The 11th Five Year Programme-Part Three (3)

VIII. Scientific innovation and human resources development

In light of the state principles of "abide by self-reliant innovation, highlight projects of priority, support development, and keep an eye on the future," innovative strategies centering on enterprises in Zhongguancun Science and Technology Park have to be implemented in the capital, taking key fields and technologies as the stepping stone to improve innovation capabilities and overall competitiveness of industries, build the commanding point of knowledge innovation and the reservoir of technological innovation in the nation, and form a Beijing-based innovation system radiating around the whole country, so that by the year 2010, Beijing will be in the form of a city of innovation.

Column X: Independent Innovation and an innovation-oriented city

Independent innovation poses a contrast to such concepts as copy and impact. By independent innovation, we mean independent innovative activities on the purpose of obtaining independent intellectual property rights and core technologies, including primitive innovation, innovation by integrated knowledge and innovation through digestion and absorption of other knowledge.

Against the backdrop of economic globalization, the capability and level of independent innovation have become an increasingly important factor to affect a nation? s ability to participate in international competition. It is China? s national strategy to enhance the state? s independent innovative capability.

The innovation-oriented city means a city that is driven by such innovative factors as science, technology, knowledge, human resources, culture and systems. The city is able to help backward areas in its surrounding areas after it has made great headway. Beijing aims to play a leading role in the nation? s independent innovative development and a pivotal point to connect the world? s innovation network by centering on high-end innovation, powerful radiation, industrial upgrading and environment improvement, so as to develop into an innovation-oriented city at the primary stage in 2010 and into a well-developed innovation city by the year 2020.

(I)Build a command point of innovation in Zhongguancun.

According to the function definition?aone district and three bases?aZhongguancun science and technology park will be further strengthened, and great efforts will be made to turn it into a major vehicle in promoting technological progress and self-reliant innovation, so that it will be powerful locomotive in regional economic restructuring and economic growth pattern transforming, and become a service platform for the high and new enterprises to "go abroad" for international competition and become a forefront in the battle for the world commanding point of high-technology industry, and lay a solid foundation for the establishment of a world-class science and technology park.

Efforts should be made to enhance the innovation competence in the Park. Resources at home and abroad should be consolidated for innovation. With the enterprises as leading actors, colleges, universities and research institutes as the stage, innovation system will be established and enhanced, so that there would be major breakthrough in the self-reliant innovation inside the Park, and the Park could be a mainstay in the national innovation system.

There would be incentives to attract major national science and technology R&D projects implemented in the Park. According to the eleventh five-year plan, national project centres, national key labs or similar institutes will be established to attract some national key R&D projects. R&D centres of multinational companies and operation centres of large-sized domestic enterprises should be encouraged to come.

Establishment of national labs and national project centres in the Park should be facilitated. Some key projects in Zhongguancun should be recommended to the nation to be listed as "national projects of high priority", and some special bases should be recommended to be "demostrative national industrial base.

" Secondary innovation on the basis of technology import and absorption should be encouraged. Technology transfer, patent, standard and brand should be the top four strategies in promoting the construction of DemonstrativePark for national intellectual property rights institution; the innovative actors should be guided in creating national and international standards, forming cooperative alliances.

Targeting at building international brand, relevant marketing activities should be initiated to lend premium to the brand?a"zhongguancun".

Pilot projects of the Park should lead the way in the reform. Priorities should be given to investing and financing facilitation platforms and investment guided and magnified mechanism. Ways should be explored to combine technology with capital. Funds to guide start-ups in their investment should be established and development of start-ups should be supported.

Small-and-medium sized enterprises should be encouraged to corporatize and IPO (Initial Public Offering), in a bid to form a "zhongguancun market". Indirect financing channels would be expanded for SMEs, while Credit, insurance and loan should be combined in promoting business development, plans should be developed for corporation bond and financing trusts, and new ways of financing would be explored.

Equities-exchange pilot program can be developed so that non-listed corporations can turn to securities companies to transfer share. At the same time, pilot programs for ownership mechanism reforms, equity incentive policies, and establishment of SME credit system should be carried out. Intellectual, technical and other factors are encouraged to participate in allocation of profits and equities in legal ways.

