（March 11， 1997）
颁布日期：19970311 　实施日期：19970311 　颁布单位：中共中央、 国务院

The Central Committee of the Communist Party of China and the State Council approve the

Township and village enterprises are a great creation of the Chinese peasants. Township and village enterprises have witnessed rapid growth and scored tremendous achievements since the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China. Township and village enterprises have become the backbone force of rural economy and a strong pillar of the national economy having made great contributions to diversion of surplus labor power in the rural areas， increase in peasants' income and input in agriculture， consolidation and strengthening of the collective economy and the building of affluent， civilized and prosperous new socialist rural areas； having played an important role in increasing effective supply of society， promoting the country's industrialization， enhancing the nation's comprehensive power， consolidating the worker peasant alliance and ensuring social stability； and having explored a successful path for the satisfactory resolution of the problem of agriculture， the rural areas and peasants and promoting economic restructuring， and national socio-economic development in a big agricultural country like China where peasants constitute the vast majority. Development of township and village enterprises are a major strategic option for the promotion of China's socialist modernization and making the country strong and the people rich.

The coming fifteen years are a crucial period in China's socialist modernization during which township and village enterprises shoulder new historical responsibilities.

In the eastern regions emphasis should be on improvement and development should be achieved in the process of development； in the central and western regions stress should be on sustained rapid growth and improvement made in the process of development. In the eastern regions efforts should be made to actively develop technology-intensive and capital-intensive industries and outward-oriented economy， push enterprises in the expansion of scales， upgrading technical levels and grades of products， transfer step by step labor-intensive and resource-processing industries to the central and western regions so as to accelerate the pace of development there. Actively implement the east-west cooperation strategy. The eastern regions and the central and western regions should strengthen association and cooperation， embark on the road of development with the east leading the west， the west pushing the east and mutual advancement hand in hand on the basis of the principle of complementing one another with one's own advantages， reciprocity and mutual benefit and sincere cooperation so as to narrow step by step the gap in economic development among regions. The policy of encouraging the subsidization， development and stimulation of agriculture by industry should be continuously perfected. Actively set up enterprises with agricultural produce and sideline products processing and distribution as the driving force， realize integration of cultivation， breeding and processing and integration of trade， industry of agriculture， promote industrialized and intensive management and operations of agriculture， to encourage the peasants and enterprises to form community of interests， to realize increment in value and benefit of farm produce and increase in peasants income. Resources should be developed and exploited rationally， pollution actively prevented and treated， and resources， environment and cultivated lands protected in real earnest. Industries structures should be adjusted rationally， distribution of enterprises optimized by relying on scientific and technological advancement， strengthen enterprise management and resolve in good earnest a number of questions such as low-level repetition in construction， dispersion in distribution， extensive operation， unsatisfactory management and low efficiency in certain localities and enterprises.

The Party and the State carry out the policy of “giving active support， making rational planning， providing guidance according to the conditions of different categories and effect administration in accordance with law” with regard to township and village enterprises. Party and government leaders at all levels should， standing at the strategic height of reform and opening up and building socialism with Chinese characteristics， fully realize the great and profound significance of developing township and village enterprises and unswervingly promote the reform， development and upgrading of township and village enterprises. Township and village enterprises should be integrated into the overall plan for national socio-economic development， and practical and feasible policy measures worked out， and efforts intensified to render support to them and good external environment created for them. Party Committees and governments at all levels should strengthen leadership in real earnest， take the development of township and village enterprises as a strategic focus in bringing prosperity to the rural economy and the national economy as a whole， place it high on the agenda， study regularly the emerging situation， new conditions and fresh experiences in the development of township and village enterprises and make timely decisions in respect of a number of major issues and resolve the difficulties and problems in the process of reform and development. Laws， regulations and policy measures related to township and village enterprises should be implemented in all seriousness. The burden of township and village enterprises should be lightened in real earnest and the legitimate rights and interests of township and village enterprises protected. Administrative agencies for township and village enterprises should be further perfected to give full play to their functional roles in planning， guidance， administration， supervision， coordination and services. All departments concerned should go all out， cooperate and coordinate with one another in providing stronger support for the development of township and village enterprises， promote， guide， protect and standardize the development of township and village enterprises in the realization of the Nineth Five-Year Plan and the 2010 Perspective Goals of the country's national socio-economic development and making new greater contributions to China's socialist modernization.

Appendix： REPORT ON THE SUGGESTIONS WITH REGARD TO THE CONDITIONS OF TOWNSHIP AND VILLAGE ENTERPRISES IN CHINA AND THEIR FUTURE REFORM AND DEVELOPMENT （Ministry of Agriculture， January 31， 1997）

Since the implementation of the policy of reform and opening up and under the guidance of Deng Xiaoping's theory of building socialism with Chinese characteristics and the Party's basic line， township and village enterprises have witnessed vigorous development in China and scored achievements which have become the focus of people's attention. In the coming fifteen years， township and village enterprises are faced with new situation and shouldering heavy historical responsibilities in the process of the implementation of

I. BASIC SITUATION CONCERNING THE DEVELOPMENT OF TOWNSHIP AND VILLAGE ENTERPRISES SINCE THE IMPLEMENTATION OF THE POLICY OF REFORM AND OPENING UP

Township and village enterprises have developed and grown since the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China. In particular， in the decade or more since the Central Committee of the Communist Party of China and the State Council transmitted in 1984

They Are a Staunch Pillar Strengthening Rural Collective Economy. In 1995， the increment value of township and village enterprises accounted for 56% of the entire rural social increment value and in the coastal regions and the suburbs of big cities it accounted for over two third. Collective assets of township and village enterprises account for 77% of the total rural collective assets which have strongly consolidated and strengthened the socialist collective economy.

