Preface
Part I Planning Background
Ⅰ. Sound Foundation
Ⅱ. Development Trends
Ⅲ. Historic Opportunities
Ⅳ. Main Challenges

Part II Guiding Principles and Development Targets
Ⅰ. Guiding Principles
Ⅱ. Main Targets
Ⅲ. Priorities

Part III Development Focus and Policy Orientation
Ⅰ. To Transform Economic Growth Mode
(Ⅰ).To promote industrial optimization and upgrading
(Ⅱ). To guide rational distribution of industries
(Ⅲ). To actively develop cycling economy
(Ⅳ). To create a sound environment for development
Ⅱ. To Expand Social Public Service
(Ⅰ). To prioritize the development of education undertakings
(Ⅱ). To intensify medical and health service
(III). To promote flourishing development of cultural and sports undertakings
(IV). To maintain public security
(V). To improve public service efficiency
III. To enhance infrastructure
(I). To construct comprehensive traffic system
(II). To further improve energy supply system
(III). To guarantee water supply
(IV). To improve other infrastructure
IV. To construct new types of socialist rural area
(I). To speed up the rural economic development
(II). To push forward urban planning and construction
(III). To improve public service facilities in rural areas
(Ⅳ) To channel the employment transfer of farmers
(Ⅴ) To deepen rural comprehensive reform
(ⅤI) To complete the favourable policy mechanism
Ⅴ To optimize urban functional configuration
(Ⅰ) To push forward the urban development with order
(Ⅱ) To put into place the functional positioning of the districts and townships
(Ⅲ)To protect the city’s historical and cultural sites
(Ⅳ)To improve the urban management and operation efficiency
Ⅵ. To strengthen the construction of social harmony
(Ⅰ) To take every measure to increase employment
(Ⅱ) To expand the social security coverage
(Ⅲ) To build harmonious communities, villages and towns
(Ⅳ) To strengthen democratic legal system construction
(Ⅴ) To improve city’s civilization level
Ⅶ. Population development, resource and environment
(Ⅰ) To promote healthy population development
(Ⅱ) To build resource saving society
(III). To build up environment-friendly city
VIII. Scientific and technological innovation and human resources development
（Ⅰ）Build a commanding point of innovation in Zhongguancun.
（Ⅱ）To make major innovative breakthroughs
（Ⅲ）To improve local innovation system
（IV）To tap into the talent pool in Beijing
Ⅸ Institutional reform and managerial innovation
（Ⅰ）To deepen reform of administration system
（Ⅱ）To arouse the initiative of major market players
（Ⅲ）To promote the development of the market system
（Ⅳ）To improve the mechanism of economic adjustments
X. Regional cooperation and opening up
(I) To deepen the cooperation among Beijing, Tianjin Municipal and Hebei Province
(II) To expand domestic economic cooperation
(III.) To enhance the degree of opening up
(IV) To strengthen exchange and cooperation with international community

Part IV To do a good job in hosting the 2008 Beijing Olympic Games
I. To push forward the initial preparation for the Olympic Games in a down-to-earth manner
II. To organize and arrange affairs during the Olympic Games in a delicate manner
III. To maintain the stable development of the post-Olympic period

Part V. To launch the development of the focal New Towns
I. the Overall requirements
II. Shunyi New Town
III. Tongzhou New Town
IV. Yizhuang New Town
V. Implementation guarantee

Part VI. Planning Implementation

I. Establishment of supplementary policies
(Ⅰ) Guide market demand actively
(Ⅱ) Scientific arrangement of fiscal budget
(Ⅲ) To rationally adjust and control the land supply
(Ⅳ) To effectively utilize the government storage
(Ⅴ) To strengthen the coordination and implementation of policies

Ⅱ. To implement the exclusive plans
(Ⅰ) Municipal exclusive planning
(Ⅱ) Development plans of the districts and townships
(Ⅲ) To coordinate the plans and links

Ⅲ. Implementation of significant programmes
(Ⅰ) To implement a series of basic projects to increase the management efficiency
(Ⅱ) To organize a series of breakthrough programmes to promote the innovation capacity
(Ⅲ)To construct a series of major programmes to increase the service functions
(Ⅳ) To arrange a series of convenience for people projects for the convenience of the citizens
(Ⅴ)To implement a series of reform programmes to improve the system and mechanism

Ⅳ. Implementation management of the programme
(Ⅰ)To make overall plans for the process arrangement
(Ⅱ)To optimize the examination and evaluation
(Ⅲ)To strengthen implementation of monitoring
(Ⅳ)To facilitate rotating linkage
(Ⅴ). To approve adjustment of program implementation

Preface

The Eleventh Five-Year Program period, from 2006 to 2010, is a key period in which Beijing will seize the strategically important opportunity of development during the first two decades of the 21^st century, and by doing so realize the concept of “New Beijing, Great Olympics.” This period is a critical transition in the municipality’s modernization process. The Beijing Outline of the Eleventh Five-Year Program for National Economic and Social Development is the first five-year program after the Central Committee of the Communist Party of China (CPC) put forward the concept of scientific development and the major strategic theory of building a harmonious society. It is also the first five-year program worked out after the State Council approved the Beijing Master Plan (2004-2020), and an important plan for the country’s capital to build a comprehensive affluent society. The Program brings forward the strategic targets, focus and policy orientation of the economic and social development of Beijing during the 11^th five-year period, reflecting the guidelines and decision intention of the Beijing municipal committee and government. The Program is an important basis for the city’s government departments at all levels to perform their duties, draft annual implementation plans and make various policies and measures in accordance with the law. Moreover, the Program serves as a call to action for all people of Beijing to work together for progress.

