Hold High the Great Banner of Socialism with Chinese Characteristics and Strive for New Victories in Building a Moderately Prosperous Society in all

Report to the Seventeenth National Congress of the Communist Party of China on Oct. 15, 2007

Hu Jintao

I. The Work of the Past Five Years

II. The Great Historical Course of Reform and Opening Up

III. Thoroughly Applying the Scientific Outlook on Development

IV. New Requirements for Attaining the Goal of Building a Moderately Prosperous Society in All Respects

V. Promoting Sound and Rapid Development of the National Economy

VI. Unswervingly Developing Socialist Democracy

VII. Promoting Vigorous Development and Prosperity of Socialist Culture

VIII. Accelerating Social Development with the Focus on Improving People's Livelihood

IX. Opening Up New Prospects for Modernization of National Defense and the Armed Forces

X. Carrying Forward the Practice of "One Country, Two Systems" and Advancing the Great Cause of Peaceful National Reunification

XI. Unswervingly Following the Path of Peaceful Development

XII. Comprehensively Carrying Forward the Great New Undertaking to Build the Party in a Spirit of Reform and Innovation

Comrades,

Now I would like to make a report to the Seventeenth National Congress of the Communist Party of China (CPC) on behalf of the Sixteenth Central Committee.

The Seventeenth Congress is one of vital importance being held at a crucial stage of China's reform and development. The theme of the congress is to hold high the great banner of socialism with Chinese characteristics, follow the guidance of Deng Xiaoping Theory and the important thought of Three Represents, thoroughly apply the Scientific Outlook on Development, continue to emancipate the mind, persist in reform and opening up, pursue development in a scientific way, promote social harmony, and strive for new victories in building a moderately prosperous society in all respects.

The great banner of socialism with Chinese characteristics is the banner guiding development and progress in contemporary China and rallying the whole Party and the people of all ethnic groups in the country in our common endeavor. Emancipating the mind is a magic instrument for developing socialism with Chinese characteristics, reform and opening up provide a strong driving force for developing it, and scientific development and social harmony are basic requirements for developing it. Building a moderately prosperous society in all respects is a goal for the Party and the state to reach by 2020, and represents the fundamental interests of the people of all ethnic groups.

The world today is undergoing extensive and profound changes, and contemporary China is going through a wide-ranging and deep-going transformation. This brings us unprecedented opportunities as well as unprecedented challenges, with the formeroutweighing the latter. The whole Party must unswervingly hold high the great banner of socialism with Chinese characteristics and lead the people in starting from this new historical point, grasping and making the most of the important period of strategic opportunities, staying realistic and pragmatic, forging ahead with determination, continuing to build a moderately prosperous society in all respects and accelerate socialist modernization, and accomplishing the lofty mission bestowed by the times.

I. The Work of the Past Five Years

The five years since the Sixteenth Congress was an extraordinary period. In order to accomplish the arduous tasks of reform and development in a complicated and volatile international situation, the Party led the people of all ethnic groups in holding high the great banner of Deng Xiaoping Theory and the important thought of Three Represents, overcoming difficulties and risks, creating a new situation in the cause of socialism with Chinese characteristics and attaining a new realm in adapting Marxism to conditions in China.

At its Sixteenth Congress the Party established the important thought of Three Represents as its guide and made the strategic decision to build a moderately prosperous society in all respects. In order to implement the guiding principles of the congress, the Central Committee convened seven plenary sessions, at which it made decisions on and arrangements for major issues of overall significance such as deepening institutional restructuring, improving the socialist market economy, strengthening the governance capability of the Party, drawing up the Eleventh Five-Year Plan (2006-10), and building a harmonious socialist society; and it formulated and applied the Scientific Outlook on Development and other major strategic thoughts. All this helped the Party and the state score great new achievements.

Economic strength increased substantially. The economy sustained steady and rapid growth. The GDP expanded by an annual average of over 10%. Economic performance improved significantly, national revenue rose markedly year by year, and prices were basically stable. Efforts to build a new socialist countryside yielded solid results, and development among regions became more balanced. The endeavor to make China an innovative nation registered good progress, with considerable improvement in the country's capacity for independent innovation. Notable achievements were scored in the construction of infrastructure including energy, transport and telecommunications facilities and other key projects. Manned spaceflights were successfully conducted. Fresh progress was registered in energy, resources, ecological and environmental conservation. The Tenth Five-Year Plan (2001-05) was fulfilled successfully and implementation of the eleventh is in smooth progress.