They Are a Strong Guarantee for the Realization of Peasants' Well-to-do Life. In 1995， the wage paid by township and village enterprises to workers and staff members amounted to RMB 438 billion Yuan with 50% of the net increase of the peasants' per capita net income from township and village enterprises. Development of township and village enterprises constitutes an important force and a measure treating the root-cause in reducing peasants' burden and development for poverty eradication. Peasants' income increases faster， their burden relatively lighter and there are less poverty-stricken people in localities where township and village enterprises are more developed.

They Provide a Main Channel for the Absorption of Rural Surplus Labor. In 1995， 128 million people were employed in township and village enterprises， taking up 28% of rural labor force. During the Eighth Five-Year Plan period， 35 million people were employed by township and village enterprises， alleviating employment pressure in China while creating conditions for agricultural operations run on a moderate scale and raising labor productivity.

They Provide the Material Foundation for the Promotion of Modernization of Agriculture. The development of township and village enterprises has increased input into agriculture， provided large amount of means of production for agriculture and strongly supported the development of agriculture with increment value through farm produce processing and subsidization， development and stimulation of agriculture by industry. During the Eighth Five-Year Plan period， funds from township and village enterprises for subsidization and development of agriculture， construction related to agriculture and various rural undertakings amounted to over RMB 100 billion Yuan.

They are an Effective Force for the Increase in Effective Supply of Society. Production and operations of township and village enterprises involve almost all the domains of the national economy. At present， numerous products of township and village enterprises especially the daily consumer goods occupy quite a big percentage， for instance， electronics and communications equipment manufacture accounts for 17%， machinery takes up 26%， coal 40%， cement 40%， foods stuffs and beverages 43%， garments 80%， small- and medium-size farm implements 95% and bricks and tiles 95%， thus making a historic contribution to the prosperity of urban and rural markets in China.

They Constitute an Important Wing in Promoting the Country's Industrialization. In 1995， the increment value of township and village industries reached RMB 1080.4 billion Yuan， accounting for 44% of national industries increment value. During the Eighth Five-Year Plan period， 50% of the net increase in national industries increment value came from township and village enterprises. Urban and rural industries depend on and support each other， integrate with each other and promote each other， opening up a new path of industrialization with Chinese characteristics and accelerating the process of China's industrialization.

They are an Effective Way of Enhancing China's Comprehensive National Power. In 1995， revenue from business operations of township and village enterprises nationwide reached RMB 5729.9 billion Yuan； increment value accomplished amounted to RMB 1459.5 billion Yuan， accounting for over a quarter of GDP； shipped value of export commodities was RMB 539.5 billion Yuan， taking up 34% of national export volume； taxes paid to the State were RMB 128 billion Yuan， accounting for 25% of the country's tax revenue. During the Eighth Five-Year Plan period， 30% of China's GDP came from township and village enterprises. Development of township and village enterprises has enhanced China's overall economic strength.

They Constitute an Important Factor of Social Stability. Development of township and village enterprises has enabled large amount of rural surplus labor to have stable occupations and income， provided the material foundation for the building of government power at the grass-roots level in the rural areas and enhanced the cohesive power of the Party organizations and government institutions at the grass-roots level in the rural areas.

They Provide Strong Positions for Cultivation of Spiritual Civilization in the Rural Areas. Development of township and village enterprises has promoted the building of small townships and the growth of such undertakings as science， culture and education， narrowed the gap between the cities and rural areas and the gap between workers and peasants， consolidated the worker peasant alliance， raised the quality of peasants， and trained a huge industrial army. All this has played an important irreplaceable role in the cultivation of spiritual civilization in the rural areas.

What warrants special attention is the fact that township and village enterprises have formed a whole set of unique and flexible mechanisms by persevering in the organization of production and business operations guided by the market with elements of production from the market and products to the market. They include the independent and rapid decision-making mechanism， the in-and-out labor employment mechanism， the up-and-down cadre mechanism， the salary-efficiency related distribution mechanism， the clearly-defined reward and penalty incentive mechanism， the self-responsible profit-loss restraining mechanism and the self-accumulation development mechanism， etc…… The principle that the enterprises will not eat from “the big pot”， workers and staff members will not have “iron rice bowls” and cadres will not sit in “iron chairs” is adhered to. All this has made useful explorations and provided valuable experiences for the establishment of socialist market economic system in China.

In 1996， township and village enterprises nationwide continued to maintain a good momentum， continued to grow through reform and moved steadily forward through overcoming difficulties with moderate growth in major economic targets， making a good beginning for the launch of the Nineth Five-Year Plan. It was estimated that revenue from business operations during the year would come to RMB 6800 billion Yuan， an 18.7% increase of the preceding year； increment value accomplished reached RMB 1770 billion Yuan among which increment value of industries was RMB 1300 billion Yuan， an increase of 16.5% and 18.5% respectively of the preceding year； total profit RMB 430 billion Yuan， an increase of 16.3%； taxes paid to the State RMB 150 billion Yuan， an increase of 17.2%； newly-emplaced labor over 3.5 million persons， total number of workers and staff members 132 million people. All this has played an important supporting role in the sustained development of the rural economy and the entire national economy.