An enabling environment should be established in providing services for the enterprises in the Park. Efforts should be made to improve "one-stop" service and "one network" administrative approval, and "whole process" agency. Planning, constructing and guiding for incubators and entrepreneur-service centres should be enhanced to bring down cost and risk for the enterprises.

Construction of productivity-enhancing centres and technology-transferring centres should be accelerated. The team of professional agents should be further developed to facilitate transformation of scientific results. Agent system for intellectual property-related matters such as patents and trademarks should be improved.

The development of agencies should be promoted and standardized. Exchanges and cooperation with world-known Science and TechnologyParks should be strengthened to cultivate an international business environment. Zhongguancun should have a culture of its own, and a philosophy to "abide by self-reliant innovation, serve the country through industry, encourage entrepreneurship, and allow for failure".

A cultural atmosphere enabling innovation and entrepreneurship will be cultivated.

A development pattern of "a number of Parks in one development area" will be further improved. Feature parks will be established according to their different functions. Construction will be completed for the business centre of Zhongguancun Science and Technology Park, west wing, life-science Park, Yongfeng industrial base, the third phase of Fengtai Park, environmental protection industrial Park of Tongzhou with the mobilization, Second stage of Software Park, west wing of Electronics Town, bio-medicine base of Daxing, and upgraded Science City of Zhongguancun Park.

The infrastructure, cultural facilities, public amenities, landscaping, and eco-environment of the Park should be improved. A broadband truck network covering the whole district will be established, information network will be improved, the Park will be digitalized and the information service of the Park will be elevated.

(II)To make major innovative breakthroughs

The best human resources and adequate amount of capital should be earmarked for R&D activities. Action should be taken where it is needed. When launching key science and technology breakthrough projects, we should take a strategic perspective in order to break the technical bottlenecks and formulate critical technical specifications, thus enhance the capital? s innovation capacity.

Key technical development should be stepped up. Based on Beijing? s strategic development and the need to serve the whole country, priority should be given to developing high value-added modern service industry, upgrading high-tech industry and boosting the competitiveness of the modern manufacturing industry.

Attention should also paid to properly handling key technical development, making major breakthroughs in software, integrated circuit, mobile communications of new generation, computer and network, digital audio and video, LCD display, bio-chemicals, pharmaceuticals, new energy resources and materials, which helps drive a quantum leap in other industries.

Application research should also be strengthened up in hope of achieving breakthroughs in nanotechnology, superconductive, stem cell and new energy resources, among other strategic high technologies.

Emphasis should be placed on the application and integration of scientific findings. Commercialization of Patented technologies should be accelerated. While developing key industries, a good number of patented technologies should also be fostered. Priority should be given to conservation and application of resources, intelligent transport, construction of Olympic venues, air pollution control, disease prevention and treatment, water-conserving agriculture, food safety and work safety when it comes to application of major technologies.

It? s advised to carry out technical popularization, project demonstration, introduction and consolidation to boost the city development, management and improve the livelihood.

Key disciplinary research should be properly handled, with an emphasis on material science, engineering science, information science, biological science, secure production, urban construction and environmental protection. Input for natural science funds should be increased in order to facilitate theory innovation and further benefit soci-economic development beef up the sci-tech reserves.

Citizens? scientific knowledge should be increased by spreading science and technology. A mechanism should be established where the government play a leading role while the whole society takes an active part. Efforts should also be made to the early completion of the new National Science and TechnologicalMuseum.

(III)To improve the local innovation system

The capital city? s rich reserves of sci-tech and human resources should be brought into full play in the establishment of a city of innovation municipal development. Reform of the sci-tech promotion management system should be deepened while establishing and improving a brand-new partnership between business, academic and research institutions, a market-oriented system that gives the major role to the business community. It? s aimed at improving Beijing? s independent innovation capacity.

A brand-new innovation system should be set up which focuses on the formation of an independent innovation architecture and fostering innovative players featuring the business commuity. Efforts should be strengthened to set up a modern system to manage R&D institutions while encouraging the cooperation between institutions of higher learning, R&D centres and businesses in building market-oriented labs in order to share resources and information.

