It is of vital importance to ensure national security and social stability in the new circumstances. We must take strict precautions against and firmly crack down on, according to law, sabotage by hostile forces both inside and outside China, and we must crack down on criminal activities perpetrated by forces of terrorism, religious extremism and ethnic separatism. We must continue to fight Falungong and other cults. In order to make the entire society significantly safer, we must severely deal with criminal activities and Mafia-like and criminal forces in accordance with the law and improve public security where it is weak. Under the principle of combining action with prevention while putting prevention first, we must implement measures for the all-round improvement of social order, and we must actively establish a prevention and control system for public security and a mechanism that guarantees that funds are available for operations of procuratorial, judicial and public security organs.Community development and management and political power at the grass-roots level in rural areas need to be strengthened. Contradictions among the people under the new circumstances have to be handled correctly so that factors liable to adversely affect social stability can be eliminated at the grass-roots level while still in the embryonic stage.

The fundamental interests of the people of all ethnic groups lie in strengthening ethnic unity and safeguarding the unification of the country. We will adhere to and improve the system under which ethnic minority groups practice self-government in the regions they inhabit. We need to fully implement the Party's policy on ethnic groups and consolidate and develop the socialist relationships of equality, unity and mutual assistance among different ethnic groups. We need to support and assist the ethnic minority regions to speed up their development. We will continue to implement the "Program to Develop Border Areas and Improve the Lives of the People There". Great efforts will be made to train cadres and talented personnel from among ethnic minority groups.We need to implement the Party's policy on freedom of religious belief, administer religious affairs effectively and in accordance with the law, and actively guide the various religions to adapt to socialist society. Religious circles must adhere to the principle of self-administration, running religious affairs independently, and we need to expand the contingent of religious patriots. We need to conscientiously implement the Party's policy towards overseas Chinese and handle overseas Chinese affairs well.

Strengthening national defense and building up the armed forces constitute an important guarantee for national security and the smooth development of our socialist modernization drive. In line with the general requirements of being qualified politically and competent militarily and having a fine style of work,maintaining strict discipline and being assured of adequate logistical support,and taking the military strategy of active defense for the new era as our guideline, we will use science and technology to strengthen the armed forces, run the armed forces with high standards and concentrate on quality without neglecting thrift. This aims at building a more modernized, standardized and revolutionary army and improving its effectiveness in wars to defend the country and in handling emergency situations when the use of high technologies has become predominant in warfare. We need to accelerate the restructuring, reform and development of our defense industry, raise the level of its scientific research and inn ovation and promote the development of weaponry and equipment. The reform of logistical services must be deepened to achieve better performance of the military economy and provide more effective comprehensive support. We need to strengthen the People's Armed Police. We need to improve the national defense mobilization system and consolidate the militia and reserve forces. We also need to improve national defense education, encourage the armed forces to support the government and cherish the people, encourage the people to support the army and give preferential treatment to families of service people and martyrs, and consolidate and strengthen unity between the army and the government and between the army and the people.

We should fully implement the principle of "one country, two systems" and the basic laws of Hong Kong and Macao special administrative regions. It is our firm and unswerving objective to maintain the long-term stability, prosperity and development there.The central government will continue to render full support to the efforts of the governments and chief executives of Hong Kong and Macao to govern the regions in accordance with the law, and it will further strengthen economic, trade, scientific, technological,cultural and educational exchanges and cooperation between the mainland and Hong Kong and Macao. We have full confidence in the future of Hong Kong and Macao.

In the new year, we will adhere to the basic principles of "peaceful reunification" and "one country, two systems" and, under the eight-point proposal for the solution to the Taiwan question put forward by President Jiang Zemin, we will continue to develop cross-Straits relations in the direction of peaceful reunification.We reaffirm that there is only one China in the world and the Chinese mainland and Taiwan both belong to one China. China's sovereignty and territorial integrity tolerate no division. The one China principle is the basis and premise for developing cross-Straits relations and promoting peaceful reunification of the motherland. We insist on resuming cross-Straits dialogue and negotiation on the basis of the one China principle. We are working to further expand the cross-Straits economic and cultural exchanges and develop cross-Straits relations so as to establish the "three direct links" as soon as possible. We will, as always, continue to strengthen our exchanges and dialogues with all political parties and people of all walks of life in Taiwan who support the one China principle and the development of cross-Straits relations. We support just actions against "Taiwan independence" attempts and for the country's reunification by overseas Chinese and people of Chinese origin across the world. Weare firmly convinced that the great aim of national reunification will be realized at an early date.

VIII. Doing a Good Job in Foreign Affairs

The international situation changed dramatically in 2001. However, peace and development are still the main themes of our times, and the trend toward a multi-polar world remains unchanged. China's international environment is still one more of opportunity than of challenge. The general picture of the international situation for a period of time to come will be that of overall peace and local warfare, overall relaxation and local tension, and overall stability and local turbulence.

Amid the changes in international relations, China's diplomatic work has entered a new stage, and its international status and influence continue to rise. China and other developing countries have strengthened their friendly relations. The good-neighborly friendship and cooperation between China and its surrounding countries have enjoyed all-round development. Last year, China, Russia and four Central Asian countries jointly announced the establishment of the Shanghai Cooperation Organization. At the Fifth China-ASEAN Summit, the two sides agreed to gradually establish a China-ASEAN free trade zone in the next 10 years. The relations between China and DPRK, ROK and South Asian countries have developed steadily. China's friendly relations and cooperation with African and Latin American countries have made fresh progress, and China's friendly relations with the Arab states and other Islamic countries have been further improved.

Development and improvement have been achieved in China's relations with the U.S., Russia, the European Union and Japan. We are participating actively and pragmatically in multilateral diplomatic activities in the international political, economic, cultural, social and disarmament arenas. We are firmly safeguarding China's sovereignty, independence, territorial integrity, national security and national dignity. China has joined the international community in condemning and fighting terrorism and is playing a constructive role in the international counter-terrorism struggle.

In the new year, we will continue to pursue an independent foreign policy of peace. On the basis of the Five Principles of Peaceful Coexistence, we will strengthen our solidarity and cooperation with other developing countries, further consolidate and deepen good-neighborly friendship and cooperation with surrounding countries, and continue to improve and develop our relations with developed countries. China will play an active part in the affairs of the United Nations and other international affairs, stand with people of all other countries in the causes for peace, development and progress and against hegemony, power politics and terrorism in all its forms, promote the establishmentof a just and reasonable new international political and economic order, and make even greater contributions to the maintenance of world peace and promotion of common prosperity.

Fellow Deputies,

This year, the work of the government will be quite arduous, and the responsibilities we shoulder are important and glorious. Let us rally more closely around the Party Central Committee with Comrade Jiang Zemin at its core, hold high the great banner of Deng Xiaoping Theory, and follow "The Three Represents" principle,so as to strengthen our confidence, overcome difficulties, and do solid work to achieve new successes in our reform and opening up and the modernization drive with a spirit of progressing with the times to build a better future!

(Xinhua News Agency March 16, 2002)