Explanatory Notes to the "Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Continuing the Reform" * 

November 9, 2013 

On behalf of the Political Bureau of the Party Central Committee, I will now explain to the plenary session the "Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Continuing the Reform."

I. The Drafting Process of the Decision 

Since the reform and opening-up initiative was introduced in 1978 the third plenary sessions of past CPC central committees have provided the public with important information for judging the governance policy and focus of the new generations of Party leadership. The discussion topics, decisions made, measures to take, and signals released bore great significance for the Party's work in the five to ten years following the plenary sessions. 

After the Party's 18th National Congress, the Central Committee set out to determine the topics for discussion at the Third Plenary Session of the 18th CPC Central Committee. The 18th National Congress set the goal of completing the building of a moderately prosperous society in all respects and continuing reform and opening up, and emphasized that the Party must, with greater political courage and wisdom, lose no time in continuing the reform in key sectors, and resolutely discard all notions and systems that hinder efforts to pursue sustainable development. It also pointed out that the Party should set up a well-developed, standardized and effective framework of systems, and ensure that operating institutions in all sectors are fully functioning. To achieve the strategic goals and carry out the plans set at the 18th National Congress, we must lose no time in promoting reform comprehensively. 

Thirty-five years have passed since the Party made the historic decision of shifting the focus of the work of the Party and state to economic development and initiating the reform and opening-up drive at the Third Plenary Session of the 11th CPC Central Committee¹. The propelling force behind the improvement of the Chinese people's life, the advancement of our socialist country, the progress of our Party, and the fact that China has gained important international status is no other than our perseverance in carrying forward the reform and opening-up drive. 

During his inspection tour of the South in 1992, Deng Xiaoping said, "If we did not adhere to socialism, implement the policy of reform and opening to the outside world, develop the economy and raise living standards, we would find ourselves in a blind alley."² Today, in retrospect, we have a better understanding of his remarks. This is why, as we are well aware, only socialism can save China, and only reform and opening up can develop China, socialism and Marxism. 

In light of the historical lessons we have learned and the needs of the current times, the Party Central Committee has been repeatedly stressing since its 18th National Congress that reform and opening up plays the decisive role in determining the destiny of contemporary China. It is also the key to realizing the Two Centenary Goals and the great rejuvenation of the Chinese nation. There are no bounds to practice and development, to freeing the people's minds, or to the reform and opening-up effort. We will reach an impasse if we stall or go into reverse on our path; reform and opening up is always ongoing and will never end. Facing the new situation and new tasks, we must continue the reform comprehensively to strive for solutions to the major problems challenging China's development, and work tirelessly to promote the improvement and progress of socialism with Chinese characteristics. 

As extensive and profound changes are taking place domestically and internationally, China's development faces a series of prominent dilemmas and challenges, and there are quite a number of problems and difficulties on its path of development: Unbalanced, uncoordinated and unsustainable development remains a big problem. We are weak in scientific and technological innovation. The industrial structure is unbalanced and the growth mode remains inefficient. The development gap between urban and rural areas and between regions is still large, and so are income disparities. Social problems are markedly on the rise. There are many problems affecting the people's immediate interests in education, employment, social security, health care, housing, the ecological environment, food and drug safety, workplace safety, public security, law enforcement, administration of justice, etc. Some people still lead hard lives. Going through the motions, excessive bureaucracy, self-indulgence, and extravagance are serious problems. Some sectors are prone to corruption and other types of misconduct, and the fight against corruption remains a serious challenge for us. To solve these problems, the key lies in continuing the reform. 

In April this year, after deep thinking and research, and after soliciting opinions extensively both inside and outside the Party, the CPC Central Committee's Political Bureau decided that continuing the reform comprehensively would be the central topic for discussion at the Third Plenary Session of the 18th CPC Central Committee and that the session would come up with a decision. 

On April 20 the CPC Central Committee issued the "Notice on Soliciting Opinions on Continuing the Reform Comprehensively for Discussion at the Third Plenary Session of the 18th CPC Central Committee." It was unanimously agreed by all regions and departments that by selecting this topic for discussion at the session, the Party answered the calls of the Party members, officials and common people in an effort to address the issues that are of most concern to the whole of society. The public showed widespread support for the decision. 

All the third plenary sessions of the CPC Central Committees convened since the reform and opening-up initiative was introduced in 1978 have focused on the discussion of how to continue the reform, sending an important signal that our Party will unswervingly uphold reform and opening up, and firmly adhere to the theories, guidelines and policies put forth since the Third Plenary Session of the 11th Party Central Committee. In a word, it is to answer the question of what banner to hold and what path to take in the new historical conditions. 