Competent businesses are also encouraged to tap into the research methods of educational and R&D institutions and establish a specialized public technological platform so as to provide businesses with professional services in design, testing and examination. Businesses, R&D centres are encouraged to join hands in innovation so as to set up standard corporate alliance, technical alliance and industrial alliance to boost industrial development.

Support should also be given to large-sized business in their efforts to team up with transnational companies in the construction of R&D facilities. Innovation initiative of various types of businesses should be aroused, in particular private businesses.

Innovation should remain open to the outside world. Advanced R&D zones should be built that are up to international standards in order to make the city attractive for transnational companies and large-sized domestic businesses to set up R&D and operation centres in Beijing. Equal importance should be attached to the building of a comparatively independent technical system and the expansion of international cooperation in order to improve the business community? s innovation capacity and international competitiveness.

Construction of business technical centres should be promoted. We should act according to the priorities of the urban industrial development and support the business technical centres that are capable of solving major industrial problems. By improving the innovation infrastructure, we wish to create necessary conditions for businesses? constant technical innovation and build a series of significant well-planned business technical centres so as to make concrete contributions to the city? s industrial technologic development.

The independent innovation incentive system should be improved. The government? s sci-tech input system should be reformed. The management mode that focuses on theme project should be adopted so as to let needs govern sci-tech development. R&D projects should be handled openly and the R&D units in charge should be selected through open bid so as to let all social forces contribute to sci-tech development.

Various incentives should be standardized and improved, including performance evaluation systems that focuses on independent intellectual property rights, industrialized performance and constant innovation competence. Facilitating plans to commercialize patents should be carried out so as to improve the government? s role in its investment.

Relevant policies should be put into place, e.g. those related to taxation, finance and government procurement. Venture capital should be encouraged to give an impetus to independent innovation.

The influence of innovation should be strengthened. By well serving institutions of higher learning, R&D facilities and business headquarters in Beijing, we can create a synergy in innovation. Sci-tech cooperation should be boosted among Beijing, Tianjin and HebeiProvince and the pan-Bohai region, with a focus on competitive in the sci-tech areas of Beijing.

In addition, a batch of prioritized projects should be identified to promote the regional development. Technical trade market should be perfected to drive the application of technologies and encourage competent businesses to establish R&D centre in developed countries. Active participation in global sci-tech cooperation can help our businesses better integrate with global innovation systems.

Supportive conditions should be optimized. The policy and legal system should be improved to provide safeguards for independent innovation and establishment of a city of innovation. Uniform platforms in technical trading, corporate financing and information sharing should be established so as to formulate well-developed innovation infrastructure.

Professional service resourced should be consolidated that centre on R&D activities, corporate financing, credit guarantee, incubator transfer, legal services and market-based intermediary services. We should reinforce IPR protection and set up IPR assessment system while boosting the development of IPR intermediary agencies.

Various infringements on IPR should be examined and cracked down upon in order to effectively handle IPR disputes and maintain a sound environment for innovation.

(IV)To tap into the talent pool in Beijing

The idea that talents are the first and foremost resource should be safely borne in our mind and the talent development strategy should be implemented in an all round way to innovate the mechanism for exploring and managing the talent pool of the capital and foster talents with innovating capabilities so as to build Beijing into a capital with plenty of vibrant and promised talents.

The talent fostering program should be implemented. More efforts should be made to improve the capacity building for talent resources to greatly improve the capabilities of various types of talents in study, practice and innovation. The focus should be on high-end talents. Efforts should be made to improve the capacity building for talent resources in an all round way and encourage the enterprises to forge alliance with universities and institutes of various types.

Endeavors should also be made to foster advanced talents in public administration and technologies, managerial professionals and talents of international background. The focus should also be on further expanding green path for attracting talents to actively bring in professionals with proprietary intellectual property rights and master cutting-edge technologies.

Efforts should also be made to strengthen the training for advanced technicians and rural applied professionals and improve the competence of laborers in a comprehensive way so as to meet the needs of social and economic development for professionals.

The mechanism for managing talents should be innovated. Efforts should be made to create a system and policy environment for distinguished talents to stand out and give full play to their caliber. The principle of science, equality, competition and elimination should be followed to establish scientific mechanism to this end.

