III. Strive for dynamic and orderly market and society by innovating and strengthening governance

Deepening administrative reform and transforming government functions require not only the removal and delegating of powers, but also improvement and strengthening of governance, with greater government efficiency and stronger government capacity for comprehensively performing duties in accordance with law, so as to ensure both dynamism and order in the market and society, and deliver sustained and healthy economic growth and just and equitable society.

The pressing task now is to strengthen market regulation, and create a level playing field for market entities of various types. Currently, China's market economy is far from well-regulated. A large number of new market players have emerged after the reform of the business system. Should market regulation fall short, market disorder could intensify, and the distorted effect of the "bad money driving out the good" would get amplified, and the development of honest and the new market players would be adversely affected. I was told in my local field trips by many, including business people from Taiwan and foreign countries, that companies alone can not resolve such market irregularities as IPR infringements, cheating, swindling and counterfeiting. If the government gets them under control, companies would be relieved of their "pain in the heart". Therefore, after significantly reducing the number of review and approval items, the government should get to the ongoing and ex-post oversight of the market. This represents a major shift of government management style which is harder and more challenging. Governments at all levels, as well as their employees, should adapt themselves to such a shift and earnestly perform their duties of governance.

We need to improve the supervision approach to place more emphasis on the rule of law, fairness and accountability. The current practice of market supervision entails inspection of too many kinds without clearly defined rules, adding burdens to enterprises and creating room for rent seeking. On the other hand, market behaviors that should be subject to supervision by the government are left in benign neglect. The right approach to supervision requires both strictness and simplicity. The government should minimize intervention in people's lives and put in place a sound legal framework and proper and effective rules, procedures and standards for market supervision and publicize them fully so that market players will know where the line is drawn and carefully observe it. By so doing, the discretionary power of regulators will be slashed. Equally important, the government must carry out supervision in accordance with the law, maintain and safeguard the market order for fair competition. To use a sports metaphor, the government should be a good "referee" - leaving those well-behaved players alone while giving a timely yellow-card warning for minor fouls or a prompt red card for serious foul play. Needless to say, a referee should perform his duty faithfully and enforce the rules in a fair and just manner instead of being negligent or engaging in match-fixing. Regulators must be subject to supervision as well. Relevant information should be made public and a well-defined accountability system for supervision must be enforced.

We need to innovate supervision mechanisms and explore new ways to make supervision more effective. After active experiment over the past two years, local governments have gathered plenty of good experience and practices. Continuous efforts must be made to advance innovation in supervision. First, we need to put in place an integrated system for supervision and law enforcement. We should push ahead the building of a unified supervision platform that covers the entire scope of supervision by all government departments involved. Meanwhile, we need to consolidate administrative law enforcement teams to conduct cross-department and cross-sector law enforcement. The responsibilities of different law enforcement agencies can be merged into one to form synergy in supervision and law enforcement and avoid either overlapping responsibilities or blank spot. The result of supervision and law enforcement should be made public and put on record. After all, the most effective way to deal with unfair supervision and law enforcement is to expose them in the sun light. Second, we will carry out more ad hoc inspections. In some places and sectors, enterprises and regulators involved in inspections are now randomly selected through separate lotteries conducted on the same platform. We will popularize such practices across the country as they both increase pressure on the enterprises and narrow the space for rent seeking. Third, we will advance "smart" supervision. We should actively employ big data, cloud computing, the Internet of Things and other information technology to explore an "Internet Plus supervision" model. We should speed up information sharing and connectivity among departments at different levels to remove "isolated islands of information", so to speak. We will put in place a unified social credit system, an information disclosure and credit filing system, and an integrated punishment and black list mechanism so that one dishonest behavior will result in restrictions at every turn. Fourth, we need to strengthen public supervision. We need to have unimpeded channels for public complaints and tip-offs. We should give sufficient incentives to whistle-blowers and keep their identity confidential. Enterprises should bear the primary responsibility in the mutual supervision mechanism that can trace problems to the source. Industry self-regulation and peer review should be strengthened. Media scrutiny should be encouraged. All these efforts will help weave a tight net of supervision where nothing can escape public attention.