The Eleventh Five-Year Program is formulated on the basis of the following three documents: (1) Proposal of the CPC Central Committee for the Formulation of the Eleventh Five-Year Program for National Economic and Social Development; (2) Proposal of the CPC Beijing Committee for the Formulation of the Eleventh Five-Year Program for National Economic and Social Development; (3) The State Council’s approval to the Beijing Master Plan (2004-2020).

Part One Programming Background

I. Sound Foundation

In February 2001, Outline of the Plans for the Tenth Five-Year Plan for National Economic and Social Development for Beijing Municipality was reviewed and approved at the 4^th session of the 11^th Beijing Municipal People’s Congress. Five years since then, under the leadership of the CPC’s Central Committee and the State Council, the whole municipality have followed the guidance of Deng Xiaoping Theory and the Three Represents and conscientiously implemented the concept of scientific development, centering upon the strategic blueprint of “New Beijing, Great Olympics,” institutional innovation, restructuring, environment optimization and comprehensive development. As a result, the major objectives and missions have been successfully accomplished for the Tenth Five-Year Plan.

New heights in economic developments: Average GDP growth rate registers 11.9 percent-; per capita GDP by permanent residents exceeds 5000 USD; economic structure is gradually optimized; the modern service industry becomes modernized, appearance of new and high-tech industry, modern manufacturing and agriculture witness a marked progress in line with the characteristics of Beijing’s capital functions; the proportion of the tertiary industry climbs up to 67.7 percent; economic growth is improved in terms of quality and efficiency; average annual growth of local financial revenues is more than 25.3 percent; and total energy and water consumption per 10,000 yuan (about US$1,250) GDP sees an average decline of 5.4 percent and 13.3 percent respectively.

New progress in social development: Science and technology are booming; R&D expenditure of the whole municipality accounts for about 22.1 percent of the GDP; scientific and technological progress is making more and more contributions to economic growth; the education system is gradually becoming well established, with 98 percent of the school age population in senior high school and 53 percent in higher education; the public cultural service is developing steadily, supported by the completion of a series of public cultural facilities of great influences; the public health system and integrated mechanism for disaster relief and emergency have been perfected gradually after the victory over SARS; the Olympic Games preparations continue smoothly; and nation-wide fitness activities are becoming more popular, with competence in competitive sports rising.

New patterns in urban development: Construction has been accelerated on Zhongguancun Science Park, the CBD, the Economy & Technology Development Zone of Beijing and other key functional areas, as important carriers for upgrading capital service functions, attracting high-end industrial conglomeration and expanding economic volume; efforts have been redoubled to coordinate urban-rural and regional development; and suburban infrastructure improvement has been sped up. The urban master plan has been completed and the guiding opinions for district and county function definitions and evaluation indicators have been formulated and implemented. A development pattern is taking shape with diversified features for districts and counties.

There has been an upgrade in the service capability. Accumulated investment in urban infrastructure has amounted to 226 billion yuan (about US$27.5 billion), up 63.5 percent compared with the Ninth Five-Year Plan period. Such major projects as the Fifth-Ring Road, Lianhuachi West Road and Metro Line 13 have been completed. The urban railway traffic mileage has risen to 114 kilometres. Ecological preservation has achieved remarkable improvements, with an urban forest coverage of 50.5 percent. Air pollution control has made obvious progress, as the proportion of days with a second-grade air quality or above reaches 64.1 percent, which is almost 16 percentage points higher than year 2000. Improvements have also been made in natural gas and thermal supply, and sewage and garbage treatment.

There have been new breakthroughs in reforms and opening up. Major progress has been made in administrative system reform, infrastructure construction financing system reform, state-owned assets regulatory system and SOE reforms, rural tax and fee reform, and urban management system. Various new forms of management have been exercised, such as franchising, construction contractor management and public hearing. New breakthroughs have been made in opening up to the rest of the world, while an accumulated US$12.32 billion of foreign capital having been utilized. The environment for development is constantly improving.

In reaching new levels of living standards, the active employment policy has been implemented to keep the urban registered unemployment rate at a comparatively low level; a multi-layer social security system has been initially established; the per capita disposable income of urban dwellers and the per capita net income of farmers has increased annually on average by 10.4 percent and 9.9 percent respectively; the proportion of service consumption has substantially risen, such as education, tourism and fitness, leading to a faster upgrade in consumption structure; and people are heading towards an affluent life.