The market should be encouraged in the allocation of human resources to mobilize the reserves of human resources and properly guide its orderly flow. Incentive mechanisms and policies should be perfected so as to favor key and excellent talents. Management of talents should be properly classified in order to improve systems relating to individual application, uniform social evaluation, corporate discretionary recruitment and transparent evaluation.

Talent assessment means should be upgraded to enhance talent attraction polices and step up the construction of entrepreneurial parks for students overseas. Efforts should be made to introduce talents in dire need. Emphasis should be put on fostering, training and selecting talents in practical work in order to provide enough talents for sci-tech innovation, economic development and social progress.

IX Institutional reform and managerial innovation

Based on the general demands of improving the socialist market economy, we should start with tackling institutional bottlenecks. Priorities should be given to key areas and linchpins and boosting institutional innovation so as to provide institutional safeguards for the execution of the scientific concept of development.

(I)To deepen reform of administration system

Priority should be given to the reform of administration system when deepening the reform drive. We should follow the principle of simplification, unification, efficiency and coordination between decision-making, execution and supervision in the reform process. We should establish the administration featuring scientific decision-making, matching powers with duties, coordinated operation and effective supervision in order to build a competent, responsible and efficient government.

Transformation of government functions should be deepened. Separation of government from enterprises, capital, specific matters and intermediary market agencies should be promoted in order to simplify and standardize the administrative review process. While improving economic regulation and market supervision, attention should also paid to discharging the government duties in compulsory education, public health, public safety, social security and so on, so as to enhance the government? s management and public services

Investment system reforms are to be reformed. We should earnestly implement the review and registration system for business investment projects while further perfecting managerial methods, straightening out processing procedures, strengthening follow-up supervision and setting up a well-coordinated and efficient project management system with a clear definition of responsibilities and duties.

The government? s role should be strengthened to manage investments and make investment decision-making more scientific and democratic. The proxy system should be vigorously implemented to manage non-profit government investment projects while establishing and improving the investment accountability and evaluation systems.

The bidding system should be popularized to establish and improve the supervision and coordination mechanism, unified expert database for evaluation, information disclosure system and industrial self-discipline mechanism to regulate bidding activities.

Restructuring of state-owned institutions and transformation of guilds should be separated. We should act according to the principle of separating the government from business affairs and management from implementation to progressively remove the direct management? s duty to interfere into business operation.

It? s advisable to start from well-prepared departments to conduct the reform of public institutions in a secure and active manner. The development and reform of guilds should be accelerated, based on the principle of separating the old from the new in order to straighten out the management system. Emphasis should be put on building new guilds and transforming old ones in order to establish a guild network that satisfies the demands of market economy and complies with the capital? s economic stature.

The government administration innovation should be sped up. Administration by law, government by law should be boosted to earnestly improve the government? s competence to fulfill its duties according to law. Other systems should also be strengthened, i.e. expert counseling, information disclosure, public report and hearings, decision-making accountability and post decision-making evaluation, which is aimed at making the decision-making process more scientific and democratic.

E-government building is to be reinforced to facilitate allocation of resources, information sharing, business coordination and separation of government from business affairs while speeding up the innovation of administration mode and means. We should work to standardize the performance of government, public servants and improve administrative efficiency so as to reduce the costs.

In addition, we should establish a rational comprehensive system for economic and social development evaluation and a rating scheme for performance review.

( )To arouse the initiative of major market players

We should adhere to the economic system that retains a dominant position for the public ownership while developing diverse forms of ownership side by side in order to facilitate the ownership reform, enhance the government? s regulation of the national economic and realize a faster and better development of the non-public sectors.

The layout and structure of the state-owned enterprises should be adjusted. An orderly flow of the state-owned capital is to be improved to direct the flow of state-owned capital to the crucial and key sectors in the national economy and the large-sized or super-sized enterprises. It? s expected to divide enterprises and institutions directly under the municipal State-Owned Assets Supervision and Administration Commission into investment companies, majority share holding companies, conglomerates or capital management businesses while basically finishing the strategic adjustments of the national economic layout and structure by 2010.

In addition, weak players in common fields should be eliminated through fair competition by then.

