiered External Relations

In the early 1990s, with the disintegration of the Soviet Union and the dramatic changes in Eastern Europe, the international landscape and situation presented a complex and tangled picture. The Party Central Committee consistently placed state sovereignty and security in the first position, actively responded to new changes in international relations and the influence and challenges of rapid techno-scientific development, clearly and forthrightly opposed hegemonism and power politics, safeguarded the interests of the broad developing countries, united all forces that could be united, promoted world peace and development, and drove the establishment of a just and rational new international political and economic order.

During this period, our state proposed to the international community the development of a new type of major-power relationship characterized primarily by non-alignment, non-confrontation, and non-targeting of third parties. In accordance with this principle, China established basic frameworks for developing bilateral relations oriented toward the 21st century with Russia, the United States, France, the United Kingdom, Japan, and the European Union, respectively. Advocating and working toward the development of a new type of major-power relationship was conducive to breaking the monopoly of the United States-led Western countries over international affairs, and demonstrated China’s sincerity, wisdom, and strength in driving the world toward multipolarity and international relations toward democratization.

After the disintegration of the Soviet Union, China and Russia re-established diplomatic relations. Through negotiations, the two sides resolved in a relatively satisfactory manner the border demarcation issues that had been left over from history for the vast majority of the boundary between the two countries. In April 1996, China and Russia announced the development of “an equal and trust-based strategic partnership of cooperation oriented toward the twenty-first century.”

In the 1990s, relations between China and the United States presented a complex picture of tortuous development. Because the United States consistently adopted a policy of so-called engagement plus containment toward China, with containment as the primary element, bilateral relations experienced several major setbacks. On May 8, 1999, NATO led by the United States bombed our embassy in the Federal Republic of Yugoslavia. On April 1, 2001, a US military aircraft provoked a confrontation in Chinese airspace over the South China Sea, resulting in a collision incident. Facing the barbaric acts of the United States in violating China’s sovereignty and the various provocations it stirred up in bilateral relations, China conducted a tit-for-tat struggle, safeguarding state sovereignty and national dignity.

Developing good-neighborly and friendly relations with surrounding countries and regions, maintaining peace and stability in the surrounding region, and promoting common development are among the important goals of our state’s diplomacy. During this period, our state made important progress in developing good-neighborly cooperative and friendly relations. From 1997 to 2002, the Joint Statement of the Summit Meeting between the People’s Republic of China and ASEAN Countries was issued; China proposed and drove the establishment of the “China-ASEAN Free Trade Area” and signed the Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN. In April 1996, the heads of state of China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan held a summit in Shanghai, formally establishing the “Shanghai Five” mechanism. Building on this foundation, in June 2001, China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan signed the Declaration on the Establishment of the Shanghai Cooperation Organisation. The Shanghai Cooperation Organisation is the first regional cooperative organization promoted and established with Chinese participation and named after a Chinese city.

★ Group photo at the Ninth APEC Economic Leaders’ Meeting, October 21, 2001 The “Shanghai Spirit” it advocates—”mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations, and pursuit of common development”—has exerted an important influence on contemporary international relations. After the establishment of the Shanghai Cooperation Organisation, member states strengthened exchanges and cooperation in security, economic, and cultural spheres, played an important role in opposing hegemonism and power politics and guarding against “color revolutions,” powerfully struck at and contained violent terrorist forces, ethnic separatist forces, and religious extremist forces, maintained overall regional stability, and promoted the economic and social development of member states.

While implementing the strategy of stabilizing the surrounding region, China strengthened friendly cooperative relations with developing countries in other regions. In October 2000, the “Forum on China-Africa Cooperation—Beijing 2000 Ministerial Conference” was held in Beijing, adopting the Beijing Declaration of the Forum on China-Africa Cooperation and the Programme for China-Africa Cooperation in Economic and Social Development. China’s relations with Latin American and Caribbean countries developed rapidly and in depth, and China established diplomatic relations with all countries in the South American region except Paraguay.

