Full text: Report on the Work of the Government

REPORT ON THE WORK OF THE GOVERNMENT

Delivered at the First Session of the 13th National People’s Congress of the

People’s Republic of China on March 5, 2018

 

 

Li Keqiang

Premier of the State Council

Fellow Deputies,

On behalf of the State Council, I will now report to you on the government’s work of the past five years and lay out what we propose for this year’s work for your deliberation and approval. I also invite comments from the members of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC).

I will begin with a review of our work over the past five years.

The five years since the first session of the 12th National People’s Congress (NPC) have been a truly remarkable five years in the course of our country’s development. Facing an extremely complex environment both at home and abroad, the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core, has rallied and led the Chinese people of all ethnic groups to forge ahead. We have moved forward in a coordinated manner with the five-sphere integrated plan and the four-pronged comprehensive strategy, and made new advances on all fronts of reform, opening up, and socialist modernization.

At its 19th National Congress, the Party established the position in history of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and mapped out an inspiring blueprint and a program of action for securing a decisive victory in building a moderately prosperous society in all respects and for striving for the success of socialism with Chinese characteristics for a new era. This is of great immediate significance and far-reaching historical significance.

All regions and all government departments have strengthened their consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment. The new development philosophy has been thoroughly acted upon, the 12th Five-Year Plan has been successfully completed, and implementation of the 13th Five-Year Plan has seen smooth progress. In economic and social development we have made historic achievements and seen historic change.

Over the past five years, economic strength has reached a new high.

China’s gross domestic product (GDP) has risen from 54 trillion to 82.7 trillion yuan, registering average annual growth of 7.1 percent; and its share in the global economy has grown to roughly 15 percent, up from 11.4 percent. China’s contribution to global growth has exceeded 30 percent. Government revenue has increased from 11.7 trillion to 17.3 trillion yuan. Consumer prices have risen at an average annual rate of 1.9 percent, maintaining a relatively low level of growth. More than 66 million new urban jobs have been added, and our country, with its population of over 1.3 billion, has achieved relatively full employment.

Over the past five years, the structure of the Chinese economy has seen a major transformation.

With the share of the service sector rising from 45.3 to 51.6 percent of the economy, consumption’s contribution to growth has increased from 54.9 to 58.8 percent, becoming the main driver of growth. High-tech manufacturing has achieved an average annual increase of 11.7 percent, and the annual grain yield has reached 600 million metric tons. China’s urbanization rate has risen from 52.6 to 58.5 percent, and more than 80 million people who have relocated from rural to urban areas have gained permanent urban residency.

Over the past five years, innovation-driven development has yielded fruitful outcomes.

China’s investment in research and development (R&D) has grown at an average annual rate of 11 percent, ranking second in the world in scale. The contribution of technological advances to economic growth has risen from 52.2 to 57.5 percent. In manned spaceflight, deep-water exploration, quantum communications, large aircraft development, and more, China has seen a stream of major outcomes of innovation. In high-speed rail, e-commerce, mobile payments, and the sharing economy, China is leading the world.

The Internet Plus model has permeated many different fields and industries. Business startups and innovation are thriving all over the country, and the average number of new businesses opened daily has risen from over 5,000 to more than 16,000. Rapidly emerging new growth drivers are reshaping China’s growth model, are profoundly changing the way we live and work, and have become a new hallmark of China’s innovation-driven development.

Over the past five years, significant headway has been made in reform and opening up.

In reform, we have made strong moves across the board, secured major advances in many areas, and driven deeper in pursuing progress, making breakthroughs in reforms in important fields and at key links and seeing that in the main areas the general frameworks for reform are basically established. Reforms to streamline administration and delegate powers, improve regulation, and optimize services, have driven profound shifts in the functions of government, and significantly strengthened market dynamism and public creativity. Notable achievements have been made in the Belt and Road Initiative (BRI). The composition of both Chinese foreign trade and foreign investment in China has been improved, with volumes ranking among the largest in the world.

Over the past five years, living standards have been constantly improving.