Facts have proved that township and village enterprises have become the main body of China's rural economy and an important pillar of the national economy， forming an important component part of building socialism with Chinese characteristics. Their rise and growth in strength have not only brought about a profound change in the rural economy and the entire national economy， but also opened up a new path to realize modernization of agriculture and the rural areas step by step， accelerate the process of the country's industrialization， promote reform， opening up and sustained development of the economy in an agricultural power like China where peasants constitute the vast majority. It is a logical path in line with the state of the nation and the people's wishes.

Despite the great achievements of township and village enterprises， there also exist many problems and difficulties in the process of reform and development. Judging from township and village enterprises themselves， firstly， some localities blindly embarked on projects of general-purpose industries， started new projects and engaged in low-level repetitive construction， structure of industries and products was not rational and distribution of enterprises was over-dispersed； secondly， property rights of a number of enterprises have not been clearly defined， there is no distinction between the government and the enterprises， the mechanism is weak， causing loss of collective assets； thirdly， some enterprises exercise extensive management， their operations are unsatisfactory， there are heavy debt， high material and energy consumption， serious danger of occupational illnesses and hidden causes of accidents， poor product quality and economic efficiency； fourthly， there are serious cases of environment pollution， waste of resources and squandering of cultivated land by a number of enterprises. Viewed from the external environment， there is lack of understanding of the great significance of the development of township and village enterprises， lack of support and lack of strong measures in some localities and departments where policies are not in place and the development of township and village enterprises has up till now not been placed in an important position； in quite a number of localities there has been irrational overburdening of township and village enterprises， there exist universal phenomena of unjustified financial levies， charges， penalties and fund-raising； still there are certain localities and departments engaging in arbitrary transfer of the assets of township and village enterprises， changing the nature of ownership of enterprises and infringing on the legitimate rights and interests of the enterprises； some localities indiscriminately cut and merged administrative departments of township and village enterprises. In particular， there exist quite a few difficulties in the building of administrative organs at the township and village level where management power is weak and the ranks unstable. In addition， there are great imbalances among regions and there are still quite a big gap in the development between the eastern regions and the central and western regions. These problems of township and village enterprises in the process of reform and development warrant great attention and must be resolved in a serious manner.

II. GOALS， TASKS AND MAJOR MEASURES FOR THE DEVELOPMENT OF TOWNSHIP AND VILLAGE ENTERPRISES IN THE NEXT FIFTEEN YEARS

Township and village enterprises constitute an important point of growth full of vigor in China's rural economy and national economy and shoulder heavy， new historic responsibilities in the process of implementation of

It is not only necessary but also completely possible that township and village enterprises achieve a new and bigger development and upgrading. During the past dozen of years， township and village enterprises have acquired considerable strength， accumulated rich experiences and provided the foundation for development and upgrading； rich resources of farm produce， minerals and large pool of surplus labor in China's rural areas have provided the necessary conditions for development and upgrading； the growing enthusiasm and creativeness of hundreds of millions of peasants to eradicate poverty， become rich and strive for well-to-do living standards is the powerful inherent driving force for development and upgrading； implementation of

In the next fifteen years， township and village enterprises should achieve faster growth in economic aggregate and bigger upgrading in overall standards. During the Nineth Five-Year Plan period， the average annual growth rate of increment value of township and village enterprises can be maintained at around 15%. Efforts should be made to realize the increment value of township and village enterprises to the tune of RMB 3，000 billion Yuan by the year 2000， increment value of industries amounting to RMB 2，000 billion Yuan， shipped value of export commodities reaching around RMB 1，000 billion Yuan， newly-emplaced rural surplus labor force 30 million people， and number of persons engaged reaching 160 million people. Township and village enterprises should continue to maintain a good momentum of development by 2010.

To realize the a fore-said goals and tasks， the general guidelines for the reform and development of township and village enterprises are： taking Deng Xiao-ping's theory of building socialism with Chinese characteristics and the Party's basic line as the guidance， putting into practice seriously the spirit of the Fifth and Sixth Plenary Sessions of the Fourteenth Central Committee of the Communist Party of China， implementing

Development of township and village enterprises should， in real earnest， shift to the track of relying on scientific and technological advancement and improving the quality of laborers， improve scale economic efficiency and technological advancement efficiency， scientific management efficiency and optimized structure efficiency， embarking on a path of development with less input， more output， good quality and high efficiency. The eastern regions should lay stress on improvement， seeking development in improvement； the central and western regions should put emphasis on development， seeking improvement in development.