Major breakthroughs were made in reform and opening up. Comprehensive reforms in rural areas gradually deepened; agricultural tax, livestock tax and taxes on special agricultural products were rescinded throughout the country; and policies were constantly strengthened to support and benefit agriculture, rural areas and farmers. Significant headway was made in reform of the state assets management system, state-owned enterprises, banking, public finance, taxation, investment, pricing, and the system for managing science and technology. The non-public sector of the economy grew stronger. A sound market system was being put in place, macroeconomic regulation continued to improve, and transformation of government functions was accelerated. The total volume of imports and exports increased sharply. Solid steps were taken in implementing the "go global" strategy, and the open economy entered a new stage of development.

Living standards improved significantly. Both urban and rural incomes increased considerably, and most families had more property than before. The system of subsistence allowances for urban and rural residents was basically in place, guaranteeing basic living conditions for the poor. Residents improved their consumption patterns, had increasingly better food, clothing, housing, transport and other daily necessities, and enjoyed markedly improved public services.

Fresh progress was registered in improving democracy and the legal system. Political restructuring progressed steadily. Constant improvement was made in the system of people's congresses, the system of multiparty cooperation and political consultation under the leadership of the CPC and the system of regional ethnic autonomy. Primary-level democracy increased its vitality. The cause of human rights witnessed sound development. The patriotic united front grew stronger. A socialist law system with Chinese characteristics was basically in place. The rule of law was effectively implemented as a fundamental principle. Reform of the government administration system and the judicial system continued to deepen.

A new situation was created in cultural development. Efforts to establish the system of socialist core values made steady headway and marked achievements were scored in the Project to Study and Develop Marxist Theory. Extensive efforts were made to raise ideological and ethical standards and the whole of society became more culturally advanced. Cultural restructuring made important progress, cultural programs and the cultural industry developed rapidly, and the people enjoyed a richer cultural life. Fresh progress was made in public fitness programs and competitive sports.

Social development proceeded in an all-round way. Education of various kinds and at different levels developed rapidly. Free compulsory education was made available in all rural areas. More job opportunities were created. The social security system was strengthened. The battle against SARS came to a great victory. The public health system and basic medical care constantly improved, contributing to better health of the people. Social management improved step by step. Social stability was ensured and the people lived and worked in peace and contentment.

Historic achievements were scored in the development of national defense and the armed forces. The revolution in military affairs with Chinese characteristics was accelerated. The armed forces were reduced by 200,000 troops. Efforts were intensified in all respects to make the armed forces more revolutionary, modernized and standardized, which notably increased their capacity to accomplish their historical missions at this new stage in the new century.

Work related to Hong Kong, Macao and Taiwan affairs was intensified. Hong Kong and Macao maintained their prosperity and stability and developed closer economic partnership with the mainland. Political parties on both sides of the Taiwan Straits started communication, and cross-Straits visits as well as economic and cultural exchanges reached a new high. The Anti-Secession Law was enacted to resolutely safeguard China's sovereignty and territorial integrity.

Major progress was made in all-directional diplomacy. Pursuing an independent foreign policy of peace, China energetically carried out diplomatic activities, enhanced exchanges and cooperation with other countries in various fields and played a major constructive role in international affairs. This created a favorable international environment for building a moderately prosperous society in all respects.

The great new undertaking to build the Party made solid progress. Endeavors to strengthen the Party's governance capability and vanguard nature were intensified. Efforts to make theoretical innovations and arm Party members with the achievements proved successful. The campaign to educate Party members to preserve their vanguard nature yielded substantial results. Intra-Party democracy continued to expand. Major headway was made in strengthening the Party's leading bodies and the ranks of its cadres, and especially in educating and training cadres. Work in relation to talented personnel was strengthened. Efforts were stepped up to reform the cadre and personnel system and make innovations in the organizational system. Remarkable results were achieved in improving the Party's of work, upholding integrity and combating corruption.