We have made decisive progress in the fight against poverty: More than 68 million people have been lifted out of poverty, including a total of 8.3 million relocated from inhospitable areas, and the poverty headcount ratio has dropped from 10.2 to 3.1 percent. Personal income has increased by an annual average of 7.4 percent, outpacing economic growth and creating the world’s largest middle-income group. Tourist departures have grown from 83 million to over 130 million. Education has seen all-around development. Social old-age pension schemes now cover more than 900 million people, and basic health insurance plans cover 1.35 billion people, forming the largest social safety net in the world. On average, life expectancy has reached 76.7 years. Over 26 million housing units have been rebuilt in rundown urban areas and more than 17 million dilapidated houses have been renovated in rural areas, with the result that more than one hundred million Chinese have moved into new homes.

Over the past five years, the environment has seen gradual improvement.

To address air, water, and soil pollution, we have designed and enforced a ten-point list of measures for each and achieved solid progress. Both energy and water consumption per unit of GDP have fallen more than 20 percent, the release of major pollutants has been consistently declining, and the number of days of heavy air pollution in key cities has fallen 50 percent. Forest coverage has increased by 10.87 million hectares, and the area of desertified land has been reduced by close to 2,000 square kilometers on average each year. Encouraging progress has been made in green development.

In the year just passed, all main targets and tasks for economic and social development were accomplished and performance exceeded expectations. GDP grew 6.9 percent and personal income rose 7.3 percent, both beating the previous year’s growth rates. Around 13.51 million new urban jobs were created, and the jobless rate was at its lowest level in years. Industrial growth began to rebound, and corporate profits increased 21 percent. Government revenue grew 7.4 percent, reversing the slowdown in growth. The total import and export value rose 14.2 percent. Inward foreign investment reached 136.3 billion U.S. dollars, hitting a new all-time high.

The state of play in the economy was good, with growth and quality, structural improvement, and performance each reinforcing the other. This is the result of the cumulative effect of a raft of major policies over the past five years and of consistent efforts in all areas of endeavor.

The past five years have seen groundbreaking achievements on every front and profound and fundamental changes, attracting global attention and bringing all of us in China pride and inspiration.

Over the past five years, we have worked with dedication to implement the decisions and plans made by the Party Central Committee with Comrade Xi Jinping at its core. The following are the highlights of that work:

First, with a commitment to the general principle of pursuing progress while ensuring stability, we have focused on developing new and better approaches to macro regulation, kept major indicators within an appropriate range, and achieved stable, positive economic performance.

The past few years have witnessed anemic world economic recovery, volatility in global financial markets, and a sharp rise in protectionism. In China, structural issues and underlying problems have become more acute, downward pressure on the economy has continued to mount, and we have met with no small number of dilemmas.

In facing this new environment, we have maintained strategic focus and refrained from resorting to a deluge of strong stimulus policies. Instead, we have adapted to, addressed, and steered the new normal in economic development, and taken coordinated steps to ensure steady growth, advance reform, make structural adjustments, improve living standards, and guard against risk. We have made fresh innovations in and refined macro regulation, developed the idea of and ways to achieve range-based regulation, and enhanced targeted, well-timed, and precision regulation.

We have been clear that as long as the major economic indicators are within an acceptable range, with employment growing, incomes increasing, and the environment improving, then our energies should be focused on advancing reform, making structural adjustments, and adding growth drivers.

We have adopted measures that are good for the near term and even better for the long term, made strong moves to advance supply-side structural reform, appropriately expanded aggregate demand, and worked for a dynamic equilibrium of supply and demand at a higher level.

With grit and determination, we have overcome downward pressure on the economy, avoided a “hard landing,” maintained a medium-high growth rate, and promoted structural upgrading. The economic fundamentals that will sustain long-term growth have been cemented and enhanced.