The completion of the Tenth Five-Year Plan marks a new span in the capital’s development and lays solid foundations for realizing the strategic concept of “New Beijing, Great Olympics” and modernization. Facing the future, we are already standing at a great new height.

II. Development Trends

The 11^th Five-year Period is critical in regard to the city’s efforts to achieve the strategic perception of “New Beijing, Great Olympics,” as well as the city’s modernization process. New trends are emerging in the domestic and international environment as well as in municipal development in the coming five years.

The capital economy is entering a new phase of development. Per capita GDP continues to grow; consumption and industrial structures are continuously upgraded, providing strong impetus for sustained and rapid development of the capital economy; the key to sustained and rapid development lies in the transformation of the growth mode; and emphasis is being placed on the expansion of total economic volume, structure optimization and synchronized upgrading of development quality and efficiency.

People’s lives are richer and more prosperous. With the improvement of material life and the transformation of development concepts, urban and rural residents are demanding more diversified and differentiated consumption; major trends show a better quality of life and the sharing of development opportunities and accomplishments; social fairness is drawing more attention, alongside production and life issues of disadvantaged groups, while promoting overall social welfare.

Scientific and technological progress accelerates industrial upgrading. The new technological revolution is gradually changing traditional economic situations and extending the industrial chain; industrial boundaries cross with each other; value-added parts of the chain and profit distribution have experienced shifts; industries are gradually integrated with each other; innovation becomes the dominant factor that determines the competitive edge, therefore, special attention should be given to indigenous innovation capacity and high-end industries’ development while promoting the overall industrial optimization and upgrading.

Market opening speeds up the formation of a new pattern of development. With the development of the market economy and further opening up, domestic and foreign economies have closer contact and interdependence. Cooperation and win-win on the basis of market competition is becoming a new tendency. Institutional environment has become the crucial factor that determines the element flow and development vitality. It is necessary to maintain traditional advantages and give more attention to optimize the development environment and regional economic cooperation with institutional innovation at its core. 

Urban development enters the crucial period of strategic adjustment. The general development of direction and functional allocation framework of the capital city has been determined, and the city service functions and basic strength have been preliminarily set up. The key now is to foster an effective guidance mechanism to promote the shift in strategic focus towards urban development. It is necessary to focus more on opening service function extension and resource allocation optimization while improving the general service level.

Social structure continues to undergo intensive transformation. The scale of population flow across regions is on the rise; interests of different groups are getting more diversified; information technologies are catalyzing profound changes in people’s values and behavior; the public awareness of participation is continuously strengthened. The key is to set up an effective mechanism of discovery, response and participation to keep social stability and enhance social harmony. It is necessary to focus more on interest balance and coordination while maintaining and promoting general interests. 

III. Historic Opportunities

As the capital, Beijing has the unique advantage of strong intellectual power pool, advanced science, technology and education, rich cultural resources, dense information resources and enormous market potentials, etc. These advantages will help future development through the following elements.

The 2008 Summer Olympics will be held in Beijing. This provides Beijing with a stage to display the charms of China and Beijing, and their relevant business opportunities to the whole world. The Games will help advance the economic and social development of Beijing, develop its urban management, promote all-dimensional, multi-level and broad-caliber exchanges and cooperation between Beijing and the rest of the world, and strengthen the international status and influences of Beijing.

The planning of the metropolitan region covering Beijing, TianjinMunicipality and HebeiProvince has been outlined and implemented. This will promote the strategic adjustment of the national pattern of regional development and lead to a larger range of production factor flows in the metropolitan region and rational allocation of resources. This will also further expand the market and industrial space, give a better play to the capital’s comparative advantages, advance industrial transformation and the adjustment of urban function layouts and alleviate population, resources and environmental pressures.

The country has implemented the strategy of indigenous innovation. This creates new opportunities for Beijing to make full use of its advantages, enhance the innovative service capacity oriented to the whole nation, and develop high-end, highly efficient and highly radiating industries.

International industrial shift has been accelerated. With the deepening of economic globalization, especially high-tech industries and the modern service industry, Beijing has a better opportunity to undertake an international industrial shift, develop headquarter-oriented economy, participate in international competition and upgrade the city’s globalization and comprehensive competitiveness on a higher level.

Ⅳ. Main Challenges

During the Eleventh Five-Year Program period, the municipal development is also constrained and challenged by some unfavorable factors. We should attach great importance to and properly handle these factors.

The conflict between population explosion and resources restriction is exacerbated. Beijing has serious lack of natural resources, whose per capita water resources is only 1/8 of the national average and land less than 1/5 of the average. Energy supply, which mainly relies on imports, is also stringent. In recent years, resource bottlenecks are getting more outstanding, with the rapid expansion of permanent residents.

The growth mode does not fit development requirements. The economic growth is still mainly investment-driven, with insufficient contribution from consumption. The growth mode is not highly intensive, with low competence of innovation and inefficient utilization of resources. The energy and water consumption per 10,000 yuan (about US$1,250) of GDP and land taking are far above that of cities in developed countries.

