社会主义新农村 Socialist¹ New Countryside

To address the increasingly conspicuous² imbalance in the country's economic landscape, the fourth generation leadership of the Communist Party of China (CPC) has gone to great lengths to correct the urban-rural divide. "Socialist New Countryside" is to date the most comprehensive solution it has prescribed.

The concept first appeared in early 2005 in a major policy paper on rural development. The CPC-proposed a blueprint³ for the country's 11th Five-Year Plan (2006-10). It portrays⁴ the "new countryside" as featuring "advanced production, a well-to-do life, civilized⁵ folkways, a neat look, and democratic management". As part of the campaign, the central authorities are reorienting public finance to support rural development programs.

新型工业化道路 New Path of Industrialization

A strategy for industrialization emphasizing reliance on technological⁶ progress, improved efficiency in resource and energy utilization⁷, and sustainable economic growth.

First raised by Jiang Zemin, former president, in his report to the 16th National Congress of the Communist Party of China in 2002, the blueprint aims at a balance between industrial development and environmental protection, with the focus on promoting industrial advancement⁸ through developing science and technology and giving full play to China's comparative advantage in labor⁹ resources.

Endorsed¹⁰ in the report of Hu Jintao to the 17th National Congress of CPC in 2007, this strategy has become a fundamental guideline for the country's economic progress.

南水北调工程 South-to-North Water Diversion Project

A major project to channel water from the Yangtze River in the southern part of the country to the north through three canals.

The project, considered by the authorities since the 1950s, was formally launched in 2002. Three 1,300-km canals will be constructed in the western, central and eastern parts of China so that water from the upper, middle and lower reaches of the Yangtze River will be brought to the north, where water supply is not adequate.

With an estimated investment of 486 billion yuan, the three canals will be capable of transferring 44.8 billion cu m of water by 2050.

分税制 Tax Sharing System

A policy arrangement between the central government and local governments on collecting and spending of different taxes.

Popular in many market economies, the system divides all tax items into State taxes, local taxes and several shared taxes. The central and local governments collect taxes and manage the public affairs with the money as agreed. Transfer payments from the central government to localities are also part of the system to narrow regional differences. China started a reform in 1994 to introduce this system and established State taxation¹¹ administrations as well as local taxation administrations to implement¹² the system.

三来一补企业 Enterprises of Three Import and Compensation Trade

A shorthand for enterprises that process imported raw materials, manufacture products according to imported samples, assemble imported parts and those that repay loans for imported equipments and technologies with products. Emerging in the coastal¹³ area in the late 1980s, all these enterprises export their products abroad. By taking the processing fee, they become the major force in the processing trade, which forms a big proportion in the country's total trade volume. They played a key role in fostering the development of China's trade.

利改税 Tax for Profits

A reform measure requiring State-owned enterprises (SOEs) to pay taxes instead of submitting their profits to the administration.

The State Council introduced this reform in 1983 by levying¹⁴ a 55 percent income tax on medium and large SOEs rather than taking their profits. Other measures soon followed, creating a complete tax scheme to encourage competition.

This was one of the earliest steps taken to reform SOEs and establish a national tax system, showing that a mature market might be an effective way to improve industrial efficiency.

兴边富民行动 Program to Revitalize Border Areas and Enrich Residents' Lives

A State campaign to boost social and economic development of regions along the land borderline. In 1998, the State Ethnic¹⁵ Affairs Commission started the program to improve the lives of the ethnic people who comprise 48 percent of the 21 million residents in 135 counties along the borderline.

Favorable policies and direct financial investment were granted to improve the infrastructure¹⁶ and public facilities, develop education, promote literacy, boost trade and nurture¹⁷ industries. By 2005, the government spent at least 15 billion yuan in the border areas through the program.