China participated with a more open posture in activities across all spheres of multilateral diplomacy. On September 7, 2000, at China’s initiative, the heads of state of the five permanent members of the UN Security Council—China, the United States, Russia, the United Kingdom, and France—attending the United Nations Millennium Summit held the first-ever summit meeting in UN history. In February 2001, the Boao Forum for Asia was established in Boao, Hainan. This was the first non-governmental international conference organization permanently headquartered in China; with equality, mutual benefit, cooperation, and win-win outcomes as its purpose, it became a bond for people from Asia and those who care about Asia from all walks of life to strengthen understanding, deepen friendship, and expand cooperation. In October, our state successfully hosted the Ninth APEC Economic Leaders’ Meeting in Shanghai, exerting a positive influence on promoting the recovery and development of the Asia-Pacific economy.

At the turn of the century, our state had established a new pattern of all-directional, multi-tiered external relations, becoming increasingly proactive in fierce international competition and struggle, with our international strategic space continuously expanding and our international influence significantly enhanced.

IX. Advancing the New Great Project of Party Building

Clarifying the Overall Goal of Party Building and the Two Major Historical Subjects

In the 1990s, the Party Central Committee scientifically analyzed the new situation facing its own construction, actively explored the goals, tasks, and pathways for strengthening party building under conditions of developing the socialist market economy, and adopted a series of major measures to strengthen and improve party building.

In September 1994, the Fourth Plenary Session of the Fourteenth Central Committee adopted the Decision of the Central Committee of the Chinese Communist Party on Several Major Issues Concerning the Strengthening of Party Building, elevating party building in the new period to the height of a “new great project,” and explicitly putting forward the overall goal of party building. The Fifteenth Party Congress further articulated this overall goal as: to build the Party into a Marxist party armed with Deng Xiaoping Theory, serving the people wholeheartedly, completely consolidated ideologically, politically, and organizationally, capable of withstanding various risks, always at the forefront of the times, and leading the entire people in building socialism with Chinese characteristics.

In response to the profound changes in the world situation, national conditions, and party conditions at the turn of the century, in January 2000, Jiang Zemin emphasized at the Fourth Plenary Session of the Fifteenth Central Commission for Discipline Inspection that governing the state requires first governing the Party, and governing the Party must be done strictly. When the Party is always governed strongly and effectively, the governance of the state will necessarily be correct and effective. He put forward in complete form the two major historical subjects of “improving the level of leadership and governance, and enhancing the capacity to resist corruption, prevent degeneration, and withstand risks,” calling on the entire Party to earnestly study and resolve these issues, so that the Party would be stronger and more vigorous, leading the people of all ethnic groups across the country to continue moving forward victoriously.

The putting forward of the overall goal of party building and the two major historical subjects elevated the Party’s understanding of the laws governing its own construction, enriched Marxist doctrine on party building, met the new requirements that developing the socialist market economy places on party building, and pointed the direction for strengthening and improving party building under the new historical conditions.

Comprehensively Strengthening Party Building and the Conduct of “Three Emphases” Education

In accordance with the requirements of the overall goal of party building, and revolving around the two major historical subjects, on the cross-century journey of development, the Party Central Committee closely integrated the practice of advancing reform and opening up and developing the socialist market economy, solidly advanced party building in all its aspects, and achieved new major progress.