Urban-rural and regional developments are not coordinated. The issues of farmer, agriculture and rural areas are still urgent; the population and functions in downtown areas are excessively concentrated; places of historic interest need to be further protected; there are great disparities in infrastructure and social public service between downtown and suburban areas, between the plain and mountainous areas, and between the south and north parts of the municipality. 

There is still a long way to go in ecological quality. Restricted by Beijing’s natural ecological conditions as a northern China city and its rapid economic development, fundamental improvement in air quality and water environment is extremely difficult. What is most serious is the dirty and messy environment in the rural areas especially in the urban-rural fringe.

The institutional mechanism is not well consistent with the concept of scientific development. The government reforms and functional transformation are relatively lagging behind; social undertaking reforms are sluggish, there are also problems of low efficiency of SOEs, weak development of small and medium-sized enterprise and non-public sectors. There is an immature market regulatory system in accordance with the socialist market economy, and a defective environment for development.

The capacity to maintain social stability and urban security needs improving. Despite profound changes in social structure, composition and pattern, interest diversification and greater public awareness of rights safeguarding and political participation, the current social governance structure is not ready for these changes. Emergent and uncertain factors of urban security are increasing, posing new challenges for the administration and response capability of government departments at all levels. 

During the Eleventh Five-Year Program period, the capital city faces an environment where opportunities coexist with and outweigh challenges, and which is generally favorable for social and economic development. It is a critical period for Beijing to extensively develop service economy, knowledge economy and cycling economy, accelerate economic structure upgrading and growth mode transformation and optimization. It is an important period to speed up urbanization, enhance Beijing’s city function and quality, actively participate in and boost regional cooperation, and formulate modern international metropolitan framework. It is a new period to build a harmonious society in the national capital on the basis of new conditions and environment to a higher level. The awareness of opportunity and hardship should be strengthened to properly handle various challenges, to focus on economic development with undivided attention and to realize faster and better development of the capital economy.

Part Two. Guiding Principles and Development Targets

I. Guiding Principles

During the Eleventh Five-Year Program period, the whole municipality should follow the guidance of Deng Xiaoping Theory and the important thoughts of Three Represents, fully implement the concept of scientific development to guide the overall socio-economic development. Beijing should seize the great chance of 2008 Olympic Games, fully implement the State Council’s approval to the Beijing Master Plan and strive to adopt a path of scientific development featuring a strong economy, affluent life and sound ecology. We will make efforts to realize the strategic concept of “New Beijing, Great Olympics” and to build an exemplary area characterized by socialist harmony. In the coming five years, the concept of scientific development should be observed in all efforts to the city’s economic and social development.

The following aspects need our attention in the development process:

(I). We should adhere to the development strategy for the capital economy and maintain steady and rapid development. Efforts should be made to develop high-end, highly efficient and highly radiating industries, to perfect the mechanism for implementing the concept of scientific development; to tap, integrate and utilize the advantage resources; to give full play to the market in resource allocation; to optimize the development environment and to realize rapid and sound development of the capital economy. It is also important to address bottlenecks in development, to speed up the transformation of the economic growth mode, to reduce energy consumption, to promote a recycling economy, to accelerate the building of energy-saving and environmentally friendly society and to achieve sustainable development. 

(II). We should adhere to a functional definition of the national capital, an international city, a famous cultural city and a livable city, aiming to improve city building and management. In accordance with the State Council’s approval to the Beijing Master Plan, we should conscientiously perform the duties of “four services;” to raise the service level; to strengthen infrastructure construction and operation management; to perfect the integrated traffic system, energy supply system and water security system, advance pollution controls and ecological preservation; and to improve the living environment and bolster the city’s capacity for disaster prevention and relief and emergency management. Efforts should also be made to improve the city town system, to coordinate the relationship between the protection of the historic and cultural city alongside modernization, to enhance city service functions, to upgrade the city’s capacity and to build Beijing into a livable and modern international city with a developed economy, a prosperous culture, a harmonious society and a sound ecology.

(III). We should adhere to innovation, aiming to build an innovation-driven city. Following the strategies of national rejuvenation through science and education as well as talent, we strive to strengthen the indigenous innovation capacity as the strategic base point for development and the linchpin for industrial restructuring and transformation of the growth mode. We will vigorously implement the innovation strategy by playing the demonstrative role of the ZhongguancunSciencePark and utilizing the innovation resources of multinational R&D centres and institutes of scientific research, institutions of higher education. We will establish and improve a technological innovation system with enterprises as major players, market orientation, and a combination of production, study and research. Moreover, we will try to create an environment for institution, technology, management and indigenous innovation, for the purpose of enhancing the capital’s indigenous innovation capacity and to make a contribution to the strategic objective that China will be one of the top innovation-driven countries by 2020.