（1） Keep on deepening enterprise reform. Deepening reform of township and village enterprises must adhere to the standards that they are in the interest of the development of the national economy， the enhancement of the comprehensive national power and improvement in the living standards of the people， and earnestly carry out the principle of “rendering active support， providing correct guidance， summing up experiences and gradual standardization” laid down by the Central Committee of the Communist Party of China and the State Council， respect the practice， creation and options of peasants， actively make explorations and innovations and lay stress on practical results. There can be diversified forms of reform. Enterprises having the required conditions can form limited liability companies， companies limited by shares or enterprise groups； ordinary collective enterprises can perfect the contracting system or practise cooperative share system； small， low-profit and profit-losing enterprises can go through reorganization of through leasing， auction， association， merger and bankruptcy. No matter which form is followed， the following points must be adhered to： first， separation of functions and responsibilities of the government and the enterprise with the government shifting from direct administration of production and business operations to macro planning， guidance， administration， supervision， coordination and services， turning enterprises into main body of the market within dependent operations， being responsible for their own gains and losses， self-restraining and self-development. Second， optimization of internal operational mechanism and incentive mechanism of enterprises to give full play to the enthusiasm of owners， operators and workers， enabling them to make greater contributions to the development of enterprises on their own initiative. Third， assurance of value preservation and increase of collective assets of enterprises and assurance of no loss. In recent years， many township and village enterprises have adopted the cooperative shares system which is effective in enhancing the vitality of enterprises and improving economic efficiency. There can be diverse forms of cooperative shares system. Cooperative shares system can be followed by newly-established township and village enterprises including those jointly run by peasants themselves and those cooperatively run by peasants with joint investment with the state-owned enterprises， collective township enterprises and enterprises with foreign investment. Transformation from individually-owned， privately-run and joint partnership enterprises to cooperative shares system should be encouraged and guided. Reorganization of rural collective enterprises into enterprises of cooperative shares system by adopting the practice of increment and expansion of shares which is instrumental to increase of capital of enterprises and should be encouraged； in the meantime， various forms can be explored to revitalize the stock. The practice of privatization of collective assets is impermissible and should be rectified by doing a good job. A thorough appraisal of properties and funds of existing collective assets of township and village enterprises should be conducted， their property rights registered and system of audit supervision set up to earnestly prevent the loss of collective assets.

（2） Promote in a big way scientific and technological advancement. Township and village enterprises should keep on increasing the rate of contribution of scientific and technological advancement to economic growth by actively adopting new technologies， new techniques， new equipment and new materials， accelerating technical transformation， continuously develop new products and make products with advanced technology. New input by township and village enterprises of all localities especially by those of the eastern regions should mainly be used for their technical transformation and equipment renewal. Keep on carrying out technical transformation and innovation depending on the existing scientific research and development institutions. Encouragement should be given to those enterprises that have the required conditions to set up their own scientific research institutes to keep upgrading their capabilities in digestion， absorption and innovation of technologies. Accelerate the commercialization of scientific and technological achievements， actively make use of patented technologies and extend advanced suitable technologies. Enterprises having the required conditions should develop new high-tech industries in a big way. Economic and technological cooperation of various forms should be carried out with the state-owned enterprises， scientific research institutions and universities and colleges. Actively promote integrated operation of science， industry and trade to realize complementarily of one another's advantages， joint development and improvement.

Great importance should be attached to the training and induction of qualified personnel to train a huge army of qualified personnel for township and village enterprises. The upbringing and training of a vast number of operators and administrators of township and village enterprises who have high political quality， strong pioneering spirit， are good at business operations and management and dedicated to the cause should be taken up as important work. Various forms and channels should be used to train qualified applicable personnel who can apply their knowledge and stay on in township and village enterprises through vocational training schools， short training courses and community-run schools to step up vocational training of rural youth and keep on expanding the reserve pool of qualified personnel for township and village enterprises. Effective measures should be taken to actively induct talents of various types. Strive to create an environment and mechanism favorable to the upbringing， induction， employment and protection of qualified personnel.

（3） Earnestly strengthen operational management. Scientific management should be treated as a key link in the survival， development and transformation of the mode of economic growth of enterprises， and enterprises should be guided to improve their internal functions in a down-to-earth manner. Actively promote systematic， standardized and scientific enterprise management. Handle well base-level management， specialized management and on-the-spot management of enterprises. Actively promote modern management， and raise scientific management level. Formulate sound rules of management which should be strictly enforced. Establish and perfect rules of democratic management and supervision of enterprises， and suggestions of broad masses of workers and staff members should be heeded on major issues of enterprises. Improvement in quality and efficiency should be brought about through enhanced management and reduction of material and energy consumption. Attention should be paid to draw on methodology of advanced management at home and abroad. Innovations should be continuously made in the contents， methods， means and measures of enterprise management and scientific management system established. Quality control should be singled out to be handled well， quality consciousness enhanced， total quality control practised and quality assurance system established and perfected. Accounting management should be handled earnestly to reduce cost and improve the rate of turnover of funds and efficiency in fund utilization. Keep to sound labor and personnel management and labor discipline should be strictly enforced. Strive to do a good job of production safety and vocational health， establish sound responsibility system of safety target management and mechanism of safety supervision to create a good environment for production and work.