We have continued to follow a proactive fiscal policy and a prudent monetary policy. Despite a fairly big imbalance between government revenue and expenditure, China has led the way in slashing taxes and fees with the aim of using accommodative measures to strengthen the basis for sustained growth. Step by step, we have extended the replacement of business tax with value added tax (VAT) to all sectors across the country, calling time on the 66-year history of business tax. The result so far has been a tax cut of more than 2 trillion yuan. We have also adopted measures like preferential tax policies for small low-profit businesses and an overhaul of different types of fees. All in all, our market entities have seen savings of more than 3 trillion yuan. We have strengthened management over local government debt, and issued local government bonds to replace outstanding debt, cutting interest liability by 1.2 trillion yuan. We have adjusted the structure of government expenditure, put idle funds to work, and ensured the spending for undertaking major projects and meeting basic public needs. The deficit-to-GDP ratio has been kept within 3 percent.

Monetary policy has remained prudent and neutral. The M2 money supply growth rate has been trending downward, while credit and aggregate financing have seen moderate growth. Differentiated policies, such as targeted reserve requirement ratio cuts and targeted re-lending, have been adopted to strengthen support for key fields and weak links. The growth of loans to small and micro businesses has outstripped the average growth in lending. We have reformed and improved the market-based exchange rate mechanism and kept the RMB exchange rate basically stable; and foreign exchange reserves are now rising not falling. We have responded appropriately to abnormal market fluctuations such as the cash crunch, brought better order to the financial markets, prevented and defused risks in key sectors, forestalled systemic risk, and thus safeguarded China’s economic and financial security.

Second, with a commitment to treating supply-side structural reform as our main task, we have focused on fostering new growth drivers and sped up economic structural upgrading.

We have persevered in relying on reform to overcome economic difficulties and address structural imbalances, made a big push to foster emerging industries, overhauled and strengthened traditional industries, and improved the quality and performance of the supply system.

Solid work has moved us forward in the five priority tasks of cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness.

Over the past five years, building on work to cut backward production capacity in the cement, plate glass, and other industries, we have intensified efforts to cut overcapacity, prioritizing industries such as steel and coal; and a 100-billion-yuan fund for rewards and subsidies has been put in place by the central government to support efforts to assist affected employees. We have cut steel production capacity by more than 170 million metric tons and coal production capacity by 800 million metric tons, and over 1.1 million affected employees have been assisted.

Thanks to city-specific policies and category-specific guidance, clear progress has been made in reducing commercial residential housing inventory in third- and fourth-tier cities, and the growth of housing prices in the most popular cities has been brought under control.

We have taken active and prudent steps to deleverage, control the scale of debts, and expand equity finance. The debt-to-asset ratio of industrial enterprises has been consistently declining. Macro leverage ratio is increasing by much smaller margins and is generally stable.

We have used a combination of measures to bring down costs: 30 percent of government-managed funds and fees have been cut; over 60 percent of the fees and charges levied on businesses by the central government have been abolished; the ratio of enterprise contributions to old-age pension, medical insurance, unemployment insurance, and maternity insurance, workers’ compensation, and housing provident fund schemes has been reduced for the time being, and work has been done to lower energy, logistics, and telecommunications costs.

And, with a focus on key issues, we have stepped up efforts to strengthen areas of weakness.

We have sped up the replacement of old growth drivers.

We have taken extensive action under the Internet Plus Initiative, exercised accommodative and prudential regulation, and promoted the extensive application of big data, cloud computing, and the Internet of Things; emerging industries have achieved vigorous growth, and traditional industries have undergone a thorough remodeling.

Implementation of the Made in China 2025 initiative has brought progress in major projects like the building of robust industrial foundations, smart manufacturing, and green manufacturing, and has accelerated the development of advanced manufacturing.

We unveiled reform and development measures to foster modern services; and this has led to a marked rise in new forms of business in the service sector and new service models as well as the integration and upgrading of multiple sectors.

Deepened supply-side structural reform in agriculture has brought the emergence of a large number of new types of agribusiness. The share of appropriately scaled-up farming has increased from 30 to over 40 percent.

We have taken measures to increase the incomes of those in low- and middle-income brackets, and helped to see an upgrading of traditional forms of consumption, and a boom in new forms of consumption. Online retail sales have been growing at an average annual rate of over 30 percent, and total retail sales of consumer goods have enjoyed an average annual increase of 11.3 percent.