(IV). We should adhere to the principle of overall planning and all-round consideration, trying to promote urban-rural and regional coordination. In accordance with the requirements of the city master plan and the function definition of districts and counties, we should intensify categorized guidance, improve industrial layout, help the districts and counties to play out their respective advantages and achieve diversified development. What’s more, we should work to build a mechanism for urban-rural complementation, regional coordination and development planned as a whole, advance the building of new socialist rural areas and accelerate urbanization and the modernization process, especially in major new towns. The municipality will actively participate in pushing forward the economic cooperation in the metropolitan region covering Beijing, TianjinMunicipality and HebeiProvince for coordinated regional development.

(V). We should adhere to the integration of economic, political, cultural and social construction to build a harmonious society in the national capital. It is important to enhance social building and management and promote innovation in the management system. We should aggressively advance the public service system that covers both urban and rural areas, providing fully-fledged functions and rational layout. Moreover, such practical issues such as employment, medical care, schooling, housing, security and other issues closely related to people’s interests should be clearly dealt with. More emphasis should be laid on social fairness, grass-roots work, coordination among reform, development and stability to promote social harmony in the capital through building harmonious communities, towns and villages.

(VI).We should adhere to the Olympics-driven strategy to improve work in the capital. Efforts should be made to practice the concepts of “Green Olympics, High-tech Olympics and People's Olympics” and host a unique and high-level Olympic Games. We should grasp the opportunity to fully upgrade the capacity of sustainable development in Beijing, the level of urban management and the civil quality of the municipal residents. It is important to make full use of the advantages to promote all dimensional, multi-level and broad-caliber opening and leapfrog socio-economic development of the capital. 

II. Main Targets

In accordance with the strategic deployment of “New Three-Steps” in the capital modernization, we should centre upon the strategic concepts of “New Beijing, Great Olympics,” create an innovative, harmonious and livable new Beijing and host a unique and high-level Olympics. We strive for marked improvements in socio-economic development, indigenous innovation capacity, sustainable development capacity, life quality and in creating the best area for harmonious society, establishing the basic framework for a modern international city and laying solid foundations for realizing the strategic objectives of “New Three-Steps.”

(I). Remarkable improvement in economic development. The capital economy grows steadily and rapidly. On the basis of structure optimization, efficiency improvement and resource consumption reduction, the annual GDP growth rate registers at 9 percent, and by 2010 per capital GDP will double from the 2000 figure. Financial revenue witnesses an annual average increase of 12 percent. The economic structure geared to the resource features and functional requirements of the capital largely take shape, with the tertiary industry contributing about 72 percent of the total added value. Price level basically remains stable and CPI increase is controlled within 3 percent each year.

(II). Remarkable improvement in indigenous innovation capacity. We basically create a capital innovation system with ZhongguancunSciencePark at the core. The capacity for knowledge innovation and technology radiation obviously increases, and the foundations for the innovation-driven city have been laid. R&D expenditure of the whole municipality accounts for about 6 percent of GDP, and self-developed new and high-tech products contribute about 38 percent to the total value. Moreover, there appear some powerful enterprises with self-developed intellectual property, famous brands and strong international competitiveness. 

(III). Remarkable improvement in sustainable development capacity. Improve resource utilization substantially. Lower the energy and water consumption per 10,000 yuan (US$1,250) of GDP by 15 percent and 20 percent respectively, compared to the figures from the end of the Tenth Five-Year Plan. Greatly improve ecological quality with urban air quality basically meeting the national standard. Harness major lakes and rivers within the Sixth-Ring Road, with the water bodies generally turning clear. The forest and wood coverage of the whole municipality reaches as high as 53 percent.

(IV). Remarkable improvement in people’s life quality. Annually increase per capita disposable income of urban dwellers and per capita net income of farmers by over 6 percent on average in real terms. Greatly improve the basic public service and living environment in the rural areas, enabling city dwellers to drink clean water, breathe fresh air and have safe food. Per capita public green area in the city reaches 15 square meters and safe drinking standards reach 100 percent in rural areas.

(V). Remarkable improvement in building a harmonious society. The city registered unemployment rate is controlled within 3.5 percent. A relatively full-fledged social security system and relief system basically take shape covering the urban and rural areas. The basic pension, medical insurance and unemployment insurance coverage in urban areas stand at 95 percent, and rural pension coverage reaches 60 percent. Make new progress in the market economic system. Set up a relatively mature disaster prevention and relief system, and urban safe operation system. Almost complete “Village-Amidst-the-City” regulations with the appearance of harmonious communities, towns and villages. Substantially improve the rule of law and citizens’ quality.

III. Strategic Priorities

Attach importance to transformation of development concepts, innovations in development mode, and improvement of development quality, and to lead the capital city onto the track of coordinated and sustainable development. Give priorities to four key issues of overall and long-term significance and strive to make breakthroughs during the Eleventh Five-Year Program period.