（4） Strive for optimization of industries and products structure. The structure should be adjusted rationally in the light of market demand， state industrial policy and local resources dominance. Continue to pursue simultaneous development of diverse industries， develop dominant industries and products， actively stimulate the primary industry， adjust and optimize the secondary industry and accelerate the development of the tertiary industry to promote coordinated development of the primary， secondary and tertiary industries in rural areas. Efforts should be made to establish intensive agro-enterprises. Particular attention should be paid to the exploitation of resource dominance of farm produce and by-products， effect a big development of processing industry of farm produce and by-products and storage， refrigeration and transportation， realize integration of farming， culture and processing， integration of production， supply and marketing， integration of agriculture， industry and commerce and integration of trade， industry and agriculture， stable economic links are established between peasants and enterprises forming community of interests， building a bridge between farm households and the market， forming the pattern under which the market leads the “dragon head”（driving force）， the “dragon head” builds up bases and peasants are linked up with the bases， thus stimulating enterprise-like， intensive and industrialized management of agriculture. This will help reduce the natural risks and market risks for agriculture， help resolve the problem of low efficiency in agriculture， and promote increase in value， profit and benefit of farm produce， form a be nigh cycle between township and village enterprises and agriculture. Township and village enterprises enjoy unique advantages and have great potential in the development of processing industry of farm produce and by-products. Further reform of the distribution system of farm produce should be carried out and positive encouragement， support and guidance given to township and village enterprises especially those in major food grain and cotton producing areas to take the processing industry of farm produce and by-products as a strategic focus bearing an orientation which should be firmly grasped and implemented with effectiveness.

Investment structure should be optimized and new investment should mainly be used in the technological transformation of existing enterprises and development of new products. Efforts should be made to proceed from a high starting point， high efficiency， low consumption and low pollution， and avoid blindness when embarking on new projects， not to engage in low-level repetitive construction. Actively apply modern technologies in the transformation of such traditional industries as raw materials， energy， construction materials， agro-industry， light industries and textiles； in localities where there are required conditions， such base and pillar industries as electrical-mechanical， chemical and metallurgical industries should be developed from a higher starting point， and guidance provided to township and village enterprises for the development of new high-tech industries on priority basis. Efforts should be made to adapt to changes in domestic and world markets， accelerate the adjustment of structure of products， increase varieties and specifications， improve the quality and grade of products， strive to create brand name products so as to enhance market competitiveness. Keep on developing new products and brand name and unique best quality products which are low in resource consumption， environment-friendly， high in increment value and made with advanced technology. Actively develop such tertiary industries as commerce， communications and transport， food and beverages， tourism， services and information. Bring into play the advantages of township and village enterprises， make use of domestic and international resources， domestic and world markets， greatly develop outward-oriented economy， adjust the structure of export products and improve their quality and grades.

（5） Persevere in the simultaneous development of big-， medium- and small size enterprises. Keep on optimizing the organizational structures of township and village enterprises， actively foster big- and medium-size township and village enterprises， develop scale economy and guide a number of enterprises to develop in the direction of large-scale， high-tech and export-oriented enterprises. Continue to promote horizontal economic and technological association， encourage formation and founding of various types of transregional trans trade and trans ownership enterprise groups integrating production and business operations， sci-tech development and domestic and foreign trade with backbone enterprises as the driving force supported by brand products and with assets as the links to improve scale merit. The numerous medium- and small-size township and village enterprises should take the road of small， specialized production and socialized coordination. Township and village enterprises must enhance their market adapt ability and competitiveness.

（6） Actively guide development in concentrated belts. Great attention should be paid to the transformation from the previous dispersed layout to relatively concentrated belts in the development of township and village enterprises which should be interdependent between industrial sub-areas and building of small townships， and they should promote each other to seek joint development so as to economize land， reduce input into public facilities， protect and build up the environment， improve the clustering effect， stimulate the development of the tertiary industry and increase the capacity for employment. All localities should have overall planning， formulate corresponding incentive policies， strengthen the infrastructure， guide township and village enterprises in organic combination with the building of industrial sub-areas and small townships to promote coordinated socio-economic development.

（7） Continue to promote east-west cooperation. Township and village enterprises in the eastern regions which have a good foundation should bring into play the edge in funds， qualified personnel， management and regional position， develop in a big way technology-intensive and capital intensive industries and outward-oriented economy， exert efforts to push the enterprises to expand scale， upgrade technical standards and product grade and gradually shift a number of labor-intensive resource-processing industries to the central and western regions under the criteria of optimal industrial and product structures. The central and western regions should bring into full play their advantages in natural resources and labor power， greatly develop resource-processing and labor-intensive industries， raise levels of deep processing and fine processing， raise the added value of products and accelerate the pace of development. The eastern， central and western regions must adhere to the principle of complement arity of each other's advantages and mutual benefit and reciprocity， enhance association and coordination， fully implement demonstration projects of east-west cooperation with each displaying its own advantages in joint development and cut a path of joint development hand in hand with east leading west and west pushing east.