Continuing the reform comprehensively as the central topic at the Third Plenary Session of the 18th CPC Central Committee was an important proclamation made by our Party, which well reflects the CPC's adherence to the guidance of Deng Xiaoping Theory, the important thought of the Three Represents and the Scientific Outlook on Development. In the new conditions, the Party is unswervingly implementing its basic guidelines and political program, learning from its past experiences and meeting its fundamental requirements, and firmly upholding reform and opening up. 

After the topic was decided upon, the Political Bureau of the CPC Central Committee set up a drafting group for the Decision of the plenary session. I served as the head of the group, with Liu Yunshan³ and Zhang Gaoli⁴ as deputy heads. Persons in charge of related departments and leaders of some provinces and municipalities also took part. The drafting work was overseen by the Standing Committee of the Political Bureau of the CPC Central Committee. 

Over a period of about seven months following its founding, the drafting group extensively solicited opinions, carried out appraisals of important topics, conducted investigations and researches, and held discussions and revised the document many times. During this period, three meetings of the Standing Committee of the Political Bureau and two meetings of the Political Bureau were held to review the draft Decision. The draft was also circulated among a certain number of Party members and retired Party officials for their suggestions. Opinions were also heard from the central committees of other political parties, heads of the All-China Federation of Industry and Commerce and prominent individuals without any party affiliation. 

The feedback showed that all consulted groups and individuals had reached the consensus that the Decision offers an in-depth analysis of the key issues challenging China's reform, development and stability both in theory and practice, and expounds on the significance of continuing the reform comprehensively and the future of our reform. It sets forth the guidelines for continuing the reform comprehensively, as well as the goals, tasks and underlying principles; it delineates a new blueprint for the reform effort, and envisions the new targets with vigor; it includes the new thoughts, judgments and measures for continuing the reform comprehensively, and reflects the calls, appeals and aspirations of society; and it epitomizes the Party's and the general public's political consensus and wisdom in action to continue the reform comprehensively. 

A consensus was reached among all groups and individuals that the Decision lays out a balanced plan for the strategic key areas in continuing the reform comprehensively, with prioritized goals and focal points. It also introduces the working mechanism, methods of implementation, and the timetable and road map for the reform plan, making a series of major breakthroughs in the theories and policies guiding the reform effort. It once again makes overall plans for continuing the reform comprehensively, serving as a general mobilization for the nation to take action. The Decision is bound to exert a significant and far-reaching influence on the development of the socialist cause with Chinese characteristics. 

In the course of soliciting opinions, people from all sides offered many valuable ideas and suggestions. With careful study and discussion of these ideas and suggestions within the drafting group, as instructed by the Party Central Committee, important revisions were made to the Decision. 

II. The General Framework and Key Issues of the Decision 

The Political Bureau of the Party Central Committee believes that, facing the new situation with new tasks and new requirements, China must take comprehensive measures to continue its reform. To do this, the key lies in further developing an environment for fair competition, further invigorating economic and social growth, further enhancing the efficiency of the government, further achieving social equality and justice, further promoting social harmony and stability, and further improving the Party's leadership and governance. 

To carry out these resolutions, it must be stressed that we should be fully aware of our problems, focus on the key issues for further study and research, and strive to solve the major dilemmas and problems challenging our development. As the CPC has fought its way through revolution, construction and reform, its sole aim has always been to solve the problems of China. It is fair to say that existing problems force us to reform, and reforms are going deeper while problems being tackled and solved. 

In the past 35 years we have overcome many problems hindering the development of the Party and the state through reform. But new problems always replace old ones during our course of exploration and transformation. This is why our system needs to be constantly improved, why reform cannot be accomplished in one stroke and why we cannot rest on our laurels indefinitely once existing problems are solved. 

The draft Decision stressed five major considerations. One, it had to meet the new requirements for the development of the Party and state, and carry out the strategic task of continuing the reform comprehensively, as set forth at the Party's 18th National Congress. Two, it had to center on reform and foreground the new measures for continuing it comprehensively, leaving out general and repetitive measures and measures solely for enhancing development. Three, it had to address the key issues, properly deal with the pressing concerns of the people, respond to their calls and aspirations, focus on important areas and crucial segments, and highlight the leading role of the reform of the economic system in promoting development. Four, it had to take an active yet discreet attitude when designing the reform measures. Five, it had to plan the tasks according to the timetable, which set forth that by 2020 decisive results would have been achieved in the reform of important areas and crucial segments. 