Intensive growth mode. To facilitate development on the basis of saving and making efficient use of resources and to gradually form an energy-saving mode of growth and consumption. In order to strengthen indigenous innovation capacity for further development, we should make major technological breakthroughs in key fields and build a mature indigenous innovation system and mechanism framework. To optimize the economic structure for further development, we should give full play to the advantages of Beijing. Make the “headquarter economy” of larger scale and stronger and gradually create a high-end, highly efficient and highly radiating industrial cluster. 

Market-oriented resource allocation. We should perfect the pricing mechanism for resource factors so that prices can reflect the extent of resource scarcity, market supply and demand, and cost of ecological loss. The market should be given more power in allocating resources. In addition, we should continue to break monopolies and accelerate the building of the modern market system, which is unified, open and with orderly competition. Further marketization and regulation should also be enhanced. It is necessary to promote government innovation, intensify basic administration and improve the competence in performing duties in accordance with the law. 

Universal and equal access to public services. We should adhere to a human-centered and expanded public service, oriented to the suburban areas, communities and the city residents. What needs our special emphasis is rural basic education, public heath, safe drinking and construction of other service facilities. It is necessary to regulate the coverage of pubic finance and gradually narrow the gap in public services between urban-rural areas and different regions. With better fairness and accessibility, the general public can be guaranteed to share the achievements of development and reform.

Coordination of urban-rural and regional development. We should set up a mechanism to coordinate urban-rural and regional development, implement the city master plan and function definition of districts and counties and intensify categorized guidance. In addition, we should actively guide to promote shift of investment, resource industries, and functions to suburban areas, so that the economic layout, population distribution and resources and environment sustainability can be matched and finally achieve strategic focus shift and optimization of the overall function. 

Part Three Development Focus and Policy Orientation 

I. To Transform Economic Growth Mode

To achieve rapid and sound development of the capital city’s economy, we should speed up the adjustment to the economic structure substantially and transform the growth mode. We should strive to realize the coordination of the speed, structure, quality and efficiency of economic growth by increasing industrial and technologic competence, magnifying scale and concentration effects, and promoting resource saving and efficient utilization. 

(I).To promote industrial optimization and upgrading

The general direction and requirements are: to develop high-end industries; to prioritize the modern service industry; to vigorously push forward new and high-tech industries; to moderately develop modern manufacturing industry and to substantially upgrade modern agriculture with metropolitan characteristics.

Accelerate the development of modern service industry. We should be active in undertaking the shift towards an international service industry, paying attention to the knowledge-based service industry and enhance service functions and radiation. It is also important to steadily upgrade such pillar industries with our comparative advantages in finance, culture and real estate and to nurture industries showing great potential, for example tourism, convention and exhibition industries and modern logistics, etc. Key areas include the following:

Financial industry. We should keep optimizing the financial development environment, build a multi-layer financial market system with rich functions, adequate and orderly competition and effective regulation, and promote innovation of financial products and services. Measures should be taken to attract various types of financial institutions to Beijing, such as domestic and foreign banks, securities, insurers, trust companies and funds, etc. Efforts should be made to advance transactions of property rights and the development of the venture capital market. It is also important to bring into play the concentration and radiation effects of financial resources and to expand regional exchanges and cooperation in the industry.

Cultural and creative industry.Starting from system and policy improvements, we can accelerate the development of cultural and creative industries by formulating local regulations and preferential policies in support of the industry, establish favourable policy and legal environment so as to build the industrial pillar of the capital’s economy. We should integrate premium resources and actively develop a series of competitive cultural corporation groups and industrial clusters; make the advantageous industries bigger and stronger, such as performances, publications, broadcasting, film, TV and advertising, etc; continue to develop emerging industries, for example, creative, animation, network media and network gaming, etc; create a batch of excellent cultural products and famous cultural brands, which are first-rate and rich in Beijing flavor; gradually build Beijing into a national centre for cultural performances, publications, copyright trade, film and TV production and transactions, animation and network gaming, cultural conventions and exhibitions, and antique and art articles transactions. We should seize the opportunity of Olympics and vigorously develop the sports industry, fitness, competitive sports performance, sports lottery.

Tourism, conventions and exhibitions. We should take the opportunity of the Olympic Games to exalt the level of the tourism, conventions and exhibitions industry significantly and to make Beijing a world-leading tourist destination and centre of international conferences and exhibitions. In addition, traditional cultural sightseeing and tours should be consolidated, focusing on the development of high-end tourism products, such as modern entertainment, commercial conventions and exhibitions, sports and leisure. We should do a good job in constructing national conference centers and the (new) ChinaInternationalExhibitionCenter, etc. Efforts should be continued to upgrade the brand conference and exhibition events with international influence in the science, technology, car, cultural industries.

Real estate industry. We should guide the real estate industry to develop in a sound manner, following the targets of “steady development, optimized structure and stable price.” Efforts should be made to keep land supply and construction scale in good control, and ordinary apartment should be majority in supply market to develop resource-saving buildings, and create brand name of real estate. Moreover, we should vigorously develop a secondary housing market, regulate lease markets and optimize market supply system. The layout of real estate development should be adjusted, development scale in urban central areas should be optimized and well-controlled, shifting the focus to new and southern towns, such as Tongzhou, Shunyi, Daxing and Changping; in principle, no new projects of commodity houses within the Second-Ring will be approved; within the Third-Ring Road, large-scale commercial facility construction will be strictly controlled; within the Fourth-Ring Road except for the southern part of the city, no new affordable housing projects will be developed.

