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DECISION OF THE CENTRAL COMMITTEE OF THE COMMUNIST PARTY OF CHINA AND THE STATE COUNCIL ON ACCELERATING DEVELOPMENT OF TERTIARY INDUSTRY

    With a view to taking advantage of the present opportunity, speeding up
steps of reform and opening up, concentrating efforts to facilitate
economic construction and in accordance with the Ten-Year Programme and Eighth
Five-Year Plan on National Economic Development and Social Progress, the
tertiary industry should be developed comprehensively and swiftly.
I. Accelerating Development of the Tertiary Industry is of Great Strategic
Significance

    1. Speedy development of the tertiary industry is the necessary result of
the growth of productivity and social progress. The situation of the tertiary
industry is an important indicator by which economic development is
measured in a modern society. The tertiary industry of our country suffers
slow and backward development which falls short of demands of national
economic development. The law of economic development observed in many
countries indicates that when an economy is developed to certain level,
the tertiary industry normally enjoys more speedy development than the first
and secondary industries and obviously plays a role of impetus to the overall
growth of national economy. Our country has just entered that stage. With a
view to smoothly realizing the gigantic objectives of socialist modernization,
we must catch up with the opportunity and promote development of the tertiary
industry to a new level.

    2. Acceleration of the development of the tertiary industry can facilitate
the forthcoming of a fully developed market, improve socialization and
standardization of service industry, strengthen social security and be
beneficial to smooth implementation of a series of reforms in respect to
labour, wage, price, operational mechanism in enterprises and the
circulation system, and be beneficial to further opening up, attraction of
larger foreign investment, institutional simplification, efficiency growth
and to gradual change of the undesirable status quo that government
agencies, institutions and enterprises take on what ought to be done by
the society. Consequently the tertiary industrial development can create
better conditions for development of reform and opening up in a broader and
in-depth area.

    3. Our country suffers low industrial economic efficiency, low
commercialization of agricultural products, retarded circulation and
financial difficulties which has severely impeded further development of
the national economy. One of the important reasons for which those problems
arise is the ill structure of the whole economy, which can be indicated by
the fact that the tertiary industry falls short of demands of the first and
secondary industries. Even low investment in the tertiary industry can
create immediate efficiency and good social effect. To quicken development of
the tertiary industry can, on one hand, readjust ratio of three
industries and optimize the overall structure of national economy and, on the
other hand, effectively alleviate in-depth structural contradictions of the
economic life and promote faster economic growth.

    4. The 1990s sees large number of new grown-up labour and those labour
that are removed from the first and secondary industries waiting for
reemployment. The tertiary industry has particular advantages in recruitment
of labour; variety of trades and occupations; co-existence of labour;
technology and knowledge concentrated professions which can recruit large
number of various personnel of different levels, especially large number of
technological and specialized talents. To accelerate development of the
tertiary industry is a major solution to alleviation of employment pressure
which is becoming more and more serious in our country.

    5. Towards the end of this century our people's lives will become fairly
better off. Compared with the living standard of sufficient food and
clothing, the level of well-to-do livelihood does not only mean certain
standards of income already satisfied, but more importantly it should be
measured in terms of commercialization of services and living quality of
residents. Along with economic development and increase of income, the
people are asking for more and higher demands not only upon material life in
respect to clothing, food, housing, transportation, communication, hygiene and
living environment, but also upon cultural life in respect to cultural
entertainment, broadcasting, movies and TV programmes, publications, physical
training and recuperation, and tourism. Only when the tertiary industry is
quickly developed could the ever increasing material and cultural demands of
the people be satisfied and the construction of the socialist material and
cultural, ethical civilization be advanced.
II. The Goal and Key Areas of the Tertiary Industry to be Quickly
Developed

    6. In the light of national circumstances, we have categorized national
economy into three productive industries with agriculture being the first
productive industry, manufacture and construction the secondary industry
and all trades other than the abovementioned being categorized as the
tertiary industry including circulation departments, departments that
serve production and livelihood and departments that provide services for
improvement of science and culture awareness and quality of citizens.