During this period, the Party Central Committee persisted in arming the entire Party with Deng Xiaoping Theory and educating cadres and the people; treated ideological and political work as the lifeline of economic work and all other work, inheriting and carrying forward the Party’s fine traditions, and continuously innovating and improving in terms of content, form, methods, means, and mechanisms; in accordance with the principle of commanding the overall landscape and coordinating all parties, further strengthened and improved party leadership, both ensuring the leadership core role of party committees and giving full play to the roles of people’s congresses, governments, political consultative conferences, and people’s organizations; in accordance with the principle of “collective leadership, democratic centralism, individual deliberation, and decision by meeting,” further improved the deliberation and decision-making mechanisms within party committees, established and improved decision-making mechanisms combining leadership, experts, and the masses, and progressively improved the systems of scientific and democratic decision-making; attached great importance to cultivating and selecting outstanding young cadres and accelerating the pace of generational transition in leadership at all levels; formulated and implemented regulations and opinions on grassroots organization work in government agencies, universities, state-owned enterprises, rural areas, social organizations, non-public entities, and other spheres, guiding and driving the construction of party grassroots organizations in all fields. These measures significantly strengthened the Party’s own construction and guaranteed the healthy development of the reform and construction cause.

With the development of the socialist market economy, new social strata and new economic organizations and new social organizations emerged in our state. To adapt to the new situation, the Party Central Committee put forward in a timely manner the requirement to “strengthen the Party’s class foundation and expand the Party’s mass foundation,” accelerating the establishment of party organizations in new economic organizations and new social organizations, and continuously expanding the coverage of party work. Beginning in August 2001, pilot work for developing party members among new social strata was launched.

Strengthening the building of leadership bodies and improving the quality of leading cadres is the key to advancing the new great project of party building. In November 1995, during an inspection visit to Beijing, Jiang Zemin proposed that educating cadres, especially leading cadres, must be placed in a prominent position and treated as a key link, and put forward the requirement for leading cadres at all levels to “emphasize study, emphasize politics, and emphasize integrity.” Emphasizing study, emphasizing politics, and emphasizing integrity are closely interconnected and mutually unified; the core is emphasizing politics, and emphasizing politics requires study and must be manifested in emphasizing integrity. From November 1998 to the end of 2000, the entire Party conducted, in batches and phases among leadership bodies and leading cadres, party character and party conduct education with “emphasizing study, emphasizing politics, and emphasizing integrity” as its main content.

The “Three Emphases” education was a creative and exploratory practice under the new historical conditions for strengthening party building, especially the building of leadership bodies and the ideological and political construction of leading cadres. It was an enrichment and development of the Yan’an Rectification spirit and the Party’s “three great conduct traditions” in the new historical period. In the course of the “Three Emphases” education, the broad cadres genuinely took up the weapon of criticism and self-criticism, extensively listened to the opinions of the masses, identified problems in leadership work and in themselves, conducted active and healthy ideological struggle, and generally received a profound Marxist education and underwent rigorous tempering in inner-party political life.

In the new phase of reform and opening up, under the active promotion of party organizations at all levels, the broad party members and cadres consciously strengthened their party character cultivation, worked hard to improve their own quality, always stood at the forefront of the times, and a large number of outstanding Communists emerged, represented by Kong Fansen. Kong Fansen went to Tibet twice for work, spending a total of ten years there, devoting himself heart and soul, working selflessly, struggling arduously, and achieving outstanding results; he unfortunately died in the line of duty in 1994 and was hailed as “a model for leading cadres.” These outstanding Communists fully demonstrated the bearing of contemporary Communists and became the vanguard of the times in reform and opening up and modernization.

Advancing the Building of Party Conduct and Clean Governance and the Struggle Against Corruption

Under the new conditions of reform and opening up and developing the socialist market economy, the Party Central Committee consistently treated the building of party conduct and clean governance and the struggle against corruption as a major matter bearing on the life and death of the Party and the state. In August 1993, Jiang Zemin proposed at the Second Plenary Session of the Fourteenth Central Commission for Discipline Inspection that anti-corruption work should be approached from three aspects: first, leading cadres at all levels of the Party and government must take the lead in maintaining clean governance; second, concentrated efforts should be made to investigate and handle a number of major cases; and third, the prominent problems in one’s own locality, department, and unit must be firmly grasped to put a stop to the several unhealthy tendencies that the masses find most objectionable. Subsequently, the Party Central Committee and the State Council focused on three areas of work: supervising and inspecting the clean governance of leading cadres at all levels of the Party and government, concentrating efforts to investigate and handle major cases, and firmly stopping the unhealthy tendencies that the masses strongly complained about, gradually forming a three-pronged work pattern for anti-corruption efforts.