We have improved the composition of investment, encouraged private investment, used government investment to play a catalytic role, and guided more funding toward areas that strengthen the economic foundation, enhance sustainability, and improve people’s lives.

China’s in-operation high-speed railways have grown from over 9,000 to 25,000 kilometers, accounting for two thirds of the world’s total. Our expressways have grown from 96,000 to 136,000 kilometers. We have built or upgraded 1.27 million kilometers of rural roads, built 46 new civilian airports, and begun work on 122 major water conservancy projects. We have completed the latest round of rural power grid upgrading, and put in place the largest mobile broadband network in the world.

Over the past five years, new growth drivers have rapidly grown in strength. Economic growth, in the past mainly driven by investment and exports, is now being fueled by consumption, investment, and exports. In the past dependent mainly on secondary industry, growth is now powered by a combination of the primary, secondary, and tertiary industries. This is a major structural transformation that for years our sights had been set on but we were never able to achieve.

Advancing supply-side structural reform demands removing barriers to the market-based allocation of the factors of production and reducing government-imposed transaction costs.

To address the longstanding issues of excessive emphasis on approval procedures, insufficient attention to regulatory processes, and a failure to provide strong services, we have been consistently deepening reforms to streamline administration, delegate powers, improve regulation, and strengthen services. We have sped up efforts to transform government functions, reduced micromanagement and direct intervention, and done more to improve macro regulation, market regulation, and public services.

Over the past five years, the number of items subject to approval by State Council offices and departments has been slashed by 44 percent, the practice of non-administrative approval has been completely put to a stop, the number of business investment items subject to central government approval has been cut by 90 percent, intermediary services needed for obtaining government approval have been cut by 74 percent, and the requirements for professional qualification approval and accreditation have been significantly reduced. The number of items for which central government sets the prices has been cut back by 80 percent, and local government-priced items have been cut down by over 50 percent. Comprehensive reforms have swept the business system, including business registration and registered capital, reducing the time it takes to start a business by over a third.

We have developed new and better ways of conducting compliance oversight, and introduced a new model of oversight combining randomly selected inspectors who inspect randomly selected entities and the prompt release of results. These efforts have made regulation more effective and impartial.

We have rolled out the Internet Plus Government Services model and adopted measures such as the one-stop service model.

Thanks to the above reforms, the business environment has consistently improved, the market is more energized, and people can access government services more easily.

Third, with a commitment to innovation-driven development, and a focus on unlocking public creativity, we have achieved a remarkable overall improvement in innovation capacity and efficiency.

We have put into action the innovation-driven development strategy and worked to build a better ecosystem for innovation, giving shape to innovation involving multiple actors making across-the-board advances.

Research institutes and universities now have greater say over their research; research projects and funding are better managed, and the way that rights and interests relating to scientific and technological advances are managed has undergone reform.

We have moved forward with piloting comprehensive innovation reform, supported Beijing and Shanghai in building themselves into centers for scientific and technological innovation, and set up 14 new national innovation demonstration zones, thus creating a number of regional innovation hubs.

We have boosted the development of a system for technological innovation in which enterprises are the main actors. China has seen the emergence of a number of world-class innovative enterprises and new kinds of R&D institutions.

We have launched and taken bold moves in the nationwide business startup and innovation initiative, adopted supportive policies designed to benefit all entrepreneurs and innovators, and improved incubation systems.

China’s market entities, all types included, now total over 98 million, an increase of more than 70 percent over the past five years. The number of in-force Chinese invention patents issued in China has tripled, and the volume of technology transactions has doubled. In the global race of scientific and technological innovation, China has shifted place, from following others to keeping pace and even leading the pack in more and more areas. Our country has become a globally recognized fertile ground for innovation and business ventures.

Fourth, with a commitment to deepening reform across the board, we have taken major steps to remove institutional barriers, thus steadily boosting the driving forces powering development.