The plenary session set as the framework of the Decision the important issues that China needs to deal with, and arranged the Decision according to its various points. In addition to the Foreword and Conclusion, there are 16 parts divided into three main sections. The first part is also the first section and the General Remarks, which mainly elaborates on the significance, guiding thoughts and overall direction of continuing the reform comprehensively. Section two consists of Parts 2-15, introducing the arrangement of the main tasks and important measures for continuing the reform in six aspects – the economy, politics, culture, society, ecology and national defense/ armed forces. The different aspects are arranged as follows: The economy from Part 2 to Part 7, politics from Part 8 to Part 10, culture in Part 11, society from Part 12 to Part 13, ecology in Part 14, and national defense/armed forces in Part 15. Part 16 composes the third section, Organizational Leadership, which mainly elaborates on strengthening and improving the Party's leadership in the course of continuing the reform comprehensively. 

Here, I would like to explain the considerations of the CPC Central Committee on the major issues and key measures mentioned in the Decision of the Third Plenary Session of the 18th CPC Central Committee. 

First, allowing the market to play the decisive role in allocating resources and letting the government perform its functions better. This is a major theoretical proposition in the Decision, because the reform of the economic system is still the focus of continuing the reform comprehensively, and the appropriate handling of the relationship between the government and the market is still the core issue of the reform of the economic system. 

In 1992 the Party's 14th National Congress stipulated that China's economic reform aimed at establishing a socialist market economy, allowing the market to play a basic role in allocating resources under state macro control. This key breakthrough in theory played an extremely important role in guiding China's reform and opening-up effort, and its economic and social development. It also illustrated that theoretical innovation paves the way for innovation in practice. To comprehensively continue the reform we must renew our theory first. 

After 20 years of practice a socialist market economy has been basically established in China. But there are still many problems. The market lacks order, and many people seek economic benefits through unjustified means; the market for factors of production lags behind in development, unable to allocate the factors of production to meet the effective demand; the lack of unified market rules has resulted in rampant protectionism initiated by departments or local governments; and market competition is not good enough to select the superior and eliminate the inferior, and thus slows down economic restructuring. If left unsolved, these problems will hinder the development of a sound socialist market economy. 

Over the past two decades since the Party's 14th National Congress we have kept searching for a new positioning for the relationship between the government and the market through practice and theoretical research. The Party’s 15th National Congress proposed that "the market plays a basic role in allocating resources under state macro control," the Party's 16th National Congress proposed to "give fuller play to the basic role of the market in allocating resources," the Party's 17th National Congress sought to "introduce institutions to give better play to the basic role of the market in allocating resources," and the Party's 18th National Congress stipulated that the Party should "leverage to a greater extent and in a wider scope the basic role of the market in allocating resources." From the above progression it can be seen that we have been constantly deepening our understanding of the government-market relationship. 

During the discussion and consultation sessions regarding the Decision, many people suggested that the Party should further define the government-market relationship from a theoretical perspective, which would have great significance for continuing the reform comprehensively. With due consideration to these opinions and the current circumstances, and after much discussion and research, the Party Central Committee agreed that it was time to introduce a new theoretical expression concerning this matter, and that the "basic role" of the market in allocating resources should be revised to a "decisive role."

We have now basically established a socialist market economy in our country, with considerable improvement in the degree of marketization. We have gained better knowledge of the market rules and enhanced our capacity to use it to our benefit, and have improved the macro-control system. With both the subjective and objective conditions in place, we should take a new step forward to improve our socialist market economy. 

To further balance the relationship between the government and the market we need to decide which of the two is to play the decisive role in allocating resources. To boost the economy we must enhance the efficiency of the allocation of resources, especially that of scarce resources, so that we can use fewer resources to make more products and gain more benefits. Both theory and practice have proved that the allocation of resources by the market is the most effective means to this end. It is a general rule of the market economy that the market decides the allocation of resources, and a market economy in essence is one in which the market determines resource allocation. We have to follow this rule when we improve the socialist market economy. We should work harder to address the problems of market imperfection, too much government interference and lack of oversight. Positioning the market as playing a "decisive role" in resource allocation is conducive to establishing the correct notion of the government-market relationship in the whole Party and the whole of society, and conducive to transforming the economic growth pattern and government functions, as well as reining in corruption and other forms of misconduct. 

Our market economy is socialist, of course. We need to give leverage to the superiority of our socialist system, and let the Party and government perform their positive functions. The market plays a decisive role in allocating resources, but is not the sole actor in this regard. 

To develop the socialist market economy, leverage should be given to both the market and the government, with differentiated functions. The Decision put forth clear requirements for improving the functions of the government, emphasizing that scientific macro control and effective governance are the intrinsic requirements for giving more leverage to the advantages of the socialist market economy. The Decision also makes plans for improving macro control, correctly performing government functions in all areas, and improving the organization of government. It stresses that the main responsibility and role of the government is to maintain the stability of the macro economy, strengthen and improve public services, ensure fair competition, strengthen market oversight, maintain market order, promote sustainable development and common prosperity, and intervene in situations where market failure occurs. 