To strengthen anti-corruption and clean governance work, the Party Central Committee and the State Council further improved relevant institutions. In January 1993, the Central Commission for Discipline Inspection and the Ministry of Supervision began joint operations. In November 1995, the Supreme People’s Procuratorate’s General Bureau for Anti-Corruption and Bribery was established. During this period, the Party Central Committee formulated inner-party regulations including the Regulations on Disciplinary Punishments of the Chinese Communist Party (Trial), the Provisions on Implementing the Responsibility System for Building Party Conduct and Clean Governance, and the Several Guidelines on Clean Governance for Party Member Leading Cadres of the Chinese Communist Party (Trial). At the same time, regulations were established requiring county-division-level and above leading cadres in party and government organs to declare their income, requiring registration of gifts received by party and state organ workers in domestic official activities, and requiring that the use of business entertainment expenses by state-owned enterprises be reported to workers’ representative congresses. A code of conduct for clean governance by leading cadres was initially established, and a leadership system and working mechanism for anti-corruption efforts gradually took shape, with the party committee providing unified leadership, party and government jointly grasping the work, the discipline inspection commission organizing and coordinating, departments each bearing their respective responsibilities, and relying on the support and participation of the masses. To further advance the building of party conduct and clean governance, in September 2001, the Sixth Plenary Session of the Fifteenth Central Committee adopted the Decision of the Central Committee of the Chinese Communist Party on Strengthening and Improving the Building of Party Conduct, making comprehensive deployments for strengthening conduct building.

The Party Central Committee also resolutely decided that the military, the People’s Armed Police, and political and legal organs would no longer engage in commercial activities, and that party and government organs would sever ties with the commercial enterprises they had established; it implemented the system of separating revenue and expenditure, project bidding, and government procurement, striving to prevent and contain corruption at the source. Party committees, governments, and discipline inspection and supervision organs at all levels continuously intensified the struggle against corruption, strictly investigating and handling cases of violations of discipline and law. In particular, the investigation and handling of a number of major cases produced a significant deterrent effect and upheld the seriousness of party discipline and state law. The building of party conduct and clean governance and the struggle against corruption achieved phased results. However, some negative and corrupt phenomena within the Party continued to recur despite repeated prohibitions, and in some cases the situation even became increasingly serious. One important reason was that some party organizations to varying degrees exhibited problems of weakness and laxity, and of governing the Party without strictness, being remiss in educating, managing, and supervising party members and cadres, especially leading cadres, and being too lenient and too soft in implementing discipline and institutional rules. Practice has shown that the building of party conduct and clean governance and the struggle against corruption are both a battle of assault and a protracted war. Anti-corruption and clean governance work must be persistently maintained, and the alarm bell against corruption and degeneration must ring unceasingly.

The Putting Forward of the Important Thinking of the “Three Represents”

In the course of advancing the great cause of socialism with Chinese characteristics and the new great project of party building, the Chinese Communists with Jiang Zemin as their principal representative scientifically analyzed the domestic and international situation, the historical position of the Party, and the historical mission it shouldered; thought deeply about the new circumstances and new problems it faced; deepened their understanding of what socialism is and how to build it, and what kind of party to build and how to build it; and gradually put forward the important thinking of the “Three Represents.”

From February 21 to 25, 2000, during an inspection visit to Guangdong, Jiang Zemin explicitly put forward the “Three Represents” requirements. He pointed out: “The reason our Party has won the support of the people is that throughout the various historical periods of revolution, construction, and reform, our Party has always represented the development requirements of China’s advanced productive forces, always represented the forward direction of China’s advanced culture, and always represented the fundamental interests of the overwhelming majority of the Chinese people, and has worked tirelessly to realize the fundamental interests of the state and the people by formulating correct lines, guidelines, and policies.” On May 14, Jiang Zemin further pointed out at a symposium on party building work in Jiangsu, Zhejiang, and Shanghai that he convened in Shanghai: always doing the “Three Represents” is the foundation of our Party’s existence, the source of its governing strength, and the wellspring of its power.

