Full Text: Report on the Work of the Government (7)

We will advance reforms in the financial sector.

We will prompt financial institutions to focus on their main business and make their services accessible to small and micro businesses, strengthen their ability to serve the real economy, and resolutely prevent them from being distracted from their intended purpose.

We will encourage large and medium commercial banks to establish inclusive finance departments. Large state-owned banks should take the lead in this effort. We will adopt differentiated assessment and evaluation measures and supportive policies, and effectively address the problem of medium, small, and micro enterprises being unable to access loans or having to pay high interest to secure loans.

We will make good use of policy-backed and development-oriented finance. We will move forward with the reform of rural credit cooperatives and strengthen the role they play in meeting the needs of agriculture, rural areas, and farmers.

We will deepen the reform of the multi-tiered capital market, improve the basic systems of the main board, actively develop the ChiNext stock market and the new third board, and see that regional equity markets develop in a well-regulated way. We will expand channels for using insurance funds to support the real economy. We will make major efforts to develop green finance. We will give impetus to the sound development of the financial leasing industry.

At present, overall, systemic risks are under control. But we must be fully alert to the buildup of risks, including risks related to non-performing assets, bond defaults, shadow banking, and Internet finance. We will take active and steady steps to advance the reform of the financial regulatory system, and work systematically to defuse major potential risks. We will ensure order in the financial sector and build a firewall against financial risks.

The fundamentals of the Chinese economy remain sound, the capital adequacy ratio and provision coverage of commercial banks remain high, and we have many financial tools and instruments that can be used. We have the confidence, the ability, and the means to forestall systemic risks.

We will deepen the reform of SOEs and state capital.

We should develop a corporate governance structure (represented by legal person) that is under effective check and a flexible and efficient market-based operating system, with a view to increasing core competitiveness and making resource allocation more effective. This year we will basically complete the introduction of corporate systems into SOEs. We will deepen reform to establish mixed ownership systems, and make substantive progress in industries including electric power, petroleum, natural gas, railways, civil aviation, telecommunications, and defense.

We will advance structural reform in the power, oil and gas sectors and open their competitive operations to the private sector. We will do more to make SOEs leaner and healthier, and perform better; and we will redouble efforts to relieve SOEs of their obligations to operate social programs and help them resolve other longstanding issues. We will make progress in work on piloting reforms in state capital investment and management companies.

We will improve and strengthen regulation of state assets, and ensure that state assets maintain and increase their value, as we are duty bound to see that the common wealth of the people is well protected and grows.

We will do more to energize the non-public sector.

We will thoroughly implement the policies and measures for supporting the development of the non-public sector. We will work actively to develop a new relationship between government and business. We will encourage non-public enterprises to participate in SOE reforms. We must ensure equal rights, equal opportunities, and fair rules, and further expand market access to the non-public sector. All industries and sectors for which entry is not explicitly prohibited by laws or regulations should be open to different types of market entities; all industries and sectors that are open to overseas investment should be open to Chinese private capital; and all unjustified activities that impede fair market competition should be stopped.

We will improve the property rights protection system.

Protecting property rights means protecting labor, protecting invention and innovation, and protecting and developing productive forces. We will work faster to improve the property rights protection system and protect in accordance with law the property rights of economic entities under all forms of ownership and the property rights of citizens. We will encourage people to start businesses, make innovations, and create wealth, and we will inspire and protect entrepreneurship, and ensure that entrepreneurs can run their businesses and make investments with peace of mind. Activities that infringe on the property rights of businesses and citizens must be investigated and dealt with severely; anything that has been done wrong must be corrected.

We will make a big push for progress in the reform of the social system.

We will deepen reforms in support of change in the income distribution system. We will take steady steps to advance reform of the old-age insurance system, and allocate a portion of state capital to enlarge social security funds. We will deepen the coordinated reform of medical services, health insurance, and the medicine industry. We will introduce overall reform in public hospitals nationwide, abolish all markups on pharmaceuticals, and make coordinated progress in reforming health care pricing, staffing and remuneration, medicine distribution, and models of health insurance payment. We will continue reforms in education, the cultural sector, and public institutions to unleash society's vast potential for growth.

We will deepen institutional reform to build a sound ecological environment.

We will improve the functional zoning system and the mechanisms for compensating for ecological conservation efforts; we will put in place resource and environment monitoring and early-warning mechanisms; we will launch trials to improve the state natural resource assets management system; and we will introduce an overall plan for establishing a national parks system. All these efforts should provide effective institutional safeguards for building a sound ecological environment.

3. Doing more to unleash the potential of domestic demand

We will push to see that the composition of supply becomes better matched with the composition of demand and that consumption upgrades and effective investment reinforce each other; we will promote coordinated development between regions and between rural and urban areas; and we will strengthen the role of domestic demand in sustaining growth.

We will promote a steady increase in consumer spending.

We need to adapt to changes in consumer demand, improve our policies and measures, and create a better consumer environment.

First, we need to speed up the development of service consumption. We will launch a new round of trials for comprehensive reform in the service sector, and support the non-governmental sector in providing educational, cultural, elderly care, healthcare, and other services. We will encourage development of new service models and cross-sectoral integration, combined medical and elderly care services, cultural and creative services, and other emerging forms of consumption. We will ensure paid vacations are enforced, improve tourist facilities and services, and make a big push to develop rural tourism, recreational tourism, and all-for-one tourism. We will increase information consumption including digital homes and online learning. We will see that communities and rural areas have better access to e-commerce and express delivery services, and encourage the integrated development of physical store sales and online shopping.

Second, we need to boost consumption of quality products. We will guide enterprises in increasing the variety of products, raising their quality, and building the brands of their products. More products sold domestically should be produced on the same production lines, meet the same standards, and be of the same quality as products for export in order to better satisfy the needs of upgrading consumption.

Third, we need to ensure order in the market. We will be strict about investigating and punishing the production and sale of counterfeit and substandard goods, false advertising, and price fraud. We will strengthen the protection of consumer rights; and we will make sure that spending is an enjoyable rather than a disappointing experience for consumers.

We will work proactively to expand effective investment.

We will guide more investment into fields that will help to strengthen weak areas, drive structural adjustment, encourage innovation, and improve people's lives. This year, we will invest 800 billion yuan in railway construction and 1.8 trillion yuan in highway and waterway projects. Construction on another 15 major water conservancy projects will begin; and work on major rail transport, civil and general aviation, and telecommunications infrastructure projects will be sped up. A total of 507.6 billion yuan of investment has been included in the central government budget this year. We will implement and improve policies and measures for encouraging private investment. We will continue to promote public-private partnerships, and improve related policies on preferential pricing, tax, and fee arrangements. Government must take the lead in acting in good faith and must never arbitrarily change agreements, and new officials must not disavow obligations undertaken by their predecessors.