    7. The goal of accelerating the tertiary industry development is to
gradually establish, in about ten years or longer times, an integrated
socialist market system, a comprehensive socialized service system in both
cities and countryside and a social security system, all of which are adapted
to circumstances of our country. In 1990s, development of the tertiary
industry should enjoy higher speed than before along with development of the
first and secondary industries so that the overall national economy could be
brought to a new stage every couple of years. For this purpose, the tertiary
industry should enjoy development at higher speed than the first and secondary
industries. The proportion of the tertiary industry value to GNP and the
proportion of the employment in the tertiary industry to the total social
labour should be brought up to or nearly to the average level of that
proportion in developing countries.

    8. Key areas of the tertiary industry to be developed at high speed are
specified as the following:

    --- Firstly, trades which require small investment but generate immediate
result and high efficiency, have large capacity of labour recruitment and
direct relevance to economic development and people's livelihood. Such trades
mainly refer to those in commerce, goods and materials, external trade,
banking, insurance, tourism, real estate, storehousing, neighborhood services,
catering, entertainment, hygiene, etc.;

    --- Secondly, those newly developed trades related to scientific and
technological progress, which mainly consist of consultancy (including
consultancy in science and technology, law, accounting and auditing, etc.),
information and various technical services, etc.;

    --- Thirdly, the tertiary industry in countryside, which mainly refer to
those trades that provide services before, during and after harvest or offer
services for improvement of farmers quality and living standards;

    --- Fourthly, those basic trades that have comprehensive influence upon
and guiding significance for development of national economy, including
communication and transportation, posts and telecommunications, scientific
research, education and other public undertakings, etc..
III. Main Policies and Measures for Development of the Tertiary Industry

    9. All positive factors including the state, collectives and individuals
should be fully mobilized. Economic collectives, private-run enterprises
and individuals in both cities and countryside should be given free rein to
develop those trades which are small in investment, quick in result,
concentrated with labour and directly serve production and livelihood. The
trades that have comprehensive influence upon and guiding significance
to national economic development should be mainly run by the state, but
competition should be introduced so that under uniform planning and
management localities, departments and economic collectives could also be
mobilized to establish such trades. The acceleration of the tertiary industry
development should principally depend on social forces subject to the
principle of "whoever invest will hold the ownership and be the beneficiary".
The state should not be dependent upon too much for investment.

    10. Acceleration of steps for development of the tertiary industry should
depend upon deepening reform and further opening up. Reforms and trials in
different forms should be conducted actively. Overseas funds, technologies
and marketing channels should be utilized boldly. Multiple approaches and
methods such as issue of stocks and bonds should be adopted to collect
funds. The form of business groups should be promoted actively so that
limits of departmental, regional or trade ownership could be broken through
and national and regional enterprise groups in the tertiary industry could
be established to the benefit of accelerated development of the tertiary
industry. All practices that are proved by reality to be effective should
be spread as soon as possible. Those that do not bring forth obvious
result should be tried continuously. Those practices that are proved really
unsuccessful should be changed to other forms.

    11. A vital self-development mechanism oriented to industrialization
should be established for the tertiary industry progress. Most of the tertiary
industry organizations should be transformed to business entities or
operated in business manner and try to be independent in operation and
responsible for both wins and losses. Most of the present tertiary industry
organizations which are charity like or public welfare or public undertaking
like should be gradually transformed into business entities under corporate
management.

    12. Where conditions permit, present information, consultancy
institutions and internal service installments and transport vehicles
attached to state organs or enterprises and public institutions should, to
the direction of socialization, be open, in an active manner, to the society
for paid services subject to confidential and safety requirements. Conditions
should be created to make those institutions to be divorced from their
original units, to be independent in operation and accounting. At the same
time social service organizations should be encouraged to contract rear
services, management of retired personnel and other routine work of state
organs, enterprises and public institutions. The close self-service systems
which are often " big and complete" or "small but complete" should be broken.
Abovementioned services should be socialized gradually.