Solid progress has been made in state capital and state-owned enterprise (SOE) reform; the reform to convert SOEs into standard companies has now basically been completed; and efforts to merge and restructure, reduce the organizational levels in, and improve the quality and efficiency of, SOEs have made good progress. The performance of SOEs has been much improved, with profits last year growing by 23.5 percent. We have deepened reform in sectors like energy, rail, and the salt industry.

Market access to the non-public sector has been expanded. An integrated registration system for immovable property has been put in place, and the property rights protection system has been improved.

Fiscal and tax reforms have made major progress. We have introduced the requirement nationwide for government budgets and final accounts to be released to the public, developed a system based mainly on tax sharing for dividing revenue between central and local government, launched the reform to define the respective financial powers and expenditure responsibilities of central and local government, and significantly scaled up general transfer payments from central to local government, while also cutting by two thirds the number of items for which special purpose transfer payments are made.

We have largely lifted controls on interest rates, established a deposit insurance system, encouraged large and medium commercial banks to set up inclusive finance divisions, deepened the reform of policy-backed and development financial institutions, and strengthened the mechanisms for coordinating financial regulation.

We have made steady progress in the comprehensive reform of education, improved the mechanisms for promoting more balanced development of urban and rural compulsory education, and reformed the examination and enrollment systems.

We have established unified basic pension and health insurance schemes for rural and non-working urban residents, and brought government office and public institution pension schemes into line with enterprise schemes. We have unveiled a plan for the appropriation of a portion of state capital to replenish social security funds.

We have carried out coordinated medical service, medical insurance, and pharmaceutical reforms. We have introduced comprehensive reform in all public hospitals, rescinded the longstanding policy of allowing hospitals to profit from higher priced medicine, and made breakthroughs in the reform of approval systems for medicine and medical devices.

We have pursued reform to separate rural land ownership rights, contract rights, and use rights, and already seen over 80 percent of contracted rural land covered by this reform. We have reformed the system for purchasing and stockpiling important agricultural products.

We have improved the functional zoning system, established performance evaluation and accountability systems for ecological conservation, and instituted the river chief and lake chief systems. We have piloted a system placing government environmental offices below the provincial level directly under the supervision of provincial-level environmental offices.

The deepening of reform in each and every field has given a boost to sustained, healthy economic and social development.

Fifth, with a commitment to China’s fundamental policy of opening up, we have focused on promoting win-win cooperation, and significantly improved the performance of our country’s open economy.

We have launched and worked with other countries in the Belt and Road Initiative. We initiated the Asian Infrastructure Investment Bank, set up the Silk Road Fund, and launched a number of major connectivity and economic and trade cooperation initiatives.

Pilot free trade zones have been established in Shanghai and 10 other provinces and cities. A number of successful outcomes from pilot reforms are now being applied nationwide.

We have reformed the cost-sharing mechanism for export tax rebates, and the central government now pays the full sum of increases in export tax rebates. We have set up 13 comprehensive experimental zones for cross-border e-commerce. Single-window document processing for international trade has been applied nationwide, cutting the average time for customs clearance by over half. Imports and exports have rebounded and steadily grown.

For foreign investment, we have replaced the approval system with a negative list model, and have cut restrictions by two thirds. The composition of foreign investment has improved, with investment in high-tech industries doubling. We have intensified efforts to attract talent, and the number of foreign experts working in China has grown by 40 percent.

We have guided the healthy development of outbound investment. We have moved forward with international cooperation on production capacity; high-speed rail, nuclear power, and other types of Chinese equipment have entered international markets. We have signed or upgraded eight free trade agreements. We have launched the Shanghai-Hong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect, and the Bond Connect. The RMB was included in the IMF’s Special Drawing Rights basket, representing a major step forward in its internationalization.

China has opened its doors wider to the world. This opening has played a powerful role in our own development, and it presents important opportunities for the rest of the world.

Sixth, with a commitment to implementing the coordinated regional development and new urbanization strategies, we have promoted more balanced development, and seen new growth poles and belts developing faster.