IV. Improve government services to better meet the need of the people and that of economic and social development

It falls upon the government to create conditions for its people to lead a decent life. Despite the tremendous efforts over the years made by governments at all levels, public goods and services remain inadequate. Promptly addressing this challenge will help bring about notable improvement in the capacity and quality of government services and an increase in effective investment, which will help counter the downward pressure on the economy. This calls for deepening reform, such as further streamlining administration and delegating power to remove obstacles and better leverage the role of market forces. The result of the reform can be measured by the rate of increase in public goods and services. By providing sufficient public goods and quality, efficient public services, we want to make entrepreneurship and innovation easier, economic development smoother, our people happier and our society more caring, harmonious, cohesive and dynamic.

(I) We will provide all-round services for mass entrepreneurship and innovation. This will help create jobs, which is also the aim of promoting stable growth. First, we need to strengthen policy support. We are looking at a series of policy measures in support of entrepreneurship and innovation with a focus on small and micro businesses on top of cutting taxes, slashing fees and reducing corporate burdens. We will provide support in terms of rent, office space, taxes and fees to various incubators such as makerspaces and Innovation Works. We will make government funds available to leverage private input through discounts, subsidies and venture capital funds. We will improve investment and financing mechanisms, develop venture capital, angel investment and other forms of investment, explore new business models and take multi-pronged steps to help entrepreneurs meet their financial needs. Second, we will put in place a platform for comprehensive services on which all the needs for entrepreneurship and innovation will be provided for. We will step up policy, legal and consulting services, better protect intellectual property rights and provide guidance to employment and entrepreneurship for college graduates and vocational training for rural migrant workers. Some of these services can be provided by the government directly, some can be purchased from specialized agencies and some others require the active involvement of intermediaries. Third, we will provide accessible and efficient services. It is already demanding for people to start up companies and make innovations. Governments at all levels and their staff must put themselves in the shoes of entrepreneurs and innovators, provide more tailor-made, thoughtful and speedy services with streamlined procedures. We will continue to offer one-window, one-stop and one-package services at government service centers, set up clearly defined procedures and standards, and shorten the approval time.

(II) We will provide fair and accessible public services to the people. Providing more public goods and services is not the one-man show of the government. We should introduce institutional innovation, use all the possible support of the society and make sure there is sound planning, standards, competition and stronger oversight. Enterprises and public organizations should be given the responsibility in whatever areas they have the interest and expertise, by way of authorization, contracting and purchase. For those services where government involvement is truly needed, there should be public-private partnership. This should also be applied whenever possible to the provision of basic public services. The government should try its best not to add staff or institutions and strive to do more with less. This will be conducive to the formation of a new public services mechanism and to the growth of privately-run service sectors in education, health care and old-age care. While working hard to provide sufficient public services, we should improve the fairness and accessibility of such services. We need to innovate the ways of delivering services to bring the greatest possible convenience and benefit to the people. It will be ideal if some services can be handled online, or by proxy or delivered to the doorstep which saves people the time of visiting government bureaus. When people do need to go to government bureaus, they should be notified of all the requirements beforehand and be able to complete the procedure with one or two visits. As for the various kinds of "certificates" people are asked to produce, they should be kept at a minimum, and they should be standardized and combined whenever possible. Those that are truly necessary should be verified through information sharing and coordination between government departments. Government at all levels and their staff must be committed to providing the greatest convenience for the people even if it means more work for themselves.

(III) We will make sure the government fulfill its responsibility to provide subsistence assistance for all. China is still a developing country with more than 70 million people living on the basic living allowances and roughly the same number of people living below the poverty line. Though we have established a social security system that covers the whole population, the level of welfare provided remains low, and many local governments have to struggle with fiscal crunch. Yet no difficulty should weaken our resolve to meet the basic needs of those people in poverty. When subsistence is guaranteed, business starters, especially the young people, will be free to pursue their ambitions and have something to fall back on even if they fail. We should pay more attention to the employment, social welfare, education, health care and old-age needs of groups in difficulty and accelerate the transformation of urban rundown areas and dilapidated houses in rural areas. Nonetheless, it should be pointed out that efforts to provide basic public services and improve people's livelihood should be based on reality and commensurate with the level of economic and social development in our country.