While recognizing our achievements, we must be well aware that they still fall short of the expectations of the people and that there are still quite a few difficulties and problems on our way forward. The outstanding ones include the following: Our economic growth is realized at an excessively high cost of resources and the environment. There remains an imbalance in development between urban and rural areas, among regions, and between the economy and society. It has become more difficult to bring about a steady growth of agriculture and continued increase in farmers' incomes. There are still many problems affecting people's immediate interests in areas such as employment, social security, income distribution, education, public health, housing, work safety, administration of justice and public order; and some low-income people lead a rather difficult life. More efforts are needed to promote ideological and ethical progress. The governance capability of the Party falls somewhat short of the need to deal with the new situation and tasks. In-depth investigations and studies have yet to be conducted on some major practical issues related to reform, development and stability. Some primary Party organizations are weak and lax. A small number of Party cadres are not honest and upright, their formalism and bureaucratism are quite conspicuous, and extravagance, waste, corruption and other undesirable behavīor are still serious problems with them. We must pay close attention to these problems and continue our efforts to solve them.

To sum up, the past five years was a period in which substantial progress was made in reform, opening up and building a moderately prosperous society in all respects. During this period, China's overall strength grew considerably and the people enjoyed more tangible benefits. China's international standing and influence rose notably. The creativity, cohesion and combat effectiveness of the Party increased significantly, and the whole Party and the people of all ethnic groups became more united. Facts have proved that the major policy decisions made by the Central Committee at and since the Sixteenth Congress are perfectly correct.

Our achievements over the past five years are attributed to the concerted efforts of the whole Party and the people of all ethnic groups. On behalf of the Central Committee, I wish to express our heartfelt thanks to the people of all ethnic groups, the democratic parties, people's organizations and patriots from all walks of life, to our compatriots in the special administrative regions of Hong Kong and Macao and in Taiwan as well as overseas Chinese nationals, and to our foreign friends who care about and support China's modernization drive!

II. The Great Historical Course of Reform and Opening Up

We will soon be celebrating the 30th anniversary of the start of reform and opening up. In 1978, the Party held the historic Third Plenary Session of the Eleventh Central Committee, which ushered in the new historical period of reform and opening up. Since then, the Chinese Communists and the Chinese people have, in an indomitable enterprising spirit and with their spectacular practice of innovation, composed a new epic recounting the Chinese nation's ceaseless efforts to make progress and become stronger, and historic changes have taken place in the visages of the Chinese people, socialist China and the CPC.

Reform and opening up represent a great new revolution carried on by the people under the Party's leadership in a new era to release and develop the productive forces, modernize the country, bring prosperity to the Chinese people and achieve the great rejuvenation of the Chinese nation; to promote the self-improvement and development of China's socialist system, inject new vitality into socialism, and build and develop socialism with Chinese characteristics; and to improve the building of the Party as it leads contemporary China in development and progress, preserve and enhance its vanguard nature, and ensure that it is always in the forefront of the times.

We must never forget that the great cause of reform and opening up was conducted on a foundation laid by the Party's first generation of central collective leadership with Comrade Mao Zedong at its core, which founded Mao Zedong Thought, led the whole Party and the people of all ethnic groups in establishing the People's Republic and scoring great achievements in our socialist revolution and construction, and gained invaluable experience in its painstaking exploration for laws governing socialist construction. The victory in the new-democratic revolution and the establishment of the basic system of socialism provided the fundamental political prerequisite and institutional basis for every inch of development and progress in contemporary China.

We must never forget that the great cause of reform and opening up was initiated by the Party's second generation of central collective leadership with Comrade Deng Xiaoping at its core leading the whole Party and the people of all ethnic groups in the endeavor. In a precarious situation left by the "cultural revolution" (1966-76), the second generation of central collective leadership, persisting in emancipating the mind and seeking truth from facts and displaying immense political and theoretical courage, made a scientific appraisal of Comrade Mao Zedong and Mao Zedong Thought, thoroughly repudiated the erroneous theory and practice of "taking class struggle as the key link," and made the historic policy decision to shift the focus of the work of the Party and the state onto economic development and introduce reform and opening up. It established the basic line for the primary stage of socialism, sounded the clarion call of the times for taking our own road and building socialism with Chinese characteristics, founded Deng Xiaoping Theory, and led the whole Party and the people of all ethnic groups in striding forward on the great journey of reform and opening up.