We have actively pursued the coordinated development of Beijing, Tianjin, and Hebei, and the development of the Yangtze Economic Belt, drawn up and implemented related plans, and undertaken a number of key projects. We have unveiled a whole series of reforms and innovative measures to see the western region develop, northeast China revitalized, the central region rise, and the eastern region spearhead development. We have stepped up support for old revolutionary base areas, areas with large ethnic minority populations, border areas, and poor areas, and strengthened work to support Tibet, Xinjiang, and Qinghai. We have steadily moved forward with protecting and developing maritime resources.

We have implemented plans for developing major city clusters, and pursued more balanced development of small, medium, and large cities, and small towns. The vast majority of cities in China have eased restrictions on permanent residency. A residence card system has been put into effect nationwide, and basic urban public services now cover all permanent residents. Development between urban and rural areas and between regions has become better coordinated.

Seventh, with a commitment to a people-centered development philosophy, we have endeavored to ensure and improve living standards, and the people are increasingly feeling the benefit.

Despite fiscal constraints, we have consistently increased spending on improving people’s living standards. We have made comprehensive moves in targeted poverty reduction and alleviation, and built a robust working mechanism with central government responsible for overall planning, provincial-level governments assuming overall responsibility, and city and county governments responsible for program implementation. Over the past five years, the central government has appropriated over 280 billion yuan to fund poverty reduction.

We have implemented a proactive employment policy and ensured that key target groups have better access to employment.

We have been committed to prioritizing the development of education; and government spending on education has remained above four percent of GDP. In rural areas, we have improved conditions in badly built and poorly operated schools providing compulsory education, and increased the pay packages of teachers, and our Better Nutrition Plan has benefited more than 36 million students. We have launched an initiative to build world-class universities and world-class disciplines. The number of students from rural and poor areas enrolled in key universities through special programs has grown from 10,000 to 100,000. We have increased financial aid to students from families in financial difficulty studying in all types of schools, giving out 430 million grants in total. The average length of schooling of the working-age population has been raised to 10.5 years.

Government subsidies for basic medical insurance schemes have been increased from 240 to 450 yuan per person; the serious disease insurance system is basically in place, and has already benefited more than 17 million people; the costs of hospitalization can now be settled where incurred; and the development of tiered medical diagnosis and treatment and healthcare consortiums has picked up pace.

We have consistently made appropriate increases to basic old-age pensions for retirees. We have raised subsistence allowances, benefits for entitled groups, and other allowances, and improved the social assistance system, ensuring the livelihoods of close to 60 million people on subsistence allowances or living in extreme poverty. We have put in place a system to provide living allowances for people with disabilities in financial difficulty and nursing care subsidies for people with serious disabilities, a system that has benefited over 21 million people. All couples can now have two children.

We have strengthened public cultural services at the community level, moved faster to develop cultural programs, and seen the cultural industry grow at an average annual rate of over 13 percent. We have carried out Fitness-for-All programs, which are now in full swing; and Chinese athletes have excelled in competition.

Eighth, with a commitment to achieving harmony between human and nature, we have taken major steps to address pollution, and achieved notable progress in ecological conservation.

We have established the notion that lucid waters and lush mountains are invaluable assets and acted with resolve and intensity as never before to strengthen environmental protection.

We have struck out hard against air pollution, thus achieving a drop of over 30 percent in the average density of fine particulate matter (PM2.5) in key areas. We have done more to reduce the use of low quality coal, pushed for progress in energy conservation and emission reductions in key industries, and seen 71 percent of coal-fired power plants achieving ultra-low emissions. We have improved the energy mix, cutting the share of coal consumption by 8.1 percentage points and increasing the share of clean energy consumption by 6.3 percentage points. We have improved fuel quality, and taken over 20 million high-emission and old vehicles off the roads.

We have strengthened prevention and control measures against water pollution in key drainage basins and sea areas, and achieved zero growth in chemical fertilizer and pesticide use. We have pursued major ecological conservation and restoration projects, expanded the coverage of initiatives to turn marginal farmland into forest, grassland, and wetlands, and intensified comprehensive efforts to curb desertification, rock desertification, and soil erosion.

We have launched central government inspections on environmental protection, investigated and prosecuted cases involving legal violations, and strengthened accountability. We worked toward and saw that the Paris Agreement was put into force; China has played an important role in responding to global climate change.