（8） Attache importance to the protection of resources and environment. Township and village enterprises must resolutely implement the sustainable development strategy， pay great attention to the rational development and exploitation of resources， protection of cultivated land and environment， and must not indiscriminately occupy cultivated land， destroy resources and must not take to the road of pollution first and treatment later. Rationally develop and exploit mineral resources. Those township and village enterprises engaging in exploitation of resources must enter into registration in accordance with law and obtain a license， and carry out standardized operations. The rules of examination and approval for the use of land must be strictly observed. Where there is waste land and land with inferior soil which can be made use of， no cultivated land and land with good soil should be occupied. Construction or development of projects having adverse effects on the environment by township and village enterprises must strictly observe the rules of environmental impact evaluation. No construction or development should be undertaken without authorization without conducting evaluation or without approval of the evaluation report. Pollution prevention and treatment facilities in the construction project must have simultaneous design， construction and operation with the main body. No production technique and equipment with serious pollution unequivocally prohibited by the State should be used， and no production and business operations of products causing serious pollution unequivocally prohibited by the State should be undertaken. Emission of pollutants exceeding the prescribed standards of the State and localities must be treated within a certain time period. Those failing to meet the standards for treatment on expiration of the time limit should be firmly shut down， suspended of operations， amalgamated with other enterprises or switched to the manufacture of other products.

III. CONTINUE TO CREATE A FAVORABLE POLICY ENVIRONMENT FOR THE DEVELOPMENT OF TOWNSHIP AND VILLAGE ENTERPRISES

Since the implementation of the policy of reform and opening up， the series of policies of the Party and the State concerning rendering active support to township and village enterprises have greatly motivated the enthusiasm and creativeness of the broad masses of peasants and strongly promoted， guided， protected and standardized the reform and development of township and village enterprises. All regions and departments must earnestly implement those policies and carry out the policy of “rendering active support， making rational planning， providing guidance according to conditions of different categories and enforcing administration in accordance with law”， and strive to create a favorable policy environment for the reform and development of township and village enterprises.

（1） Persevere in the joint development of various economic elements with collective economy as the leading factor. Development of township and village enterprises should continue to follow the principle of joint development of “multi-wheel drive and multi-track operation” run by the xiang（town）， village （including villagers' groups）， associated households（including peasants' cooperatives） and individual households（namely individually operated and private-owned）， as well as joint ventures， cooperative ventures and associated enterprises. Diverse forms should be adopted to develop the collective economy. Various cooperative enterprises run by peasants， so long as they keep public accumulation funds and practise “to each according to his work” and democratic management， are all new types of economy with socialist collective ownership which deserve enthusiastic support. Actively explore effective forms for the realization of the collective economy and encourage the development of enterprises with cooperative shares system and shares system. Encourage and guide the development of individually-operated enterprises， private-owned enterprises， joint ventures， cooperative ventures and associated enterprises in rural areas. Ownership rights and decision making rights in business operations of township and village enterprises shall be protected in accordance with law and no unit and individual shall infringe on or take over the properties of township and village enterprises.

（2） Encourage and give key support to the economically less developed regions， old revolutionary areas and minority nationality regions to develop township and village enterprises. Township and village enterprises and other economic organizations in economically developed regions should be encouraged to adopt various forms in support of the economically less developed regions， old revolutionary areas and minority nationality regions in the establishment of township and village enterprises. Special-purpose loans， discount interest loans for east-west cooperative demonstration projects， discount interest loans for township and village enterprises in minority nationality regions and development loans for poverty eradication should all be in place in full amount on time， and should be increased year by year. Whoever going to establish township and village enterprises in economically less developed regions， old revolutionary areas and minority nationality regions will be entitled to the preferential policies laid down by the State and local governments.

（3） Encourage and support township and village enterprises to raise funds for development through diverse forms and multi-channels as prescribed. Township and village enterprises must first of all attache importance to their own accumulation， perfect the development mechanism of self-accumulation， and the after-tax profit of enterprises should mainly be used for the purpose of expansion of reproduction. Overgrowth of consumption funds should be strictly controlled. The range of growth of workers' and staff members' income should not exceed the range of improvement of labor productivity of enterprises. Adhere to the coexistence of various forms of distribution with “to each according to his work” as the main form and the difference in the distribution of income between the operators and workers and staff members should not be too great. Expand channels for the accomodation of funds， tap into sources of funds， positively and rationally introduce foreign funds and adopt diverse forms to absorb idle funds of society in accordance with relevant regulations of the State. Encourage peasants to take part in direct accomodation of funds in forms of shareholding through fund-raising， joint ventures， cooperative ventures and co-partnerships in the founding of enterprises.

（4） Encourage and support the development of township and village enterprises by employing credit and financial means. All banks， credit unions and other non-bank financial institutions should， in accordance with the principle of “treating the cases in the light of different circumstances， providing support on the basis of merit and giving priority to efficiency，” actively support the development of township and village enterprises and increase credit input year by year. Governments at all levels should arrange a certain amount of financial turnover fund every year to give key support to the technological transformation， development of new products， foreign exchange earnings through export and processing of farm produce and by-products. Encourage and support People's Governments at all levels to set up township and village enterprise development funds in accordance with

（5） Continue to provide tax support to township and village enterprises in accordance with provisions of the State. Township and village enterprises must pay taxes in strict accordance with law and make full payment of taxes on time. All tax reduction and exemption policies formulated by the State in support of or applicable to township and village enterprises should be earnestly implemented. For township and village enterprises' social expenditure for the purpose of subsidizing and building agriculture and subsidizing the rural areas， corresponding reduction should be made from the payable tax amount. Township and village enterprises in the central and western regions so long as their products are of high quality and sell well and there are reliable measures for pollution treatment and resources and environment protection， can be exempted from the regulatory tax for fixed asset investment direction not to be subjected to the restrictions of the scale of the projects. Township and village enterprises in old revolutionary areas， minority nationality regions， border regions and poor areas determined by the State can be reduced of or exempted from enterprise income tax within a fixed time period and enjoy tax preferences prescribed by the tax law.