    13. Enterprises of the tertiary industry should be encouraged to attempt
transdepartmental, transregional or conglomerate merger of other industrial
enterprises that should be closed, suspended, merged or changed in line of
production, and should be rendered preferential support in terms of assets
transfer, liability settlement, credit and taxation. This should be an
important measure for readjustment of industrial structure.

    14. Part of administrative personnel should be actively encouraged to be
separated from administration and to enter trades of services. Those people
that have been separated should be divorced from the administrations. Those
trades that serve production and people's lives should be developed
vigorously and should recruit as many personnel separated from
administration as possible so that conditions could be created for smooth
progressing of government organizational reform and staff reduction.

    15. To advance reform in labour and personnel system, the tertiary
industry enterprises should be offered discretion with labour employment. The
practice of discharge and resignation should be institutionalized gradually
so as to realize mutual selection in employment. Those institutions that
are operated in business manner and no longer need financial allocation
should be given freedom in recruitment of personnel and independence in
determination of staff size. Those institutions that only partially
depend upon financial allocation should be given more freedom in expansion
of staff size. Surplus labour with industrial enterprises, especially those
skilled personnel, should be encouraged to move to the tertiary industry.
Graduates from colleges and training schools and armymen to be transferred to
civilian work should be encouraged to work in units of the tertiary industry.

    16. Price system should be reformed according to the law of value so that
the long standing problem of insufficient value compensation for the
tertiary industry could be solved. Except for a few items for which it is
really necessary for the state to set the prices and fee collection
standards, most of the prices and service fee standards in the tertiary
industry should be open, subject to floating prices, negotiated prices and
self-quoted prices so that a reasonable price parity could be established.

    17. International business should be encouraged. Some large and medium
sized state-run commercial and materials enterprises should be authorized
with the power to import and export business. Where condition permits
external business development should be promoted energetically and active
efforts should be made to establish China-run enterprises overseas. Subject
to approval, large and medium-sized state-run external enterprises can be
authorized the right to enter domestic market so that business could be
operated in a uniform manner within both domestic and global markets.
Procedures regarding examination and approval of overseas business
development should be further simplified.

    18. Banking, taxation and other economic measures should be adopted for
development of the tertiary industry. Demand for loans by key trades should be
satisfied through arrangements under credit planning. Banks and both city and
township credit cooperatives can issue small loans, for maintenance of
fixed assets and simple equipment, to those collective and private
enterprises, individual industrial and commercial households who have good
efficiency and repayable capacity. When it is really necessary, taxation
upon newly established tertiary industry enterprises may, according to
industrial policies, be delayed or deducted over certain period of time.

    19. Procedures regarding examination and approval should be simplified
so as to alleviate business opening difficulties with establishments of the
tertiary industry. Business autonomy of the tertiary industry enterprises
should be set free. Such enterprises should be permitted to adopt more
flexible operations and expand business scope while their administration
and supervision should be strengthened effectively.

    20. Legal systems governing the tertiary industry should be strengthened.
Relevant laws and regulations regarding corporate and market behavious should
be formulate more speedily. Enterprises should operate according to law
while administrative authorities and economic superintendent departments
should exercise administration and supervision according to law so that the
tertiary industry could enjoy healthy development in a legal approach.

    21. Planning and administration of the tertiary industry should be
strengthened. Different regions have different economic structure and
development level. Their tertiary industry development should also be
different in development focus and speed. Development focus should be
determined in the light of local circumstances and in accordance with state
industrial policies. Investment, credit, employment and land use in the
interest of the tertiary industry should be placed under the overall
development planning and general arrangements of cities and townships. All
regions and departments should formulate programmes for implementation of
the present Decision and revise at the soonest possible time those policies
or regulations that run counter to the present Decision.

    The Party Central Committee and the State Council call for close
attention of the whole party and governments at different levels to the
development of the tertiary industry. All party and government officials
at different levels should unify ideology, renew conception, broaden
thinking, give play to creativity and mobilize the cadres and the people to
work strenuously for realization of the important strategic tasks of the
tertiary industry development.