Full Text: Report on the Work of the Government (3)

III. Major Tasks for 2014

To deliver a good performance in the work of the government this year, we need to deepen reform so as to create powerful impetus, carry out structural adjustment as our main priority, and make improving people's wellbeing our fundamental goal. We need to take a holistic approach, focus on key areas, and achieve solid progress.

1. Making breakthroughs in reform in important areas

Reform is the top priority for the government's work this year. We will focus on economic structural reform, advance it on different fronts in a targeted way in light of different conditions, take key measures that will have an overall impact, strive to make substantive progress and reap more benefits reform.

We will deepen reform of the administrative system.

We will further streamline administration and delegate more power to lower-level governments. This is a revolution the government imposes on itself. This year, we will cancel or delegate to lower-level governments an additional 200 plus items requiring State Council review and approval.

We will deepen reform of the investment approval system, abolish or simplify preliminary review and approval procedures, give businesses full power over their investment decisions, and make it easy to make investments and start businesses.

We will introduce a system to list all items over which government review and approval are required and release the list to the public. No items not on the list will be subject to government review and approval. We will also comprehensively sort out items requiring nongovernmental review and approval.

We will basically complete the reform of government bodies at the provincial, municipal and county levels, and continue to reform public institutions. We will reform the business registration system nationwide and carry out registration of subscribed capital. Issuing an operating permit before a license, which was the practice in the past, will be replaced with the practice of license first, operating permit second. Annual inspections of businesses will be replaced by annual reporting to incentivize market actors.

Stronger oversight will be exercised over delegated matters when they are being handled and after they have been handled. We will attach equal importance to both delegating power and strengthening oversight, establish a mechanism of coordinating management between government bodies at both the same and different levels, and ensure that both responsibility and power are delegated together and that relaxing control and strengthening oversight go hand in hand.

We will expand the one-stop review and approval model and one-window services, and explore ways to conduct unified market oversight. We will move faster to put in place a social credibility system, share more government information between government departments and with the public, introduce unified codes for natural and legal persons, implement a blacklisting system for enterprises that violate market competition principles and infringe on the rights and interests of consumers, and make those who lose credibility pay the price and smooth the way for those who have credibility.

We will give high priority to reforming the fiscal and tax systems.

We will institute a comprehensive, well-regulated, open and transparent budget system. We will work hard to incorporate all government revenue into the budget, and bring all revenue and expenditures under budgetary management. Governments at all levels should release their budgets and final accounts to the public, and budgets released by government bodies should progressively include details down to basic regular and project expenditures. In particular, all public spending on official overseas visits, official vehicles, and official hospitality should be made public. We will ensure transparency of public finance and make it easy for people to understand and oversee it.

We will increase the proportion of general transfer payments, and cut the number of special transfer payments by one third this year and continue to cut them in coming years.

We will advance the reform of the tax system by taking the following steps: Extend trials for replacing business tax with VAT to the railway transport, postal and telecommunications services industries, abolish fees and replace them with taxes, reform the excise tax and resource tax, and move ahead with legislation on a property tax and environmental protection tax. We will grant additional tax breaks to micro businesses with low profits and reduce the burden on businesses.

We will work faster on ways to adjust the power and spending responsibilities between central and local governments, and progressively adjust distribution of revenue between them while keeping the current division of financial resources between them basically stable.

We will establish a standard financing mechanism for local governments to issue bonds and place local government debt under budgetary management. We will implement a comprehensive government financial reporting system and guard against and defuse debt risks.

We will deepen reform of the financial sector.

We will continue to liberalize interest rates by granting financial institutions more power to set their interest rates. We will keep the renminbi exchange rate basically stable at an appropriate, balanced level, expand its floating range, and move toward renminbi convertibility under capital accounts.

We will steadily promote the establishment of small and medium-sized banks and other financial institutions by private capital, and guide private capital to invest in or hold shares in financial institutions and intermediary financing services.

We will establish a deposit insurance system and improve the risk disposal mechanism of financial institutions. Reform in policy-based financial institutions will be carried out. We will speed up development of a multilevel capital market, advance the reform to introduce a system for stock issuance registration, and develop a well-regulated bond market. We will actively develop agricultural insurance and explore how to establish a catastrophe insurance system. We will develop inclusive finance.

We will promote the healthy development of Internet banking, improve the mechanism for coordinating financial oversight, keep a close watch on the cross-border flow of capital, and ensure that no systemic or regional financial risks occur. We will ensure that financial services play an active role in meeting the needs of the real economy, including small and micro businesses, agriculture, rural areas, and farmers.

We will enhance the vitality of economic entities under all forms of ownership.

We will uphold and improve the basic economic system. We will improve the distribution and structure of the state-owned sector of the economy and accelerate the development of mixed-ownership economic entities. We will establish a sound modern corporate structure and corporate governance. We will improve the system for managing state-owned assets, clearly define the functions of different SOEs, and carry out trials of investing state capital in corporate operations. We will improve budgeting for state capital operations and raise the percentage of earnings from state capital turned over to public finance by central government-owned enterprises.

We will formulate measures for non-state capital to participate in investment projects of central government enterprises, and allow non-state capital to participate in a number of projects in areas such as banking, oil, electricity, railway, telecommunications, resources development and public utilities. We will formulate specific measures to permit non-public enterprise participation in franchising.

We will reform the railway investment and financing system, and open competitive operations in more areas so as to create a platform for the full participation of private capital. We will improve the property rights system to ensure that property rights are inviolable in both the public and non-public sectors.