Ninth, with a commitment to fully performing government functions in accordance with law, we have focused on enhancing and making innovations in social governance, and ensured social harmony and stability.

We have submitted proposals to the NPC Standing Committee on formulating or revising 95 laws, formulated or revised 195 sets of administrative regulations, and revised or rescinded a large number of government department regulations. Lists of powers and obligations have been formulated and released by provincial, city, and county government departments. We have introduced State Council accountability inspections and special inspections, and commended and created policy incentives for those working proactively and doing an outstanding job, while holding strictly to account those failing to fulfill their duties.

We have been making innovations in urban and rural primary level governance. The system for handling public complaints has been improved. The coverage of legal aid has been expanded. We have promoted reform and improvements in workplace safety, and seen a continued drop in both the total number of accidents and the number of serious and major accidents. We have reformed and improved food and drug regulation and strengthened risk control over all related processes.

We have strengthened work on preventing, reducing, and providing relief for disasters, including earthquakes and serious flooding, and built stronger emergency response mechanisms employing a division of responsibilities between levels and close coordination. With this we have minimized the damage and loss inflicted by disasters to the greatest possible extent.

China’s national security is better safeguarded. We have improved the crime prevention and control system, worked in accordance with law to hit back against all types of crime and illegal behavior, and effectively safeguarded public security.

We have implemented the Party Central Committee’s decisions on exercising full and strict Party self-governance and done more to improve Party conduct, build a clean government, and fight corruption. We have taken extensive action in raising awareness of and putting into practice the Party’s mass line, in the Three Stricts and Three Earnests campaign, and in the drive to see that Party members develop a good understanding of the Party Constitution, Party regulations, and General Secretary Xi Jinping’s major policy addresses and live up to Party standards. We have worked hard to ensure compliance with the Central Committee’s eight-point decision on improving conduct and staying engaged with the people and worked nonstop to address the practice of formalities for formalities’ sake, bureaucratism, hedonism, and extravagance. We have strictly enforced the three-point State Council decision on curbing government spending.

We have enforced strict controls over the construction of new government buildings and over the total number of people on the government payroll; and spending on official overseas visits, official vehicles, and official hospitality has been significantly reduced.

We have strengthened government supervision and auditing-based oversight. We have taken strong steps to investigate, prosecute, and address violations of laws and regulations and severely punished those who have committed corruption. This anti-corruption campaign has built into a crushing tide, and is being consolidated and developed.

Fellow Deputies,

Over the past five years, we have made new improvements in work related to ethnic groups, religion, and overseas Chinese nationals. We have supported faster development in areas with large ethnic minority populations, and have seen efforts to promote ethnic unity and progress truly paying off. We have actively guided religions in adapting to socialist society. Overseas Chinese nationals, Chinese nationals who have returned from overseas, and the relatives of overseas Chinese nationals who reside in China have made their own unique contributions to the country’s modernization.

Over the past five years, under the leadership of the Party Central Committee and the Central Military Commission, we have embarked on a new stage in strengthening and energizing the armed forces. We have developed a military strategy for new conditions; convened the Gutian military political work meeting; and taken extensive steps to see that the armed forces are built on political loyalty, strengthened through reform and technology, and run in accordance with law. As a result, our people’s armed forces have achieved a remodeling of their political ecosystem, of the way they are organized, of the structure of their forces, and of their conduct and image.

We have undertaken major missions involving the protection of maritime rights, countering terrorism and maintaining stability, disaster rescue and relief, international peacekeeping, escort services in the Gulf of Aden, and humanitarian rescue. With the cooperation of all involved, we have basically completed the task of reducing military personnel by 300,000. Military equipment has been significantly modernized and military-civilian integration has been deepened. We have seen closer unity between the military and government and between the military and the people. The people’s armed forces, full of new drive, have taken solid strides toward building themselves into a powerful military with Chinese characteristics.