The state-owned assets supervision and administration system. We should improve the system relating to the budget of the state-owned capital, corporate operation performance review and accountability system for major decision-making errors while ensuring the equity rights of investors and improving operation and regulation efficiency.

The SOE executive management system should be restructured and revamped so as to speed up the market-based recruitment of managerial talents. The regulation system for the non-profit state-owned assets should be further developed and gradually incorporate the state-owned assets of the public institutions into its supervision.

SOE reform. We should step up SOE the reform process. It? s expected to generally complete the shareholding reform of the large and medium-sized SOEs in Beijing by 2010. We should actively guide the inflow of foreign capital and private funds into the restructuring, reform and upgrading of SOEs while vigorously developing a mixed ownership economy.

We should follow the rule of openness, transparency and standardization in regulating SOE restructuring, ownership transfer in order to steadily conduct the liquidation process and safeguard workers? legitimate rights and interests. In addition, the corporate legal person administrative structure and the board of Directors of key enterprises should be well-established.

The reform of monopoly sectors. The reform of monopoly sectors should be strengthened, such as the water, electricity, natural gas, heating supplies among other public infrastructure and utilities so as to make the market cultivation and operation more open and boost fair competition. The range and scope of concessions, financing, bidding and proxy system should be broadened while promoting the opening-up of the monopoly industries and introducing competition system.

Government? s role should be strengthened in the general plan of urban infrastructure and public utilities as well as in market supervision. In addition, the transformation of the government from a direct manger to a market supervisor should be accelerated.

Non public economic sectors should be promoted. Market access is to be given to all enterprises with legal registration. We should continue removing and revising policies that hinder the development of non public economy in order to grant equal treatment to private businesses. Besides, the funding channels for non-public sectors should be diversified with an emphasis on solving financing difficulties.

SME development should be bolstered. To strengthen business initiation guidance by technical guidance and counseling services to newly set-up SMEs or SMEs starting a second time business. Special government funds should be put to best use while providing guidance for private fund. Emphasis should be put on supporting SMEs? projects relating to financing guarantees, entrepreneurial guidance, independent innovation, clean production, international cooperation and personnel training while fostering commercialized SME service systems.

The SME portal development should be accelerated to realize information sharing between the city, districts and counties. SME entrepreneurial guidance fund should be earmarked to encourage investment in businesses. To explore the potential of establishing regulation agencies, to facilitate the construction of SME financing service platform should be facilitated to help capable SMEs tap into the capital market for funds and construct an open financing system for them.

(III)To promote the development of the market system

We should promote the construction of modern market system with an emphasis on the factor market so as to improve the marketplace.

The development of the factor market. The land market is to be regulated. The bidding, auction and registration system of the commercial land should be improved while strictly allotting the land area and standardizing agreement-based land transaction system. The scope of pilot projects of the collectively-owned land transfer should be broadened to gradually include the land leasing market into its jurisdiction.

The capital market should be boosted to build China Beijing Equity Exchange into a national equity trading centre. Factor markets such as technologies and labor should be further improved while standardizing intermediary agencies of various kinds to perfect the pricing mechanism for commodities and factors.

The development of a credit system. The institution and working mechanism of the social credit system should be established so as to promote the social credit system development in a planned and progressive manner. The credit rating system should be based on the corporate credit information system and individual credit information system, whose development should proceed from enhancing the credit recording relating to credit taxation, loans, contract fulfillment and product quality.

The collection, use and management of credit information should be regulated in order to foster and develop a number of credit service intermediary agencies with good reputation. We should establish rounded credit management system that rewards the good and punishes the bad. Public campaigns among the party bodies, government agencies, service industry and social groups should be promoted to spread good faith and create a bona fide society.

Improved market regulation system. Laws and regulations relating to market access, behavior oversight and consumer rights protection ought to be revised and improved in light of the capital? s realities in order to create a well-coordinated market oversight network featuring administration by law, industrial self-discipline, media supervision and mass? participation.

The market order should be earnestly straightened out and rectified, i.e. cracking down on the production and sale of fake goods, business fraud and IPR infringement, in order to effectively safeguard fair competition and trading security. Focusing on the food and drug safety, the roles of the compulsory product quality supervision system, drugs and medical equipment testing institutions and technical review system as well as foul disease prevention and treatment system should be strengthened in order to safeguard people? s health and safety.