Second, adhering to and improving the basic economic system. The basic economic system with public ownership playing a leading role and all forms of ownership growing side by side is an important pillar of the socialist system with Chinese characteristics. 

Since the introduction of the reform and opening-up policy in 1978 the structure of ownership has undergone gradual adjustment, with the weights of the public and non-public sectors changing in their contribution to the economy and employment. The economy and society have grown more vigorous during this process. In such conditions, how to better recognize the leading role of public ownership and stick to this position and how to further explore the effective forms for materializing the basic economic system have become major topics for us. 

It is emphasized in the Decision that we must unswervingly consolidate and develop the public economy, persist in the leading role of public ownership, give full play to the leading role of the state-owned economy, and incessantly increase its vitality, leveraging power and impact. 

Adhering to and furthering the relevant deliberations made since the Party's 15th National Congress, the Decision proposes to vigorously develop the mixed-ownership economy. It stresses that such an economy, with cross-shareholding by and integration of state-owned capital, collective capital and non-public capital, is important to materialize the basic economic system of China. It will help to improve the functions of state-owned capital, maintain and increase its value and raise its competitiveness. It is an effective channel and inevitable choice for us to adhere to the leading role of public ownership and improve the vitality, leveraging power and impact of the state-owned economy in the new conditions. 

The Decision states that China will improve the state assets management system, strengthen state assets oversight with capital management at the core, and reform the authorized operation mechanism for state capital. State-owned capital investment operations must serve the strategic goals of the state, invest more in key industries and areas that are vital to national security and are the lifeblood of the economy, focus on offering public services, develop important and future-oriented strategic industries, protect the ecological environment, support scientific and technological progress, and guarantee national security. The government will transfer part of the state-owned capital to social security funds. We will increase the proportion of state-owned capital gains that are turned over to the public finance, to be used to ensure and improve the people's livelihood. 

State-owned enterprises (SOEs) constitute an important force for advancing modernization and protecting the common interests of the people. Through many years of reform SOEs have by and large assimilated themselves into the market economy. At the same time, however, they have also found problems and drawbacks in their system, which call for further reform. The Decision proposes a series of targeted reform measures: We must ensure that state-owned capital increases its input into public-service-oriented enterprises; in natural monopoly industries in which state-owned capital continues to hold controlling interests, carry out a reform focusing on separation of government administration from enterprise management, separation of government administration from state assets management, franchise operation, and government oversight, separate network ownership from operation, and deregulate control over competitive businesses in light of the conditions of different industries; improve the corporate governance structure to ensure smooth operation and effective checks and balances; establish a system of professional managers, and give better play to the role of business executives; establish a long-term incentive-and-restraint mechanism, and strengthen investigations into the accountability of SOE operations and investment; and explore ways to publicize important information, including SOE financial budgets. Moreover, SOEs should appropriately increase the proportion of market-based recruitment, and properly determine and strictly regulate the salary level, post-related benefits and expenses as well as business spending of SOE managerial personnel. These measures will stimulate SOEs to improve the modern corporate system, enhance their operating efficiency, better fulfill their social obligations and play a better role in the economy. 

We must adhere to the "two unswervinglys"⁵ in order to continue and improve our basic economic system. The Decision proposes reform measures on multiple levels to encourage, support and guide the development of the non-public sector of the economy, and to stimulate its vigor and creativity. On functional positioning, the Decision points out that both the public and non-public sectors are important components of the socialist market economy, and an important basis for China's economic and social development. On the protection of property rights, the Decision points out that the property rights of both the public and non-public sectors are inviolable. On policy treatment, the Decision stresses equal rights, equal opportunities and identical rules, and a unified market access system. The Decision encourages non-public enterprises to participate in the reform of SOEs, encourages development of mixed-ownership enterprises in which private capital holds majority shares, and encourages qualified private enterprises to establish a modern corporate system. All these will contribute to the healthy development of the non-public sector of the economy. 

Third, continuing the reform of the fiscal and taxation systems. Finance is the foundation and an important pillar of national governance. Good fiscal and taxation systems are the institutional guarantee for improving resource allocation, maintaining market unity, promoting social equity, and realizing enduring peace and stability. Developed on the basis of the tax distribution system⁶ reform initiated in 1994, the current fiscal and taxation systems have played an important role in increasing the government's financial strength and promoting the rapid growth of the economy. 

As the situation changes, the current fiscal and taxation systems cannot effectively respond to the requirements for dividing powers between the central and local governments to improve national governance. They have lagged behind our effort to transform the economic growth pattern and promote the sustained and healthy development of the economy and society, and are causing problems that hinder economic and social development. 

Reform of the fiscal and taxation systems is one of the key points in continuing the reform comprehensively. The reform mainly includes improvement of the budgeting and taxation systems, and establishment of a system in which authority of office matches responsibility for expenditure. 