Modern logistics.We should lay emphasis on logistic resource integration and efficiency improvement. Key projects include ShunyiAirport, TongzhouMajuBridge, Fengtai Wangzuo, Changping Machikou and other public logistic parks. We will try to create a logistic infrastructure pattern with logistic bases, comprehensive logistic centres and professional distribution centers complementing and coordinating with each other. We will make great efforts to develop industrial logistics, actively promote international logistics and air transportation logistics, and optimize urban distribution logistics. With IT and supply chain management technologies at the core, we will strive to make logistic enterprises more professional, information-oriented and socialized so that a batch of key enterprises will be actively forestered.

Commercial trade and related services. We will work to upgrade traditional service industry by utilizing modern management methods and information technologies. Efforts should be made to promote modern circulation methods and new models, such as chains, convenience stores and specialized supermarkets, to speed up the development of community commerce and suburban, village and town commerce, and to construct modern circulation networks in the urban and rural areas. Moreover, the existing wholesale and retail markets should be regulated to transform and upgrade tangible markets. In addition, various world famous intermediary agencies of commercial services, like accounting, lawyer’s, consulting and appraisal services should be encouraged to help establish a commerce serving system which is locally based and facing the country.

Vigorously develop new and high-tech industry.The key lies in upgrading the indigenous innovation capacity and general competitiveness of the industry. Focus should be given to such high-tech service industries as software, R&D and information services, and new and high-tech manufacturing, mainly electronic and information industries and biological industries.

Software industry.The second phase of ZhongguancunSoftwarePark, YongyouSoftwarePark and other software bases will be constructed at a quicker speed. Driven by system integration, software development will be focused on key technologies, such as embedded software, middleware, information security and digital content. We should rely on the national software export bases to expand outsourcing and continue to support homegrown software by means of government measure such as procurement. 

R&D industry.With the amelioration of public technology support and service support as the cornerstone, we work to establish professional R&D bases within a first-rate environment, to attract multinationals and large domestic companies to set up R&D centres and decision-making and operation centres, and to encourage the development of science and technology intermediaries in testing and consulting.

Information service.We should vigorously develop software services, value-added information and network services; 3-G mobile communications, digital TV, next-generation Internet and other key technological applications are our focuses; we should further strengthen the development and utilization of information resources, promote e-business, online education and training, digital entertainment and other network service, as well as new types of information service. Efforts should be made to build Beijing into the national centre for information services, a major hub for international information service providers and one of the most important telecom pivots in the Asia-Pacific region.

Mobile communications.Taking the opportunity for industrialization of new-generation technology standards, we will support R&D for key technology standards and industrialization of self-owned core technology programs, with the focus on 3G standards-based systems and mobile terminal designs to promote the upgrading of the mobile communications industry.

Computer and network. We will encourage cross-country operation of large computer companies, industrialization of 3C products based on IGRS standards and R&D and industrialization of powerful computers. We will make efforts to consolidate the industrial alliance of the next-generation Internet, to build a demonstrative platform for application and build the industrial chain of the IPv6-based next-generation Internet.

Integrated circuits (IC). We strive to accelerate the construction of a national IC industrial park, to integrate IC industrial resources with designing and testing as the focus, alongside manufacturing support, an improvement in the industrial chain of semiconductor materials and IC designing, manufacturing, encapsulation and testing.

Photoelectric display. We will rely on flagship enterprises to drive the industrial chain development of photoelectric displays and encourage cooperation in innovation and technology R&D between flagship enterprises, small and medium enterprises and research institutes in order to form advanced industrial clusters of photoelectric displays. In particular LCD, OLED and LED display products development and industrial bases construction will be substantially supported. 

Modern biological industry.We should conduct active research on biological engineering technology and new products, such as gene engineering, biological chip, and animal vaccine. Efforts should also be made to speed up the development of biological medicine, biological agriculture and biological environment protection.

Apart from the above-mentioned industries, we should actively develop potential industries, for instance, digital TV, automobile electronics, new materials and new energy.

Moderate development of modern manufacturing.We should speed up our pace in developing technologies, brand products, flagship companies and pillar industrial clusters with self-owned intellectual property to form a well-linked industrial pattern of “flagship companies-industrial chain-----industrial cluster.” We should give full play to the industrial concentration effects and comparative advantages of regions, increase the overall industrial competence and competitiveness. Key areas of development include the following:

Automobile industry. From the perspective of system improvements and resource consolidation, we should speed up restructuring of the automobile industry, with a focus on cars, commercial vehicles and dual-purpose off-road vehicles. Whole car development can drive the progress of relevant industries, such as car parts, components, accessory manufacturing and service trade. We stress innovation, brand building, introduction and absorption of sophisticated and key technologies to enhance the overall competitiveness.