(IV)To improve the mechanism of economic adjustments

Perfection of public fiscal system. The fiscal expenditure structure should be optimized while the separate taxation scheme among the municipal, district and county levels improved. The scope of public fiscal financing should be properly defined, and the inputs to education, culture, public health and social security are to be increased.

We ought to improve the fiscal transfer payment to provide more support for laggard areas and weak fields. Reform of departmental budgets and fiscal budget management system should be further deepened to boost the efficiency of fund use. Meanwhile, efforts should be made to revamp and perfect the government procurement system and regulate the management of land lease proceeds.

Tarrif reform is to be deepened. Market-based pricing system of resources should be promoted while progressively formulate a pricing mechanism that fully reflects the market status and the extent of resource shortage. Market should be given full play in the allocation of resources, conservation of resources and ecological protection through tarrif changes.

The relation between market regulation and public interests should be properly addressed. Therefore, we should determine the rates of water, electricity, natural gas and heating in a cautious manner. Democratic decision-making systems of government tariff setting including expert review, and public hearing mechanism should be further enhanced to make them more rational and democratic.

Meanwhile, it? s important to strengthen the pricing supervision and review in order to maintain the market order and create favorable market conditions. The pricing supervision should be improved for alert and control to properly guide the market and consumption.

Adjustment of economic operation ought to be improved. Emphasis should be put on the coordination of demand and supply in coal, electricity, fuel, transport and natural gas. Interactive coordination should be boosted to transform the economic operation from emergency regulation to institutionalized autonomic regulation.

Pricing mechanism, standard specification, policies, regulations and information disclosure should be brought into full play to maintain the balance between market demand and supply. Information supervision and coordination system ought to be further improved in order to enhance the supervision of economic operation and emergency scheme in a bid to safeguard Beijing? s economic stability and safety.

To further regulate administrative understanding? s fee, so as to alleviate enterprises? and residents? burden.

X. Regional cooperation and opening up

Full play should be given to the advantages of Beijing as the capital to proactively participate in development of the region of Beijing, Tianjin Municipality and Hebei province as well as the Bohai rim area and improve the quality and degree of opening up so as to formulate the new situation of internal cooperation and opening up in a concerted, interactive and win-win manner.

(I) To deepen the cooperation in the region of Beijing, Tianjin and Hebei

The overall deployment of the state for development of the metro-cluster region of Beijing, Tianjin and Hebei should be put in place to give full play to the radiating or exemplary role of the core cities to stick to the combination of leading role of market and the boosting forces of the government and actively innovate cooperation mechanism so as to promote coordinated development and common prosperity in line with the principle of "coordination in a concerted manner, mutual benefit and reciprocity, highlighting the priority and proceeding from the reality".

The focus is on boosting cooperation in the following fields:

Column XI: The city circle of Beijing, Tianjing and Hebei

According to the state? s planning on the city circle, the city circle of Beijing, Tianjin and Hebei is composed of the two municipalities of Beijing and Tianjing and also eight cities in Hebei Province, namely Shijiazhuang, Tangshan, Baoding, Qinhuangdao, Langfang, Cangzhou, Zhangjiakou and Chengde.

Covering an area of 185,000 square kilometers and having a total population of 73.89 million at the end of 2004, this region is of strategic significance in China? s political, economic and social development. As China? s political and cultural center that boasts a large population and frequent economic activities, this region is a major base for the nation to take part in the global economic competition and the first to achieve modernization, and at the same time, it will be an important base for the nation to get integrated with the world.

To adjust the industrial structure. The path of developing high-end industries should be pursued and efforts should be made to develop headquarters economy with the focus on R&D in technology, core manufacturing and marketing services to promote function division among industries in the region and upgrading of their structure.

Efforts should also be made to accelerate development of Beijing Economic-Technological Development Zone and adjacent areas to promote the formation of industry belt in the region covering Beijing, Tianjin and Tangshan. The mode of Shougang Group? s relocation and adjustment should be further explored to catalyze the industries conflicting with the requirements of the capital? s functions to made adjustments or shift into other industries.

