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 style 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 behavior 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!