Equipment manufacturing. Focused on system integration, we make efforts to accelerate R&D and industrialization of field bus intelligent instruments and control system and give special support to electricity generation, transmission and substation equipment, numerical-control machine tools, engineering mechanics, printing mechanics and other advanced equipment manufacturing.

New petrochemical materials. We will actively promote such major projects as Yanshan Petrochemical 10-million-ton oil refining system transformation and third-round ethane device transformation. By relying on Yanshan Petrochemical Company, we will focus on new petrochemical materials and fine chemical manufacturing with light pollution, small resource consumption and high added value.

Medicine industry. We will focus on Traditional Chinese Medicine (TCM) and natural medicines and modernization of TCM production. We will make efforts to enhance creation and R&D of chemical medicines, to set up an industrial pattern featuring coordinated development of chemical medicine, TCM, biological medicine and medical devices and to build first-class national base for biological engineering and new medicine industries.

City industry. We focus on cultural, educational and sports articles, garment and textiles, food and beverage, packaging and printing, arts and crafts in order to create famous and excellent brands to meet the demands of local consumers.

To expand and optimize the construction industry. We should further technological progress, optimize industrial structure and strengthen the overall competence and competitiveness of the industry. Moreover, we should consolidate the industry’s leading position in China and on the basis of increasing its share in the domestic market, implement the development strategy of “go global” and enhance its capacity of service export.

To promote industrialized operation of agriculture. We will stick to the direction of modern agriculture with metropolitan characteristics, mainly focusing on seeds fostering, processing and tourism and leisure agriculture. We will endeavor to make flagship companies bigger and stronger and promote agriculture to develop on a larger scale and in a more intensive way. We should make use of the capital’s advantages in agricultural technologies and the scale of market, to create a regional agricultural chain. Our priorities are non-polluting, green, organic agricultural products and customized high-end products. We should make efforts to build famous and excellent brands, improve added value of agricultural products and comparative benefits of agriculture.

To adjust industries not compliant with the capital's function definition. We should redouble our efforts to phase out the industries with high energy, material consumption, high pollution and low added value and to transform the existing disadvantageous industries to industries with advantages. In addition, we should strictly control and eliminate industries based on resource exploitation and obsolete techniques and equipment. Efforts should be concentrated on the following work: relocation of Shougang group; construction of Caofeidian New Steelworks; implementation of Shunyi Cold Rolled Steel Sheet project; relocation of plants like Coking Plant; restructuring the construction materials sector in the whole municipality, and shutting down of enterprises causing serious environmental pollution.

(II). To guide rational distribution of industries

Our efforts should focus on the following: to make intensive use of resources and protect the environment; to foster new growth poles; to regulate the order of regional competition; to strengthen planning and policy guidance in accordance with city development strategy and function definition of districts and counties; to promote relative concentration of key industries and newly built projects and to gradually form an industrial layout in line with city functions, resources and environment.

Promote rational division of labor and diversified development of different districts and counties. Our focus will include the following: to optimize and improve the core functional areas of the capital, especially finance, culture, tourism and other modern service industries; to transform and upgrade the traditional service industry; to restrict simple scale expansion of general commercial facilities and real estate development; to gradually close and transform those markets in downtown areas which have traffic and environment impact, and exist great security accident potential.. Moreover, we should upgrade extended city functions, in particular, science, technology, education, culture, sports, commercial services, modern logistics, information services and other modern service and high-tech industries. Other efforts include the following: to expand the scale of a headquarters economy; to continue relocation of disadvantageous industries; to give special attention to new developed areas, modern manufacturing and service industries supporting life and production; to strictly protect basic farmland; to develop high-end agricultural products and metropolitan agriculture; to moderately develop ecological conservation zones; to stress the development of environmentally friendly industries and city industries, such as ecological agriculture, special trees and fruits, tourism and leisure, and metropolitan industry; to gradually shift resource exploitation-based industries that adversely affect ecology and water conservation and to give powerful support to the industrial transformation in Fangshan, Mentougou District and other areas after the shutdown of coal mines.

Construct the functional area of high-end industries that lead to future development. Efforts will be made in the following areas: to strengthen Zhongguancun Science Park and drive intensive development of new and high technology R&D and knowledge service industry, to speed up the building of Beijing Economic and Technology Development Zone and form a world leading industrial base dominated by high-tech manufacturing and productive service; to develop the functional area of the aviation economy and aviation industry to improve the level of conventions, exhibitions and logistics; to well establish the CBD, Olympics central area and financial street to promote cluster development of the high-end service industry; to attract domestic and foreign investment to the functional areas through preferential policies; to arrange some municipal-level key projects in favor of the functional areas and support some district-level key projects to concentrate in the functional areas that can become a new growth pole that represents the functional advantages of the capital and with the greatest economic vitality, market competitiveness and industrial radiating power. 

Graph 3 Growth estimates of six high-end industry functional areas during the 11^th Five-year Plan