We must never forget that the great cause of reform and opening up was carried on, developed and successfully carried into the 21st century by the Party's third generation of central collective leadership with Comrade Jiang Zemin at its core leading the whole Party and the people of all ethnic groups on this mission. From the Fourth Plenary Session of the Thirteenth Central Committee through the Sixteenth Congress, the third generation of central collective leadership, which took over the helm at a critical historical juncture, held high the great banner of Deng Xiaoping Theory, pressed ahead with reform and opening up and kept up with the times. Relying on the Party and the people, it stood the severe tests of political turbulences and economic risks at home and abroad, safeguarded socialism with Chinese characteristics, initiated the new, socialist market economy and ushered in a new phase of all-round opening up; and it advanced the great new undertaking to build the Party, founded the important thought of Three Represents, and steered the ship of reform and opening up forward on the right course.

Since the Sixteenth Congress, we have followed the guidance of Deng Xiaoping Theory and the important thought of Three Represents, kept up with new developments and changes in and outside China, grasped the strategic opportunities in this important period, promoted the truth-seeking, pragmatic and pioneering spirit and persisted in innovation in both theory and practice. We have worked hard to promote scientific development and social harmony, improved the socialist market economy, and resolutely carried forward the great cause of reform and opening up in building a moderately prosperous society in all respects.

Reform and opening up constitute the most salient feature of the new period. From the countryside to the cities and from the economic to other areas, the process of sweeping reform has unfolded with irresistible momentum. From the coastal areas to areas along the Yangtze River and the borders, and from the eastern to the central and western regions, the door has been resolutely opened to the outside world. This great undertaking of reform and opening up, never seen before in history, has greatly stimulated the enthusiasm of hundreds of millions of Chinese people and brought about China's historic transformation from a highly centralized planned economy to a robust socialist market economy, and from a closed or semi-closed state to all-round opening up. Today socialist China is standing rock-firm in the East, oriented toward modernization, the world and the future.

Rapid development represents the most remarkable achievement in the new period. The Party has been implementing the three-step strategy for modernization, leading the people in working hard to promote China's sustained rapid development at a rate rarely seen in the world. China's economy, once on the verge of collapse, has grown to rank as the fourth largest in the world, and its import and export volume, the third biggest. The Chinese people, once inadequately fed and clad, are leading a fairly comfortable life on the whole. The impoverished population in rural areas has dropped from more than 250 million to just over 20 million. The country's achievements in political, cultural and social development have captured world attention. China's development has not only enabled its people to move steadily toward prosperity and happiness, but also contributed substantially to the growth of the world economy and the progress of human civilization.

Keeping up with the times is the most prominent hallmark of the new period. Adhering to the Marxist ideological line, the Party has been constantly seeking answers to major theoretical and practical questions such as what socialism is and how to build it, what kind of party we must build and how to build it, and what kind of development China should achieve and how to achieve it. The Party has been constantly adapting Marxism to conditions in China, and adhering to and enriching its own basic theory, line, program and experience. Socialism and Marxism have shown great vitality on Chinese soil, brought more benefits to the people, and enabled the Chinese nation to catch up with the trend of the times in great strides and see the bright future of national rejuvenation.

Facts have incontrovertibly proved that the decision to begin reform and opening up is vital to the destiny of contemporary China, that reform and opening up are the only way of developing socialism with Chinese characteristics and rejuvenating the Chinese nation, that only socialism can save China and that only reform and opening up can develop China, socialism and Marxism.

As a great new revolution, reform and opening up are not to be plain sailing or be accomplished overnight. Essentially they accord with the aspirations of the Party membership and the people and keep up with the trend of the times. The orientation and path of reform and opening up are entirely correct, and their merits and achievements can never be negated. To stop or reverse reform and opening up would only lead to a blind alley.