The Decision stipulates that we will adopt a complete, standardized, open and transparent budget system, and appropriately increase the authority of office and responsibility of expenditure of the central government, including those concerning national defense, foreign affairs, national security, and unified national market rules and management. The authority of office over some social security programs, and the construction and maintenance of major trans-regional projects will be shared by the central and local governments, and the authority of office will be gradually clarified in this regard. The central government can delegate some expenditure responsibilities to local governments through transfer payments. In terms of trans-regional public services with great impacts on other regions, the central government will shoulder some of the expenditure responsibilities of local governments through transfer payments. 

The main aim of the reform is to clearly define authority of office, reform the taxation system, make tax burdens stable and budgets transparent, and increase efficiency. It also aims to accelerate the development of a modern fiscal system that is conducive to the transformation of the economic growth pattern, the establishment of a fair market under unified rules, and the promotion of equal access to basic public services; develop fiscal and taxation systems that are compatible with the financial resources and authority of office of the central and local governments; and mobilize the initiative of both the central and local governments. 

Reform of the fiscal and taxation systems is a step-by-step process, and will take some time to complete. The Party Central Committee has clearly stated that we must maintain the stability of the current financial patterns of the central and local governments, and further rationalize the division of revenues between them. 

Fourth, improving mechanisms and institutions for the integrated development of urban and rural areas. The unbalanced development between urban and rural areas is a serious problem hindering the development of our economy and society, a major problem we must solve in order to complete the building of a moderately prosperous society in all respects and accelerate socialist modernization. Tremendous changes have taken place in China's rural areas since the reform and opening-up policy was introduced in late 1978. However, the separate urban-rural structures have not changed fundamentally, and the widening gap between urban and rural development has not been reversed. To solve these problems, we must push forward the integrated development of urban and rural areas. 

The Decision states that we must improve the mechanisms and institutions to form new relations between industry and agriculture and between urban and rural areas in which industry promotes agriculture, urban areas support rural development, agriculture and industry benefit each other, and there is integrated urban and rural development, so that the overwhelming majority of farmers can participate in the modernization process on an equal basis and share the fruits of modernization. 

The Decision proposes reform measures to improve the mechanisms and institutions for the integrated development of urban and rural areas: One, accelerating the building of a new type of agricultural operation system. We will maintain the fundamental status of family operation in agriculture; encourage the transfer of contracted land-use right to big, specialized operators, family farms, farmers' cooperatives and agrobusinesses; encourage rural areas to develop cooperative economies; encourage and guide industrial and commercial capital to invest in rural areas to develop modern planting and breeding industries suited to commercialized management; and allow farmers to develop industrialized operation of agriculture by becoming shareholders using their contracted land-use right, among other measures. Two, endowing farmers with more property rights. We will protect farmers' contracted land-use right by law, safeguard the rights and interests of farmers as members of collective economic organizations, ensure rural households' usufruct of their homesteads, and select several pilot areas to steadily and prudently push forward the mortgage, guarantee and transfer of farmers' residential property rights. Three, promoting equal exchanges of factors of production and balanced allocation of public resources between urban and rural areas. We will ensure migrant workers receive equal pay for equal work, and ensure farmers equally share the gains from added value of land; improve the agricultural insurance system; encourage investment in rural development, and permit enterprises and social organizations to start all kinds of undertakings in rural areas; make a balanced allocation of compulsory education resources between urban and rural areas, integrate the basic old-age insurance and healthcare insurance systems of urban and rural residents, and improve the balanced development of the minimum living allowance system in both urban and rural areas; and steadily make basic urban public services available to all permanent residents in cities, and incorporate farmers who have settled down in urban areas into the urban housing and social security network. 

Fifth, promoting wide, multi-tiered and institutionalized consultative democracy. Consultative democracy is a unique form and distinctive advantage of China's socialist democracy, and an important embodiment of the Party's mass line in the political field. Promoting consultative democracy is conducive to improving the people's orderly participation in political affairs, strengthening the ties between the Party and the people, and promoting scientific and democratic decision-making. 

Promoting wide, multi-tiered and institutionalized consultative democracy is an important issue of political restructuring as stipulated in the Decision. The Decision stresses that, under the leadership of the Party, China will promote consultation throughout society with regard to major issues of economic and social development, and practical issues closely related to the interests of the people, and adhere to the principle of consultation before policy-making and during policy implementation. We will build a consultative democracy featuring appropriate procedures and complete segments to expand the consultation channels covering organs of state power, committees of the Chinese People's Political Consultative Conference (CPPCC), political parties, and community-level and social organizations; conduct intensive consultations on issues relating to legislation, administration, democracy, political participation and social problems; give full play to the important role of the United Front⁷ in consultative democracy, make the CPPCC serve as a major channel for conducting consultative democracy, improve the system of the CPPCC, specify the contents and procedures for consultation, diversify forms of consultative democracy, and more actively carry out orderly consultations on particular issues with those working on these issues, with representatives from all sectors of society, and with the relevant government departments on the handling of proposals, and increase the frequency of consultations to improve their effectiveness. 