V. Strengthen planning and leadership and ensure sound implementation of all reform measures

To deepen administrative system reform and transform government functions is a profound revolution that covers extensive areas and involves many difficulties. We must strengthen leadership and planning to move the reform forward in an active yet prudent manner.

First, strengthen mechanisms and clarify responsibilities. The State Council will continue to focus on streamlining administration, delegating more powers to lower-level governments and society, improving regulation and optimizing services. All regions and departments must also set up their corresponding leadership and working mechanisms where the principal leaders should take charge and make timely decisions on major issues in the reform. All reform items should be based on detailed division of tasks and duties, timetables, roadmaps and written pledges of responsibility. The reform will touch on the government's own interests, and we must have the courage to cut our own benefits to give them to the people, to make our society a more prosperous place.

Second, coordinate actions and boldly experiment with reforms. To streamline administration, delegate more powers to lower-level government and society, improve regulation and optimize services is a systematic project that needs to be guided by holistic planning and advanced as a whole. All regions and departments must have a firm understanding of the overall picture and implement the decisions to the letter to make sure that all directives are executed without fail and there is consistency in our actions across the country. For any reform decisions taken by the State Council, related documents and supporting measures should be introduced as quickly as possible without procrastination. A basic experience we gained in reform and opening-up is to respect the community and people's creativity. Many major reform measures started at the local or regional level and were then spread nationwide. In our reform such as administrative streamlining and power delegation, ample space is left for the regions. All regions should be bold in their exploration and innovation in light of their own conditions and the requirements and principles laid down by the State Council to take the lead in reform. At the same time, they should learn from other region's good experience and practices.

Third, be proactive and conscientious. Our civil service is professional, responsible and hard-working on the whole. The achievements of reform and opening-up have been the results of the common efforts by government officials at all levels and the people. In the future, we will still rely on our officials to lead the people in advancing reform and development. With regard to nonfeasance and perfunctoriness that do exist among some officials, we need to enhance ideological education to help them adapt to the new situation created by administration streamlining, power delegation, regulation improvement and service optimization, and guide them to make new achievements in promoting prosperity and stability in their own regions. At the same time, we must create stronger incentives and disincentives to encourage officials at all levels to be proactive and conscientious in their work. Government staff, civil servants at the community level in particular, have a very heavy workload and their income is not high. While resolutely barring the "back door" and addressing issues of civil servants making illegal gains with their power, we should also open the "front door" to establish a mechanism for regular salary increases so that civil servants' income will be raised in tandem with economic development and their legitimate welfare and dignity will be ensured. Last year, the State Council introduced policy on improving the salary and pension insurance system for public institutions, and the salary adjustment in all regions must be implemented by the end of June.

Fourth, greater oversight and strong implementation. All regions and departments should incorporate administrative streamlining, power delegation, regulation improvement and service optimization into their performance evaluation system and improve the assessment mechanism. There should be greater and innovative ways of oversight and inspection that incorporate third-party and public evaluation. Good experience should be disseminated in a timely way and issues discovered should be solved without delay. Failure to implement will be subject to accountability. All this will help to ensure solid implementation of all reform measures. In the coming months, the State Council will conduct a major inspection of government departments and local regions, to make sure that measures to delegate power, improve regulation and optimize services are implemented throughout from the "first mile" to the "last mile". This will be conducive to strengthening the efficacy of our policies to stabilize growth, advance reform, adjust structure and benefit the people.

Fifth, promote steady progress of reform in accordance with law. The law is an instrument of paramount importance in national governance and good laws are the precondition for good governance. Reforms such as administrative streamlining and power delegation must be promoted on the basis of the rule of law and major reforms should have solid legal ground. At the same time, laws and regulations should also meet the demand of reforms and be adjusted and improved in a timely way to promote order and vitality at the same time. When delegating powers, relevant departments need to propose accompanying revisions to laws. The revision and legislation process should subject to close scrutiny to prevent the legalization of departmental interests. Extrajudicial extension of powers will be strictly prohibited to prevent new expansion of government powers. All the relevant regulations should be overhauled promptly at the requirement of the State Council and all those that have no legal basis or detrimental to the people's lawful interests are to be abolished or revised.