Efforts should be made to actively boost the development of the New Seaside Region and CaofeidianIndustryPark.

Construction of communications system. The regional communications plan for the metropolis circle of Beijing, Tianjin and Hebei should be proactively carried out to support the implementation of major projects of Beijing-Tianjin inter-city railway-based transportation and phase III of reconstruction of capital airport, accelerate the building of the Jing-Cheng, Jing-Bao and Jing-Ping express ways and do a good job in the initial phase of projects of Jing-Shi and Jing-Qin inter-city passenger railway-based transportation and third Beijing-Tianjin passage.

Efforts should be made to actively participate in the development of the oceanic shipping system covering the cluster of hub harbors at the BohaiBay to promote the improvement of the regional transport system. Efforts should also be made to actively boost the development of city and town corridors between Beijing and Tianjin, Beijing and Tangshan as well as Beijing and Shijiazhuang, and deliver guidance in coordinated development between cities and regional spatial structures and rational distribution of population.

Resource exploration and utilization. Cooperation in energy exploration should be strengthened and enterprises in Beijing should be encouraged to participate in the exploration of power and coal in the adjacent areas and exploration and utilization of new energies and renewable energies to support the building and transformation of North China Power Grid and enhance the degree to which the regional energy supply can be guaranteed.

Efforts should also be made to promote the implementation of the inter-valley water diversion project of "bringing water of the Yellow river into Shan? xi and Beijing," and cooperation in commercialization of seawater freshening in Tianjin.

The eco-system and environment conservation. Water resources conservation and water environment conservation should be strengthened and dedicated funds should be allocated to support the building of the water conservation works at the upstream of Miyun reservoir and Guanting reservoir, conservation of water environment and development of water-saving industries.

Efforts should be made to continue the cooperation in eco-system conservation and implement the project for harnessing the sources of the sand storms in Beijing and Tianjin and promote the development of eco-based industries in region covering Beijing and Zhangjiakou as well as area covering Beijing and Chende and the building of the eco-shield at the mountains of Yanshan and Taihangshan.

Column XII: The project of sand control in Beijing and Tianjing

In order to set up a protection field for the ecological environment in the capital city and improve the ecological environment in Beijing, Tianjing and their surrounding areas, the state launched the sand control project in 2000, covering Beijing, Tianjing, Hebei, Inner Mongolia and Shanxi, with a total investment of 50 billion yuan ($6.

25 billion). According to this project, it is planned to return 3,943 mu (263 hectares) of cultivated land to grasslands and forests and to build up 7,416 mu (494 hectares) of forests by the year 2010. By the end of 2004, a total of 6,394 mu (426 hectares) of land was well treated in Beijing and Tianjing, with supportive water conservancy facilities being built in nearly 30,000 points and over 20,000 people being moved to other areas for the sake of ecological environmental improvement.

After five years of effort, the vegetation coverage in the above-mentioned places has grown up by 20 percent, greatly improving the ecological environment in these places. The vegetation coverage in the improved areas in Hebei Province has increased by almost 15 million mu (1 million hectares) in the past five years since the project was launched, the grass yield in Inner Mongolia? s project areas up by 0.

5-3 times. ShanxiProvince has accumulatively improved over 6.6 million mu (440,000 hectares) land and has build up a 1.95 million mu (130,000 hectares) shelterbelts of forest and grassland along the sandstorm stricken path to Beijing.

Regional social development. Full play should be given to the advantages of the capital to expand exchanges and cooperation in science and technology, education, culture and health, and encourage running schools or research centres by joint efforts. The regional public health and disease control and prevention regime should be strengthened and the system guaranteeing the regional food safety should be constructed. Human resources exploration has also to be promoted. Those efforts are aimed to better serving the goal of driving up the level of regional social development.

Innovations in regional cooperation mechanism. More efforts should be focused on the building of mechanisms for information exchanges, market development, negotiation of factors, coordination by policies and resolution of disputes to create favorable conditions and environment for in-depth regional cooperation. Cooperation between ports and in logistics should be carried out to promote facilitation of trade and "non-barrier" tourism to contribute to the formation of a unified and open market.