Sixth, reforming the judiciary and its operation mechanism. The judiciary is an important component of the political system. Miscarriage of justice has been a major concern of the people in recent years, and the judiciary suffers a lack of credibility largely due to its current defective system and operation mechanism, which need improvement. 

Judicial reform is one of the key points in continuing the reform comprehensively. The Decision puts forward a series of new and related measures in the following aspects: reform of the judicial management system, unification of the management of staff, funds and properties of courts and procuratorates at and below the provincial level and exploration of ways to establish a judicial jurisdiction system that is appropriately separated from the administrative divisions; improvement of the mechanism for the use of judicial power; improvement of the responsibility system for handling cases by the presiding judge and the collegiate bench, by which the judges hand down verdicts and the collegiate bench is responsible for carrying them out; strict regulation of the procedures of sentence commutation, release on parole and medical parole; improvement of the mechanism for preventing and correcting wrong cases and the accountability system, and strict implementation of the rule banning illegal evidence; establishment of a system for settling complaints involving law violations and lawsuits made in the form of letters and visits in accordance with the law; and abolition of the re-education through labor system, and improvement of laws for the punishment and correction of unlawful and criminal acts. 

These measures are of vital significance for ensuring that judicial departments independently exercise their judicial and procuratorial powers according to law, improving the judicial power operation mechanism in which rights and responsibilities are clear, improving judicial transparency and credibility, and safeguarding human rights. 

Seventh, improving leading and working mechanisms for anti-corruption efforts. Fighting corruption has always been a widely discussed topic inside and outside the Party. We are now mainly challenged by the following problems: Anti-corruption forces performing functions separately makes it difficult to build up synergy; some cases are not dealt with resolutely; and the accountability system is too lax to handle reoccurring corruption cases. 

The Decision lays out plans for promoting innovation in the anti-corruption mechanisms and institutions, and strengthening institutional guarantees. The main points are: strengthening the Party's unified leadership to build a clean and honest government and combat corruption; ensuring that Party committees bear primary responsibility and the commissions for discipline inspection take the responsibility for oversight, and working out and implementing a feasible accountability system; improving the leading and working mechanisms for anti-corruption efforts, reforming and improving the functions of anti-corruption coordination groups at all levels, and leaving the investigation of corruption cases mainly to commissions for discipline inspection of higher levels; strengthening the leadership role of the higher levels over the lower levels of the discipline inspection commissions, and the simultaneous reporting of the related investigation process to the Party committee at the same level and the commission for discipline inspection at the next-higher level; and fully ensuring that the Central Commission for Discipline Inspection dispatches resident discipline inspection agencies to the central-level departments of the Party and the government, and improving the discipline inspection system at both the central and local levels, so that it covers all regions, all sectors, all enterprises and all public institutions. 

All these measures are based on past experience and the suggestions of various groups and individuals. 

Eighth, accelerating the improvement of the leadership for the management of the Internet. Cyber security and information security bear on national security and social stability, and pose new challenges for us in many aspects. 

Falling behind the rapid development of Internet technology and applications, our current management of the Internet is seriously flawed and cannot function properly. Different administrative bodies engaged in multi-channel management of the Internet, over-lapping functions and mismatch between powers and responsibilities – all these have led to inefficient management. Also, as the Internet grows into a new form of the media, the management of this online medium and the industry is lagging far behind the development of the business. With fast growth in the number of the users of micro-blogs, WeChat and other social network services and instant communication tools, which spread information quickly over wide areas and can mobilize large numbers of users, how to strengthen oversight within a legal framework and guide public opinion and how to ensure the orderly dissemination of online information, while at the same time safeguarding national security and social stability, have become pressing problems for us. 

The Decision stipulates that we must adhere to the principles of proactive usage, well-planned development, management in accordance with the law and ensuring safety in strengthening management of the Internet in accordance with the law, and accelerating the improvement of the leadership for the management of the Internet. The aim of this is to integrate the functions of the related departments and form joint forces in the management of the Internet covering both technology and contents, and ranging from daily security to combating crimes, to ensure correct and safe Internet usage. 