On July 1, 2001, in a speech delivered at the meeting celebrating the 80th anniversary of the founding of the Chinese Communist Party, Jiang Zemin systematically expounded on the important thinking of the “Three Represents.” He pointed out that for our Party to always represent the development requirements of China’s advanced productive forces means that the Party’s theory, line, program, guidelines, policies, and all its work must strive to conform to the laws of productive force development, embody the requirements of continuously promoting the liberation and development of the social productive forces, especially the requirements of promoting the development of advanced productive forces, and continuously raise the living standards of the people through developing the productive forces. For our Party to always represent the forward direction of China’s advanced culture means that the Party’s theory, line, program, guidelines, policies, and all its work must strive to embody the requirements of developing a socialist culture that is national, scientific, and popular in character, oriented toward modernization, toward the world, and toward the future, continuously raising the ideological, moral, scientific, and cultural quality of the entire nation, and unceasingly providing spiritual motivation and intellectual support for our state’s economic development and social progress. For our Party to always represent the fundamental interests of the overwhelming majority of the Chinese people means that the Party’s theory, line, program, guidelines, policies, and all its work must uphold the fundamental interests of the people as the starting point and ultimate goal, give full play to the enthusiasm, initiative, and creativity of the people, and, on the basis of continuous social development and progress, enable the people to continuously obtain tangible economic, political, and cultural benefits.

The important thinking of the “Three Represents” is a basic summation of the historical experience of our Party in always maintaining its advanced nature. It both upholds the basic principles of Marxism and reflects the new requirements that the development and changes of the contemporary world and China place on the work of the Party and the state; and with new ideas, viewpoints, and propositions, it inherits, enriches, and develops Marxism-Leninism, Mao Zedong Thought, and Deng Xiaoping Theory. It is a powerful theoretical weapon for strengthening and improving party building and advancing the socialist self-improvement and development of our state. Its putting forward made important ideological and theoretical preparations for the convening of the Sixteenth Party Congress and for the entire Party to complete the sacred historical mission it bears in the 21st century, full of hope and challenges.

[1] On March 3, 1990, in a conversation with several responsible comrades of the Center, Deng Xiaoping pointed out that the reform and development of socialist agriculture in China, viewed from a long-term perspective, requires two leaps. The first leap is the abolition of the people’s communes and the implementation of the responsibility system centered on household contract management. This is a great step forward and must be upheld without change over the long term. The second leap is, in response to the needs of scientific farming and the socialization of production, to develop appropriately scaled management and develop the collective economy. This is yet another great step forward, though of course it is a very long process.

[1] 1990年3月3日，邓小平在同几位中央负责同志谈话时指出，中国社会主义农业的改革和发展，从长远的观点看，要有两个飞跃。第一个飞跃，是废除人民公社，实行家庭联产承包为主的责任制。这是一个很大的前进，要长期坚持不变。第二个飞跃，是适应科学种田和生产社会化的需要，发展适度规模经营，发展集体经济。这是又一个很大的前进，当然这是很长的过程。

[2] The “Five Ones” refer to one good book, one good stage production, one outstanding film, one outstanding television drama (or program), and one or several articles with original ideas and persuasive force. Beginning with the 1995 selection, one good song and one good radio drama were also added to the selection scope, while the name “Five One Project” remained unchanged.

[2] “五个一”是指一本好书、一台好戏、一部优秀影片、一部优秀电视剧（片）、一篇或几篇有创见有说服力的文章。从1995年度起，又将一首好歌和一部好广播剧列入评选范围，”五个一工程”的名称不变。

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