（6） Actively encourage and support the training of qualified personnel. Training of qualified personnel for township and village enterprises should be integrated into the overall education development plan at all levels. All types of institutions of higher and secondary education should actively create conditions to provide continuing education and qualifications education for workers and staff members of township and village enterprises to improve the scientific， technical and cultural quality and professional skills of workers and staff members. Encourage co-founding of township and village enterprise colleges（departments） and specialities in diverse forms with the support of existing institutions of higher and secondary education and other training institutions， and governments at all levels should render support in funds. Qualifications of graduates from qualified township and village enterprise colleges and schools can be recognized with the approval of the departments of education administration. Adopt strong measures to continue to encourage the flow of all types of qualified personnel to township and village enterprises. Administrative， personnel and labor departments of township and village enterprises should conduct evaluation and determination of technical titles and appraisal of technical skills of workers and staff members with reference to relevant provisions of the State and issue certificates of qualifications for specialized technical positions and certificates of professional qualifications recognized by the State.

enterprises which have high efficiency and earn more foreign exchange in credit， energy， qualified personnel and technologies. Those township and village enterprises which meet the required conditions should be given import-export operations right， and standards for the grant of import-export right for township and village enterprises in the central and western regions should be appropriately relaxed. Encourage and support those township and village enterprises that have low export cost and earn more foreign exchange in the use of export product licenses. Continue to step up the construction of export commodities bases of the integrated trade， industry and agriculture entities， discount interest loans for integrated trade， industry and agriculture entities should be granted on the basis of merit， and all localities must ensure that the matching funds are in place. Guide and encourage township and village enterprises to actively and rationally introduce foreign funds， advanced technologies and management methods. Departments of township and village enterprise administration and departments of foreign trade and economic cooperation at all levels should step up guidance， administration， supervision， coordination and services with regard to “three-capital” township and village enterprises（i.e.， those run with foreign funds only， Chinese-foreign joint ventures and cooperative enterprises）。

（8） Accelerate technological transformation and sci-tech development. For projects of technological transformation， development of new products and sci-tech development of township and village enterprises， the departments concerned should give necessary support. Intensify step by step efforts in loan and investment support for big- and medium-size township and village enterprises that meet the required conditions and engage in processing of farm produce and by-products， agro-industries and earn foreign exchange through export. Funds required for development of new products and sci-tech development should be listed and expended in terms of actual amount in accordance with provisions. The annual rate of depreciation of fixed assets of township and village enterprises should be appropriately increased in accordance with relevant provisions of the State. Township and village enterprises should increase input of sci-tech funds and accelerate the pace of sci-tech advancement.

（9） Encourage and support treatment of environment pollution. The departments concerned should give support to township and village enterprises in expenses required for pollution treatment and protection of the ecosystems. Pollutants discharge fees of township and village enterprises shall be collected in strict accordance relevant provisions of the State. Supervision of collection， payment， management and use of the pollutants discharge fees should be stepped up to ensure that they focus on the treatment of major pollution sources of township and village enterprises， subsidization of management， education， investigation and monitoring in environment protection of township and village enterprises.

（10） Lighten in real earnest the burden of township and village enterprises. Legitimate rights and interests of township and village enterprises should be protected in accordance with law and all acts of exacerbating the burden of township and village enterprises should be firmly curbed. No departments and units shall indiscriminately collect fees， impose unjustified financial levies and arbitrary penalties and indiscriminately raise funds， nor shall they， in any form and name， seek sponsorship， engage in evaluation and contest to exacerbate the burden of enterprises. Village cadres must not indulge in indiscriminate expenditure from rural collective enterprises. Investigations and settlements should be effected with regard to the burden of township and village enterprises for the determination of rational items and gradual realization of aggregate control and restrictions in items and amount. Departments of township and village enterprise administration shall， in conjunction with departments of disciplinary inspection， supervision， planning， finance and price， work out specific measures for supervision and control. Those failing to carry out the directives and in violation of prohibitions shall be seriously investigated and dealt with.

All regions and departments should formulate corresponding policy measures in connection with the new situation and new problems emerging from the reform and development of township and village enterprises.

IV. EARNESTLY STRENGTHEN LEADERSHIP OF TOWNSHIP AND VILLAGE ENTERPRISES

To achieve a great development of township and village enterprises is a major strategic decision of the Central Committee of the Communist Party of China and the State Council taking into consideration the state of the nation. Party committees and governments at all levels should continue to take the development of township and village enterprises as a strategic focus in bringing prosperity to the rural economy and the entire national economy and place it on the agenda as an important item. Main Party and government leaders at all levels must attend to affairs related to township and village enterprises in person and make overall arrangement by integrating township and village enterprises into the overall plan for national socio-economic development. All localities should regularly study the new situation and new conditions prevailing in township and village enterprises， and earnestly overcome the difficulties and resolve the problems in the process of reform and development.