Ninth, establishing the National Security Commission. National security and social stability form the basis for further reform and progress. Currently we are challenged by pressure from two sources: Internationally we must safeguard state sovereignty, national security and our development interests, and domestically we need to maintain political and social stability. All kinds of foreseeable and unforeseeable risks are increasing significantly, but our security system is not good enough to meet the demands of ensuring national security. We need to establish a strong platform to coordinate our national security work. For this purpose, establishing the National Security Commission to strengthen unified leadership of national security at the central level has become an urgent matter. 

The main responsibilities of the National Security Commission are to formulate and implement national security strategy, promote national security legislation, design principles and policies for national security work, and discuss and resolve key issues concerning national security. 

Tenth, improving the country's natural resource management and oversight systems. Improving the country's natural resource management system is an important reform for developing the property right system for natural resources. It is also the intrinsic requirement for building an ecologically friendly country with complete support systems. 

Some of our major frustrations in ecological protection are caused by problems in the ecological management system. One problem lies in the vague concept of ownership of natural resources by the whole people, which leads to problems in the identification of the rights and interests of the owners. To solve this problem, the Decision puts forth measures for improving the natural resource management system. The guiding thoughts are: ensuring people's property rights to natural resources in accordance with the principle of separation between ownership and management, one issue belonging to one department, and establishing a unified responsibility mechanism for people who act on behalf of the public to manage public natural resource assets. 

There is a difference between the state's exercise of power and management over the natural resource assets owned by the whole people and the state's supervision and management of the natural resources within its territory. The former is the owner's right, while the latter is the manager's right. This requires us to improve the system of oversight of natural resources, and fulfill our duties as the managers of our territorial space. The owners of state-owned natural resource assets and the managers of state natural resources must act independently, while cooperating with and supervising each other. 

We need to realize that our mountains, waters, forests, farmlands and lakes form a living community. The lifeline of the people comes from the farmland, that of the farmland comes from the water, that of the water comes from the mountain, that of the mountain comes from the earth, and that of the earth comes from the tree. To control the exploitation of natural resources and restore the ecosystem, we must follow the laws of nature. If people only tend to their own responsibilities, for example, growing trees, regulating rivers or protecting farmland in isolation, they are prone to gaining in one area and losing in another, which eventually leads to systemic destruction of the ecology. Therefore, it is of the utmost importance to put one department in charge of the usage of the entire territory of a country, and carry out unified protection and restoration programs for its natural resources. 

Eleventh, establishing the Leading Group for Further Reform under the CPC Central Committee. Continuing the reform comprehensively is a complicated system engineering project, which requires more than one or several departments to carry out. Therefore, leadership at a higher level should be established for this purpose. 

The Decision stipulates that the Party Central Committee will set up the Leading Group for Further Reform. This is to give better play to the Party's core function as leader having a picture of the whole situation and as chief coordinator of different aspects, so as to ensure the reform progresses smoothly and the assigned tasks are implemented as planned. The main responsibilities of this leading group are planning key national reforms, promoting coordinated reforms in various fields, coordinating various forces into a joint force for reform, strengthening supervision and oversight, and promoting full implementation of the reform's aim and tasks. 

III. Several Matters That Require Attention in Discussion 

The task of this plenary session is to discuss the guiding thought and plans for continuing the reform comprehensively as proposed in the Decision. For the discussion, please bear the following in mind: 

First, we must be more confident and courageous in pushing forward reform. Reform and opening up is a new great revolution of the Chinese people led by our Party in the new era. It is the most outstanding characteristic of contemporary China, and the distinctive feature of our Party. What has helped our Party inspire the people, unify them and pull their strength together over the past 35 years? What have we been relying on to stimulate the creativity and vitality of our people, realize rapid economic and social development and win a competitive advantage over capitalism? The answer has always been reform and opening up. 

Looking to the future, there is no alternative to continuing reform and opening up if we are to solve all sorts of difficult problems hindering our development, defuse risks and meet challenges in all aspects, give better play to the advantages of socialism with Chinese characteristics, and promote the steady and healthy development of the economy and society. 

At the current stage, close attention to our reform and opening-up drive comes from inside and outside the Party and inside and outside the country as well. The entire Party and all sectors of society have high expectations for us. Our reform has come to a critical juncture. We must not waver in the slightest degree in carrying out reform and opening up, and we must continue to uphold and firmly adhere to the correct path of socialism with Chinese characteristics. The whole Party must reaffirm our conviction to push forward reform with greater political courage and wisdom, and stronger measures and methods. 

Second, we must continue to free our minds and seek truth from facts. To keep our banner of reform and opening up flying high, we must also take pragmatic measures once we have a strong conviction. Actions speak louder than words. It is a strategic choice of the CPC Central Committee to make overall plans for continuing the reform comprehensively at the Third Plenary Session of the 18th CPC Central Committee. We must take this opportunity to make new breakthroughs in our reform. For this to happen, we need to further free our minds. 