In the historical course of reform and opening up, the Party has combined adhering to the basic tenets of Marxism with adapting it to Chinese conditions, upholding the Four Cardinal Principles with adhering to the reform and opening up policy, respecting the people's pioneering initiative with strengthening the Party's leadership, adhering to the basic system of socialism with developing the market economy, effecting changes in the economic base with promoting reform of the superstructure, developing the productive forces with improving the cultural and ethical quality of the whole nation, raising efficiency with promoting social equity, pursuing independent development with taking part in economic globalization, promoting reform and development with maintaining social stability, and advancing the great cause of socialism with Chinese characteristics with making progress in the great new undertaking to build the Party. In this course the Party has gained invaluable experience in eliminating poverty, accelerating modernization, and consolidating and developing socialism in a large developing country of over one billion people.

To sum up, the fundamental reason behind all our achievements and progress since the reform and opening up policy was introduced is that we have blazed a path of socialism with Chinese characteristics and established a system of theories of socialism with Chinese characteristics. Essentially, to hold high the great banner of socialism with Chinese characteristics means to keep to this path and uphold this system.

Taking the path of socialism with Chinese characteristics means we will, under the leadership of the CPC and in light of China's basic conditions, take economic development as the central task, adhere to the Four Cardinal Principles and persevere in reform and opening up, release and develop the productive forces, consolidate and improve the socialist system, develop the socialist market economy, socialist democracy, an advanced socialist culture and a harmonious socialist society, and make China a prosperous, strong, democratic, culturally advanced and harmonious modern socialist country. The main reason this path is completely correct and can lead China to development and progress is that we have adhered to the basic tenets of scientific socialism and in the meantime added to them distinct Chinese characteristics in light of China's conditions and the features of the times. In contemporary China, to stay true to socialism means to keep to the path of socialism with Chinese characteristics.

Theories of socialism with Chinese characteristics constitute a system of scientific theories including Deng Xiaoping Theory, the important thought of Three Represents, and the Scientific Outlook on Development and other major strategic thoughts. This system represents the Party's adherence to and development of Marxism-Leninism and Mao Zedong Thought and embodies the wisdom and hard work of several generations of Chinese Communists leading the people in carrying out tireless explorations and practices. It is the latest achievement in adapting Marxism to Chinese conditions, the Party's invaluable political and intellectual asset, and the common ideological foundation for the concerted endeavor of the people of all ethnic groups. It is an open system that keeps developing. Practices since the publication of the Communist Manifesto nearly 160 years ago have proved that only when Marxism is integrated with the conditions of a specific country, advances in step with the times and is tied to the destiny of the people can it demonstrate its strong vitality, creativity and appeal. In contemporary China, to stay true to Marxism means to adhere to the system of theories of socialism with Chinese characteristics.

There is no end to practice or innovation. All Party members must cherish the path of socialism with Chinese characteristics and the system of theories of socialism with Chinese characteristics, which the Party explored and created after going through all the hardships, keep to the path and uphold the system for a long time to come and constantly develop them. We must continue to emancipate our minds, seek truth from facts, keep up with the times, make bold changes and innovations, stay away from rigidity or stagnation, fear no risks, never be confused by any interference, broaden our path of socialism with Chinese characteristics, and ensure that the truth of Marxism of contemporary China shines even more brightly.

III. Thoroughly Applying the Scientific Outlook on Development

To continue to build a moderately prosperous society in all respects and develop socialism with Chinese characteristics at the new stage of development, we must follow the guidance of Deng Xiaoping Theory and the important thought of Three Represents and thoroughly apply the Scientific Outlook on Development.

The Scientific Outlook on Development is a continuation and development of the important thoughts on development advanced by the previous three generations of central collective leadership of the CPC and a concentrated expression of the Marxist world outlook and methodology with regard to development. It is a scientific theory that is in the same line as Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of Three Represents and keeps up with the times. It is an important guiding principle for China's economic and social development and a major strategic thought that we must uphold and apply in developing socialism with Chinese characteristics.

