To deliver a good performance in the work of the government this year, we need to concentrate on the following three areas:

First, we need to ensure continuity in and make improvements to macroeconomic policies.

We will continue to implement proactive fiscal policy and prudent monetary policy. We will pay greater attention to anticipatory adjustments, fine-tuning, and targeted regulation. We will put both existing and additional financial resources to good use, focusing particularly on strengthening weak spots. We will improve micro-level vitality to underpin macroeconomic stability, explore new ways of achieving supply to boost demand, and balance total supply and demand through structural adjustments to ensure the economy performs within an appropriate range.

Our proactive fiscal policy must sustain the momentum of economic growth and increase economic returns. The government budget deficit for 2015 is projected to be 1.62 trillion yuan, an increase of 270 billion yuan over last year, which means that the deficit to GDP ratio will rise from last year’s 2.1% to 2.3%. Of this amount, the central government deficit will account for 1.12 trillion yuan, an increase of 170 billion yuan, and local government deficit will account for 500 billion yuan, an increase of 100 billion yuan. We need to find the right balance between managing debt and maintaining steady growth. We will develop and improve mechanisms for local governments to secure financing through bond issuance. We will allow local governments to issue an appropriate amount of special bonds, ensure continued financing for eligible projects already under construction, and guard against and defuse risks and latent dangers. We will improve the mix of budgetary spending, redouble our efforts to put government funds on hand into use, and strengthen the effectiveness of government spending. We will continue to make structural tax reductions and cut fees across the board so as to further lighten the burden on enterprises, particularly small and micro businesses.

We will pursue prudent and balanced monetary policy. The M2 money supply is forecasted to grow by around 12% in 2015, but the actual growth may be slightly higher than this projection depending on the needs of economic development. We will work to strengthen and improve macro-prudential regulation, adopt a flexible approach in our use of monetary policy tools including open market operations, interest rates, required reserve ratios, and re-lending, and maintain steady growth in the supply of money and credit as well as aggregate financing in the economy. We will speed up the turnover of funds, improve the credit structure, increase the proportion of direct financing to total financing, and reduce the cost of financing, thereby allowing more financial resources to be channeled into the real economy.