To break down the barriers of old notions and the fences of interest groups, freeing the mind is the first and most important step. Often, the roadblocks in our minds that hinder reform do not come from outside the system, but from within. If the mind is not freed we can hardly see the crux of our problems with the interest groups, or pinpoint the direction of our effort to break down the barriers. We will also find it difficult to come up with innovative reform measures. Therefore, we must have the courage and breadth of vision to seek self-improvement. We need to throw off the trammels of outdated ideas and overcome the constraints put in place by various departments for their own interests, and proactively conduct research and propose reform measures. 

Before putting forth a reform measure, we must research and discuss it carefully, but this does not mean being overcautious or hesitant to try anything new. It is not possible to carry out reforms while keeping our current work pattern and operation system intact, nor is it possible to do it in a rock-steady or risk-free manner. As long as we have done thorough research and appraisal, and know what we are going to do agrees with the actual conditions and needs to be done, we will go ahead without looking back. 

Third, we must put the interests of the state first when making deliberations. Continuing the reform comprehensively is a major strategic plan concerning the overall development of the Party and the state, rather than a single program to reform a certain aspect of a sector. "One who fails to plan for the whole situation is incapable of planning for a partial area."⁸ You come from different departments and units, and you need to see things from a wider perspective. For major decisions, first we should judge whether a proposed reform measure meets the needs of the country, and whether it is conducive to the long-term development of the cause of the Party and the state. We must strive to look forward into the future, think beyond the times, and proactively draw up plans. This will enable us to put through reform measures that will genuinely promote the cause of the Party and the people. 

To continue the reform comprehensively, we should strengthen planning at the top level and adopt a holistic approach in doing so. We should study more intensively the connectedness, consistency and feasibility of our reform measures. As we say, "We must push reform forward boldly and steadily." Here "steadily" means adopting a holistic approach in planning, doing overall research and making decisions scientifically. Reforms in the economy, politics, culture, society and ecology are closely connected to and integrated in the reform of Party building. Reform in one sector will always affect other sectors and require other sectors to reform accordingly. If reforms in different areas do not support each other, and the measures taken in some sectors turn out to check the progress of other sectors, we will find it difficult to continue the reform comprehensively; we will get into a muddle with the reform if we disregard these factors. 

* Explanatory notes made to the Third Plenary Session of the 18th CPC Central Committee. 

Notes 

¹ The Third Plenary Session of the 11th CPC Central Committee was convened in Beijing from December 18 to 22, 1978. At this plenary session, Marxism was reestablished as the guideline for the Party's ideological, political and organizational work. This plenary session also made the historic decision to shift the focus of the Party and state to economic development and to introduce the reform and opening-up initiative, which marked a great transition of far-reaching significance in the history of the CPC since the founding of the People's Republic in 1949, and thereby ushering in a new period of reform and opening up in China. 

² Deng Xiaoping: "Excerpts from Talks Given in Wuchang, Shenzhen, Zhuhai and Shanghai," Selected Works of Deng Xiaoping, Vol. III, Eng. ed., Foreign Languages Press, Beijing, 1994, p. 358.

³ Liu Yunshan, born in 1947 and a native of Xinzhou City, Shanxi Province, was then a member of the Standing Committee of the Political Bureau of the Party Central Committee, a member of the Secretariat of the Party Central Committee and president of the Central Party School. 

⁴ Zhang Gaoli, born in 1946 and a native of Jinjiang, Fujian Province, was then a member of the Standing Committee of the Political Bureau of the Party Central Committee and vice premier of the State Council. 

⁵ The "two unswervinglys" are: We will unswervingly consolidate and develop the public sector of the economy, and at the same time unswervingly encourage, support and guide the development of the non-public sector of the economy. 

⁶ The tax distribution system is a model fiscal management system. It divides the distribution of all taxation items of the country between the central and local governments, so as to define the ranges of their respective revenues. Its nature is to specify the financial power of the central and local governments according to their authority of office, and to form the respective revenue systems of the central and local governments through the distribution of taxation items between them. China adopted the tax distribution system on January 1, 1994. 

⁷ The United Front refers to the political union formed by various social and political forces, including social classes and strata, political parties and groups, and even ethnic groups and nations, based on their common interests, to achieve a common goal under certain historical conditions. The United Front under the leadership of the CPC is the broadest revolutionary, socialist and patriotic United Front formed by all ethnic groups, all political parties, all social strata and people of all circles in China during the New Democratic Revolution (1919-1949), socialist construction and reform, to achieve national independence, democracy and prosperity and the rejuvenation of the Chinese nation. 

⁸ Chen Danran: "Proposals on Moving the Capital and Establishing Feudatories," Enlightening Speeches (Wu Yan). Chen Danran (1859-1930) was a litterateur in the Qing Dynasty.

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