In light of the basic reality t hat China is in the primary stage of socialism, the Scientific Outlook on Development has been formulated to meet new requirements of development by analyzing China's own practice and drawing on the experience of other countries in development. At this new stage in the new century, China's development shows a series of new features which are mainly as follows: The economic strength has increased markedly, but the overall productivity remains low, the capacity for independent innovation is weak, and the longstanding structural problems and the extensive mode of growth are yet to be fundamentally addressed. The socialist market economy is basically in place, but there remain structural and institutional obstacles slowing down development, and further reform in difficult areas is confronted with deep-seated problems. A relatively comfortable standard of living has been achieved for the people as a whole, but the trend of a growing gap in income distribution has not been thoroughly reversed, there are still a considerable number of impoverished and low-income people in both urban and rural areas, and it has become more difficult to accommodate the interests of all sides. Efforts to balance development have yielded remarkable results, but the foundation of agriculture remains weak, the rural areas still lag behind in development, and we face an arduous task to narrow the urban-rural and interregional gaps in development and promote balanced economic and social development. Socialist democracy has continued to develop and we have made steady progress in implementing the rule of law as a fundamental principle, but efforts to improve democracy and the legal system fall somewhat short of the need to expand people's democracy and promote economic and social development, and political restructuring has to be deepened. Socialist culture is thriving as never before, but the people have growing cultural needs and have become more independent, selective, changeable and diverse in thinking, setting higher requirements for the development of an advanced socialist culture. Our society has become evidently more dynamic, but profound changes have taken place in the structure of society, in the way society is organized and in the pattern of social interests, and many new issues have emerged in social development and management. China is opening wider to the outside world, but international competition is becoming increasingly acute, pressure in the form of the economic and scientific dominance of developed countries will continue for a long time to come, both predictable and unpredictable risks are increasing, and the need to balance domestic development and opening to the outside world is greater than ever.

All this shows that through the unremitting efforts we have made since the founding of the People's Republic in 1949, particularly since the introduction of the reform and opening up policy, China has scored achievements in development that have captured world attention, and experienced far-reaching changes in the productive forces and the relations of production, as well as in the economic base and the superstructure. However, the basic reality that China is still in the primary stage of socialism and will remain so for a long time to come has not changed, nor has Chinese society's principal contradiction - the one between the ever-growing material and cultural needs of the people and the low level of social production. The current features of development in China are a concrete manifestation of that basic reality at this new stage in the new century. Stressing recognition of the basic reality is not meant to belittle ourselves, wallow in backwardness, or encourage unrealistic pursuit of quick results. Rather, such recognition will serve as the basis of our endeavor to advance reform and plan for development. We must always remain sober-minded, base our efforts on the most significant reality that China is in the primary stage of socialism, scientifically analyze the new opportunities and challenges arising from China's full involvement in economic globalization, fully understand the new situation and tasks in China's advance toward an industrialized, information-based, urbanized, market-oriented and internationalized country, have a good grasp of the new issues and problems we face in development, follow more conscientiously the path of scientific development, and strive to open up a broader vista for developing socialism with Chinese characteristics.

The Scientific Outlook on Development takes development as its essence, putting people first as its core, comprehensive, balanced and sustainable development as its basic requirement, and overall consideration as its fundamental approach.

- We must regard development as the top priority of the Party in governing and rejuvenating the country. Development is of decisive significance for building a moderately prosperous society in all respects and speeding up socialist modernization. We must firmly commit ourselves to the central task of economic development, concentrate on construction and development, and keep releasing and developing the productive forces. We must better implement the strategy of rejuvenating the country through science and education, the strategy of strengthening the nation with trained personnel and the strategy of sustainable development. We must grasp the law of development, make innovations in our thinking, transform the mode of development, crack hard issues and raise quality and efficiency to achieve sound and rapid development, so that we can lay a solid foundation for developing socialism with Chinese characteristics. We must strive for scientific development by putting people first and making it comprehensive, balanced and sustainable; we must strive for harmonious development by integrating all undertakings and promoting unity and amity among all members of society; and we must strive for peaceful development in the course of which China develops itself by safeguarding world peace and contributes to world peace by developing itself.

- We must always put people first. Serving the people wholeheartedly is the fundamental purpose of the Party, and its every endeavor is for the well-being of the people. We must always make sure that the aim and outcome of all the work of the Party and the state is to realize, safeguard and expand the fundamental interests of the overwhelming majority of the people. We must respect the principal position of the people in the country's political life, give play to their creativity, protect their rights and interests, take the path of prosperity for all and promote their all-round development, to ensure that development is for the people, by the people and with the people sharing in its fruits.