Over the past five years, fresh progress has been made in work related to Hong Kong, Macao, and Taiwan. The practice of “one country, two systems” has been consistently enriched and developed; the authority of China’s Constitution and the basic laws has become more evident in Hong Kong and Macao. Exchanges and cooperation between the mainland and Hong Kong and Macao have been steadily enhanced; the construction of the Hong Kong-Zhuhai-Macao Bridge has been completed, and Hong Kong and Macao have thrived and remained stable.

We have upheld the one-China principle and the 1992 Consensus, strengthened cross-Strait economic and cultural exchanges and cooperation, and held a historic meeting between the leaders of the two sides. We have resolutely opposed and deterred separatist forces advocating Taiwan independence, firmly safeguarding peace and stability in the Taiwan Strait.

Over the past five years, we have pursued distinctively Chinese major country diplomacy on all fronts. We successfully hosted the first Belt and Road Forum for International Cooperation, the 22nd APEC Economic Leaders Meeting, the G20 Hangzhou Summit, the BRICS Xiamen Summit, and other major diplomatic events in China.

President Xi Jinping and other Chinese leaders have visited many countries and attended major events including the United Nations summits, the Climate Change Conferences, World Economic Forum meetings, and the East Asian Leaders Meetings on Cooperation. China’s diplomatic agenda has been further advanced on every front.

China has called for building a community with a shared future for humanity and has contributed more Chinese ideas to the reform of the global governance system. Notable achievements have been made in our country’s economic diplomacy and people-to-people and cultural exchanges. We have been resolute in upholding China’s sovereignty and maritime rights and interests. As a responsible major country, China has played a constructive role in addressing international and regional hotspot issues, thus making significant new contributions to global peace and development.

Fellow Deputies,

Looking back on the past five years, we have encountered a great many interwoven problems and a stream of risks and challenges. Both at home and abroad, there have been many new developments, developments that we have not faced since reform and opening up began. The achievements we have made in China’s reform and development have certainly not come easily. We owe them to the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, to the sound guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and to the concerted efforts of the Party, the military, and the people of all our nation’s ethnic groups.

On behalf of the State Council, I wish to express sincere thanks to the people of all our ethnic groups, and to all other political parties, people’s organizations, and public figures from all sectors of society. I express our sincere appreciation to our fellow countrymen and women in the Hong Kong and Macao special administrative regions, in Taiwan, and overseas. I also wish to express our sincere thanks to the governments of other countries, international organizations, and friends from all over the world who have shown understanding and support for China in its endeavor to modernize.

As the Chinese saying goes, when all is calm forget not danger; when all is well be awake to woes. We are keenly aware that China is still in the primary stage of socialism and will remain so for a long time to come, that it remains the largest developing country in the world, and that it faces a number of acute problems caused by unbalanced and inadequate development that so far remain unsolved.

The internal forces powering economic growth are not yet sufficient, China’s ability to innovate needs to be stronger, and the quality and performance of development need to be improved. Some enterprises, particularly small and medium ones, are finding it tough going. Growth in private investment is weak; some regions still face considerable downward economic pressure, and risks and potential dangers in the financial and other sectors are not to be ignored.

Poverty alleviation remains a formidable task; the foundations of agriculture and rural infrastructure remain weak, and the disparities in development between rural and urban areas, between regions, and in income distribution remain substantial. Serious and major workplace accidents happen all too often. People still have a lot of complaints about air quality, environmental sanitation, food and drug safety, housing, education, healthcare, employment, and elderly care.

The transformation of government functions is not yet where it should be. In the work of government there are areas where we fall short. Some reform measures and policies have not been fully implemented. Some officials are weak on awareness that they are there to serve and must uphold the rule of law, and some lack commitment to their work and willingness to bear the weight of responsibility. Bureaucratism and the practice of formalities for formalities’ sake exist to varying degrees. There are many complaints from the people and the business sector about the difficulty of accessing government services and the excessive array of charges. In some sectors misconduct and corruption are still a common problem.

With a deep sense of responsibility to our country and people, with courage in the face of adversity, and with determination that won’t be broken, we must give our work all we’ve got, to make sure that the people’s government does not let the people down.

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