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(II)To expand domestic economic cooperation

To actively participate in developing western China. Cooperation in resources, environment, industries and other fields and energy exploration and building of infrastructure in western China should be actively engaged. The faster application of findings in science and technology in western China should be encouraged.

Efforts should be given to support the development of undertakings in western China such as education, public health, medical service, and culture, etc. Closer exchanges between Beijing and western region in personnel, technology and information should be promoted. Complementary advantages, mutual benefit and reciprocity should be stuck to and economic cooperation with other regions should be well conducted.

To do well in matched support. The deployment of the central government should be unswervingly carried out to continue delivering matched support to destitute Banners (counties) of Inner Mongolia, Lhasa in Tibet, Hetian in Xinjiang and Badong in Hubei province. During this process, combining short-term goals and long-term goals, transfusion and self-production, as well as assistance and cooperation should be adopted continuously to concretely put in place support and assistance.

To strengthen trade and economic cooperation with Hong Kong, Macau and Taiwan. Advantages of those regions and the mainland should be given play to explore and set up multi-tiered cooperation mechanism based on enterprises, linked by industrial organizations and actively promoted by governmental agencies.

Efforts should be made to proactively implement CEPA and hold Beijing-Hong Kong trade fair, Beijing-Taiwan Science, Technology Forum and other activities of significance to bring closer trade and economic exchanges and promote the common development among Beijing, Hong Kong, Macao and Taiwan.

(III.) To enhance the degree of opening up

To actively adapt to the new trend of opening up, accelerate the shifting of growth pattern of foreign trade and improve the quality and effectiveness of foreign investment to significantly enhance the degree of the development of Beijing? s opening economy.

To shift the growth pattern of foreign trade. Reinforcement of the complementary growth of trade and industries should be taken as the principle to actively promote the building of export-oriented production system, optimize the mix of export commodities and improve the quality and effectiveness of foreign trade.

Full play should be given to the competitive advantages of the capital and export of products with proprietary intellectual property rights or proprietary brands should be expanded. Big exporters and processing enterprises with strong matching capabilities should be supported to move up the industry chain and engage in more intensive processing to promote the transition or upgrading of processing based trade.

Efforts should be made to develop trade in service to continually drive up the corresponding level and quality. Work in "coordinated clearance" should be actively promoted by improving clearance environment so as to improve the efficiency with which the enterprises are cleared by customs. The monitoring system for foreign trade should be made fully-fledged, and capabilities of handling trade disputes should be improved to safeguard the legitimate rights and interests of businesses of Beijing.

To make better use of foreign investment. Efforts should be made to continue optimizing the investment environment, utilize foreign investment actively to serve the development of high-end industries of the capital. Guidance in sectors and areas where foreign investment should be put should be strengthened to guide the foreign investment into the modern service sector, the modern manufacturing sector and the modern agriculture sector.

Attention should be paid to introducing advanced technology, managerial experience and highly competent professionals. The focus should be on the batch of key foreign investment projects to give full play to their agglomeration effects and exemplary effects and enhance the level of development in industries and functional zone.

Risk management to foreign debts should be strengthened Great efforts should be made to promote a headquarters economy to proactively attract multinationals to locate their headquarters, R&D centres and clearing centres in Beijing and win its opportunity of harboring branches and headquarters of international organizations to enhance Beijing? s international competitiveness and influence.

To implement the "Go Global" strategy. Businesses with strong competitiveness will be encouraged and assisted to stride into international market and take part in international competition and a batch of Beijing based multinationals with enormous international reputation should be nurtured. Businesses with ripe conditions are encouraged to contract projects abroad and labor exports to expand reciprocal cooperation and common development.

Export of copyrights and cultural products are encouraged to enhance the clout of national culture. The coordinating mechanism for and risk control in overseas investment should be improved.

(IV) To strengthen exchange and cooperation with the international community

Full play should be given to Beijing? s role of international exchange centre to actively carry out international exchanges. More efforts should be made to improve service for and management of international organizations, diplomatic missions to Beijing, news institutions and business agencies. International events of clout should be organized and non-governmental foreign exchanges should be carried out to extend various conveniences for expatriates residing, working or studying here for short-term to concretely turning Beijing a more international-oriented city.