- We must pursue comprehensive, balanced and sustainable development. In accordance with the overall arrangements for the cause of socialism with Chinese characteristics, we will promote all-round economic, political, cultural and social development, coordinate all links and aspects of our modernization drive, and balance the relations of production with the productive forces and the superstructure with the economic base. We must adopt an enlightened approach to development that results in expanded production, a better life and sound ecological and environmental conditions, and build a resource-conserving and environment-friendly society that coordinates growth rate with the economic structure, quality and efficiency, and harmonizes economic growth with the population, resources and the environment, so that our people will live and work under sound ecological and environmental conditions and our economy and society will develop in a sustainable way.

- We must persist in overall consideration. We need to correctly understand and handle the major relationships in the cause of socialism with Chinese characteristics and balance urban and rural development, development among regions, economic and social development, relations between man and nature, and domestic development and opening to the outside world. We must take into overall consideration the relationships between the central and local authorities, between personal and collective interests, between interests of the part and those of the whole, and between immediate and long-term interests, so as to fully arouse the initiative of all sides. We must take both the domestic and international situations into consideration, develop a global and strategic perspective, be good at seizing opportunities for development and coping with risks and challenges in a changing world, and work for a favorable international environment. While planning our work from an overall perspective, we need to work hard to make breakthroughs on the key issues that affect the overall situation and on the major problems that affect public interests.

To thoroughly apply the Scientific Outlook on Development, we must always adhere to the Party's basic line of taking economic development as the central task and upholding the Four Cardinal Principles and the reform and opening up policy, known as "one central task and two basic points." As the lifeblood of the Party and the country, this basic line provides the political guarantee for scientific development. Taking economic development as the central task is vital to invigorating our nation and is the fundamental requirement for the robust growth and lasting stability of the Party and the nation. The Four Cardinal Principles are the very foundation for building our country and the political cornerstone for the survival and development of the Party and the nation. Reform and opening up are the path to a stronger China and the source of vitality for the Party and the nation in development and progress. We will continue to apply the line of "one central task and two basic points" in its entirety in our great endeavor to develop socialism with Chinese characteristics; we will never deviate from this line.

To thoroughly apply the Scientific Outlook on Development, we must work energetically to build a harmonious socialist society. Social harmony is an essential attribute of socialism with Chinese characteristics. Scientific development and social harmony are integral to each other and neither is possible without the other. Building a harmonious socialist society is a historical mission throughout the cause of socialism with Chinese characteristics, as well as a historical process and the social outcome of correctly handling various social problems on the basis of development. It is through development that we will increase the material wealth of society and constantly improve people's lives, and it is again through development that we will guarantee social equity and justice and constantly promote social harmony. To realize social equity and justice is the Chinese Communists' consistent position and a major task of developing socialism with Chinese characteristics. In accordance with the general requirements for democracy and the rule of law, equity and justice, honesty and fraternity, vigor and vitality, stability and order, and harmony between man and nature and the principle of all the people building and sharing a harmonious socialist society, we will spare no effort to solve the most specific problems of the utmost and immediate concern to the people and strive to create a situation in which all people do their best, find their proper places in society and live together in harmony, so as to provide a favorable social environment for development.

To thoroughly apply the Scientific Outlook on Development, we must continue to deepen reform and opening up. We need to incorporate the spirit of reform and innovation into all links of governance, unswervingly adhere to the orientation of reform, and have more scientific decision-making and better coordinated measures for reform. We will improve the socialist market economy, promote institutional reform and innovation in various sectors, accelerate reform in important fields and crucial links, improve opening up in all respects and make our systems and mechanisms full of vigor, highly efficient, more open and conducive to scientific development, so as to provide a powerful driving force and an institutional guarantee for developing socialism with Chinese characteristics. We will always take improving people's lives as a pivotal task in balancing reform, development and stability and ensure that our reform always has the endorsement and support of the people.