2. Ushering in a new phase of China's opening to the outside world and ensuring its high standard performance

Opening up and reform have been launched as integral parts of the same initiative as they are mutually reinforcing. We will foster a new open-economy system and advance a new round of opening up to embrace the international market. This will lead to deeper reform and structural adjustment and enable us to enhance China's ability to compete internationally.

We will open China wider to the outside world in all areas.

We will continue to utilize foreign investment actively and efficiently, open up more service sectors to foreign capital, and level the playing field for domestic and foreign enterprises to compete on fair terms so as to ensure that China remains a top choice for foreign investment. We will ensure the successful building and management of the China (Shanghai) Pilot Free Trade Zone so that this model can be copied and extended, and we will launch a number of new trials. We will open China's inland and border areas wider to the outside world, and turn these broad areas into hotspots for opening up.

We will make it a strategic priority to upgrade exports and promote balanced growth of foreign trade.

Total imports and exports are projected to grow at around 7.5% this year. We will keep export policies stable and improve them, accelerate reform to facilitate customs clearance, and extend trials of cross-border e-commerce. We will implement policies to encourage imports, and import more products in short supply in China. We will guide the transformation and upgrading of processing trade, support businesses in creating Chinese brands and developing international marketing networks, develop service trade and undertake services outsourced by other countries, and raise the position of Chinese manufacturing in the global division of labor. We will encourage the export of complete sets of large equipment including telecommunications equipment, railways equipment, and power stations, and enhance the international reputation of Chinese equipment.

We will increase China's competitiveness through expanding its overseas business presence.

We will carry out reform of the management of outbound investment so that such investment is mainly reported for the record, and delegate much of the review and approval power over such investment to lower-level governments. We will provide better financial, legal and consular services, ensure orderly overseas business operations, and boost the export of products, project contracting and labor services.

We will intensify the planning and building of a Silk Road economic belt and a 21st century maritime Silk Road, and promote the building of the Bangladesh-China-India-Myanmar Economic Corridor and the China-Pakistan Economic Corridor. By launching a number of major projects, we will speed up infrastructure connectivity with our neighbors, and open up new space for enhancing international economic and technologic cooperation.

We will engage in bilateral, multilateral and regional opening up and cooperation in a coordinated way.

We will strive to make progress in negotiations on agreements concerning trade in services, government procurement and information technology, and speed up negotiations on new areas such as environmental protection and e-commerce. We will actively participate in developing high-standard free trade areas; continue negotiations on investment agreements with the United States and the European Union, and accelerate free trade area negotiations with the Republic of Korea, Australia, and the Gulf Cooperation Council. We will continue to promote trade and investment liberalization and facilitation, strive for mutual benefit with other countries, and ensure that opening up reinforces and is reinforced by reform and development.

3. Making domestic demand the main engine driving growth

Boosting domestic demand is both a major force driving economic growth and an important structural adjustment. We need to fully leverage the basic role of consumption and the key role of investment, foster new regional economic mainstay belts, stimulate both supply and demand, and establish a permanent mechanism for increasing domestic demand.

In working to increase domestic demand, we will focus on boosting consumption.

We will enhance people's ability to consume by increasing their incomes, improve consumption policies, foster new areas of consumption and increase consumption of services. We will support nongovernmental investors in running various types of services, with the focus on elderly care, health, tourism, and culture, and implement the system of paid vacations.

We will promote information consumption; implement China's broadband strategy; speed up the development of 4G mobile communications; build 100M fiber optic networks in cities and extend broadband connectivity to rural villages; greatly increase the speed of the Internet; deliver telecommunications, radio and television, and Internet services over a single broadband connection across the country; and encourage the creative development of e-commerce.

We will safeguard cyber-security. We will deepen reform of distribution channels; remove all barriers to a nationwide unified market; cut distribution costs; and encourage development of logistics and delivery, express delivery services, and online shopping. We will fully tap the enormous consumption potential of more than a billion people.

We will take investment as the key to maintaining stable economic growth.

We will accelerate reform of the investment and financing systems; encourage more parties to make investment; launch more demonstration projects involving private investment; improve the investment structure; and maintain proper growth in fixed-asset investment.

Budgetary investment of the central government will rise to 457.6 billion yuan, which will be mainly invested in government-subsidized housing, agriculture, major water conservancy projects, railways in the central and western regions, energy conservation, environmental protection and social programs. We hope that such government investment will attract more investment in these areas from other sources.

We will make developing new regional economic belts a strategic step for stimulating development.

We will energetically carry out the master strategy for regional development. We will give high priority to the large-scale development of the western region; fully revitalize old industrial bases in the northeast and other parts of the country; spur the rise of the central region; vigorously support the eastern region in taking the lead in transforming and upgrading the economy; and increase support to old revolutionary base areas, ethnic minority areas, border areas and poor areas.

We will promote a new type of regional development, and extend development in a phased way from the eastern region to the western region, from coastal areas to the interior, and along major rivers and land transportation lines. We will build a new economic development belt along the Yangtze River. We will use major coastal and border ports as fulcrums to develop economic belts that connect the coastal areas with the southwest, central south, northeast and northwest. We will promote economic integration in the Yangtze River Delta, deepen economic cooperation in the pan-Pearl River Delta, and further coordinate development in the Bohai Rim region and the Beijing-Tianjin-Hebei region.

We will implement different economic policies in different regions, speed up relocation of industries, develop trans-regional transportation and goods distribution networks, and create new regional economic growth poles.

The seas are our valuable national territory. We will steadfastly promote land and marine development in a coordinated way, fully implement China's marine strategy, develop the marine economy, protect the marine environment, resolutely uphold China's maritime rights and interests, and build China into a maritime power.