Great imbalances in economic development exist in different regions in China and conditions vary greatly. Guidance should be provided to township and village enterprises in different regions with different characteristics according to categories and should under no circumstances stick to rigid uniformity and rush headlong into action or indulge in formalism. Stress should be laid on practical results to see to it that practical work is done and measures are seriously implemented in practical work. Under the criteria of basing on the local resources advantages， development plan for township and village enterprises should be worked out with practical goals and workable measures. Step up guidance to reform， correctly maintain the orientation of reform， formulate policy measures and keep on deepening the reform of township and village enterprises. Serious study， repeated authentication， scientific evaluation and direction of optimal capital input of new projects should be undertaken to combine the development of township and village enterprises with that of agriculture and the state-owned enterprises and foster the pillar industries， forming regional characteristics.

The practices and experiences of all localities have demonstrated that development of township and village enterprises must adhere to the series of policies of the Party for the rural areas， respect peasants' initiatives and fully motivate the enthusiasm and creativeness of the broad masses of peasants； persevere in deepening the reform， perfect the operations mechanism and actively make explorations and innovations； adhere to opening up to the outside world， actively open up the domestic and international markets and strive to expand the space for survival and development； abide by the spirit of intensive and pioneering effort and scientifc approach， be good at seizing the opportunities and bold to combat difficulties； keep relying on science and technology， respect knowledge and talents and keep on improving one's own quality； adhere to the principle of proceeding from reality in the light of local conditions and take to the road of development with one's respective characteristics. With the growing deepening of reform and opening up and development of practices， all regions and departments concerned should keep on summing up fresh experiences， setup new role models， help grass-roots level and township and village enterprises build up a good leadership， find a good path and adopt good methods. Good mechanisms of township and village enterprises and rich experiences accumulated by them should be further perfected and extended.

Importance should be attached to the strengthening of the building of the administrative organs and ranks of township and village enterprises. Departments of township and village enterprise administration at all levels which are the integrated functional departments in charge of township and village enterprises of the People's Governments at all levels must fill up their strengths in the light of their work requirements， select and appoint capable cadres to strengthen the administrative organs of township and village enterprises， provide necessary work conditions， earnestly help resolve practical problems to ensure stability of the ranks of cadres. Administrative organs at the township and village level constitute the grass-roots level and the most crucial link， all localities should， in accordance with the spirit of

Township and village enterprises must adhere to the simultaneous building of socialist material and spiritual civilizations. Step up in real earnest the Party building of enterprises， establish and perfect Party organizations， Bring into full play the role of Party organizations as a bulwark and the pioneering and model role of Communist Party members. Actively train and admit those backbone business staff and backbone technical personnel who meet the qualifications into the Party organizations. Step up in good earnest ideological， moral and cultural building， improve enterprises' ideological and political work， seriously carry on education in Party's basic line， basic policies and basic state of the nation， strengthen the building of enterprise culture， carry out activities of creating civil township and village enterprises and arm the broad masses of workers and staff members with socialist， patriotic and collective ideas. Carryon in-depth education in plain living and hard struggle， being diligent， frugal and enterprising， changing prevailing habits and customs， as well as in discipline and law-abiding， professional ethics， science and culture， keep improving ideological moral quality and scientific and cultural level of workers and staff members， train and bring up a force of workers and staff members with high ideals， moral integrity， a better education and a strong sense of discipline， thus providing strong spiritual drive， intelligent support and ideological guarantee for the reform and development of township and village enterprises.ligent， frugal and enterprising， changing prevailing habits and customs， as well as in discipline and law-abiding， professional ethics， science and culture， keep improving ideological moral quality and scientific and cultural level of workers and staff members， train and bring up a force of workers and staff members with high ideals， moral integrity， a better education and a strong sense of discipline， thus providing strong spiritual drive， intelligent support and ideological guarantee for the reform and development of township and village enterprises.ligent， frugal and enterprising， changing prevailing habits and customs， as well as in discipline and law-abiding， professional ethics， science and culture， keep improving ideological moral quality and scientific and cultural level of workers and staff members， train and bring up a force of workers and staff members with high ideals， moral integrity， a better education and a strong sense of discipline， thus providing strong spiritual drive， intelligent support and ideological guarantee for the reform and development of township and village enterprises.ligent， frugal and enterprising， changing prevailing habits and customs， as well as in discipline and law-abiding， professional ethics， science and culture， keep improving ideological moral quality and scientific and cultural level of workers and staff members， train and bring up a force of workers and staff members with high ideals， moral integrity， a better education and a strong sense of discipline， thus providing strong spiritual drive， intelligent support and ideological guarantee for the reform and development of township and village enterprises.ligent， frugal and enterprising， changing prevailing habits and customs， as well as in discipline and law-abiding， professional ethics， science and culture， keep improving ideological moral quality and scientific and cultural level of workers and staff members， train and bring up a force of workers and staff members with high ideals， moral integrity， a better education and a strong sense of discipline， thus providing strong spiritual drive， intelligent support and ideological guarantee for the reform and development of township and village enterprises.ligent， frugal and enterprising， changing prevailing habits and customs， as well as in discipline and law-abiding， professional ethics， science and culture， keep improving ideological moral quality and scientific and cultural level of workers and staff members， train and bring up a force of workers and staff members with high ideals， moral integrity， a better education and a strong sense of discipline， thus providing strong spiritual drive， intelligent support and ideological guarantee for the reform and development of township and village enterprises.