To thoroughly apply the Scientific Outlook on Development, we must strengthen our efforts to build the Party in earnest. As is required by the Party's lofty mission of governing and rejuvenating the nation, our efforts to improve the Party's governance capability and maintain and develop its vanguard nature must serve our task of directing scientific development, promoting social harmony, guiding development and progress in China and better representing and realizing the fundamental interests of the overwhelming majority of the people. In this way, the Party's work and our efforts to build the Party will better meet the requirement of the Scientific Outlook on Development and provide a reliable political and organizational guarantee for scientific development.

All Party members must fully understand the content and grasp the essence of the Scientific Outlook on Development, be more conscious and determined in applying it, change notions that are not in line with it, work hard to solve major problems that affect or constrain scientific development, direct the whole society's enthusiasm for development to scientific development, and apply this outlook to every aspect of economic and social development.

IV. New Requirements for Attaining the Goal of Building a Moderately Prosperous Society in All Respects

We have made steady progress toward the goal of building a moderately prosperous society in all respects set at the Sixteenth Congress, and we will continue to work hard to ensure its attainment by 2020.

In keeping with changes in domestic and international situations and in light of the expectations of the people of all ethnic groups for a better life, we must follow the trend and laws of economic and social development, uphold the basic program consisting of the basic objectives and policies for economic, political, cultural and social development under socialism with Chinese characteristics, and set new and higher requirements for China's development on the basis of the goal of building a moderately prosperous society in all respects set at the Sixteenth Congress.

- Promote balanced development to ensure sound and rapid economic growth. The development pattern will be significantly transformed. We will quadruple the per capita GDP of the year 2000 by 2020 through optimizing the economic structure and improving economic returns while reducing consumption of resources and protecting the environment. The socialist market economy will be improved. We will greatly enhance our capacity for independent innovation, enabling scientific and technological advancement to contribute much more to economic growth and making China an innovative country. The ratio of consumption to GDP will increase steadily, and consumption, investment and export will be coordinated to boost economic growth. A mechanism for urban and rural areas and for different regions to have balanced and interactive development and a layout of development priority zones will be basically in place. Efforts to build a new socialist countryside will make significant headway. The proportion of urban residents will notably increase.

- Expand socialist democracy and better safeguard the people's rights and interests as well as social equity and justice. Citizens' participation in political affairs will expand in an orderly way. The rule of law will be carried out more thoroughly as a fundamental principle, public awareness of law will be further enhanced, and fresh progress will be made in government administration based on the rule of law. Primary-level democracy will be improved. The government will markedly enhance its capability of providing basic public services.

- Promote cultural development and notably enhance the cultural and ethical quality of the whole nation. Socialist core values will prevail among the people, and fine ideological and ethical trends will be encouraged. A basic system of public cultural services will cover the whole society, the cultural industry will account for much more of the national economy and become more competitive internationally, and a more abundant supply of cultural products will be available to meet the people's needs.

- Accelerate the development of social programs and improve every aspect of the people's well-being. The modern system of national education will be further improved, a basic system for lifelong education will be in place, the educational attainment of the whole nation will rise to a much higher level, and the training of innovative personnel will be improved markedly. Employment will be further expanded. A basic system of social security will cover both urban and rural residents so that everyone is assured of basic living standards. A reasonable and orderly pattern of income distribution will be basically in place, with middle-income people making up the majority and absolute poverty basically eliminated. Everyone will have access to basic medical and health services. The system of social management will be further improved.

- Promote a conservation culture by basically forming an energy- and resource-efficient and environment-friendly structure of industries, pattern of growth and mode of consumption. We will have a large-scale circular economy and considerably increase the proportion of renewable energy sources in total energy consumption. The discharge of major pollutants will be brought under effective control and the ecological and environmental quality will improve notably. Awareness of conservation will be firmly established in the whole of society.

When the goal of building a moderately prosperous society in all respects is attained by 2020, China, a large developing socialist country with an ancient civilization, will have basically accomplished industrialization, with its overall strength significantly increased and its domestic market ranking as one of the largest in the world. It will be a country whose people are better off and enjoy markedly improved quality of life and a good environment. Its citizens will have more extensive democratic rights, show higher ethical standards and look forward to greater cultural achievements. China will have better institutions in all areas and Chinese society will have greater vitality coupled with stability and unity. The country will be still more open and friendly to the outside world and make greater contributions to human civilization.