At Monday's working conference on national economic structural reform held in Chengdu, Chen Deming, the vice chairman of the State Development and Reform Commission, said that China will focus on five key points for reform in 2007; the transformation of government functions and pushing forward the reform of the administrative system; increasing competitiveness and control, accelerating strategic adjustments and the reform of the state-owned economy and enterprises; improving the macro-control system and promoting the reform of the financial and taxation systems; promoting social harmony and expanding the reform of the social structure; coordinating urban and rural development and expanding rural reform.

Simplifying and standardizing administrative examination and approval procedures

This year, the government will focus on the transformation of government functions and push forward the reform of the administrative system. It will stress the construction of a responsible government that serves the people and performs its duties in accordance with regulations and the law. It will endeavor to simplify and standardize procedures for administrative examination and approval as well as improve social management, public services and administrative functions according to the law. It will also increase its research efforts to develop an overall program for the expansion of reform.

Central SOEs to focus on key areas

China will continue to increase its competitiveness and control of power as well as further the restructuring of state-owned economy and enterprises. The government will ask central state-owned enterprises (SOEs) to focus their business on those industries and areas that are closely tied to national security and economic lifelines. It will support qualified enterprises to help them become more successful. Efforts will be made to promote shareholder reforms of large state-owned enterprises and improve the corporate management system. It will also attempt to improve the state-owned assets supervision and management system by launching pilot projects for state-owned assets operation budget formulation and standardizing the distribution relationship between the state and enterprises.

Building standardized government non-tax income system

The government will continue to concentrate on improving the macro-control system, and promoting the reform of the taxation and financial system. The key focuses are accelerating the construction of a public finance system, improving the fiscal transfer payment system, continuing the reform of the budget management system, formulating a comprehensive restructuring program for the transformation of the added-value tax system, and establishing a standardized government non-tax income system. The government will prepare for the implementation of the new enterprise income tax law and improve tax policies to save more energy.

Accelerating shareholder reform of the Agricultural Bank of China

China will work to implement shareholder reforms at the Agricultural Bank of China and further the reform of the China Development Bank. It will strive to promote the construction of a multi-layer capital market and improve direct finance. Much will be done to promote the steady development and reform of the stock, bond, and futures markets. The government will also continue with market-oriented interest rate reforms, and improve the RMB exchange rate formation mechanism.

Income distribution system reform

China aims to promote social harmony and expand the reform of social structures. This will be done primarily by steadily furthering the reform of the income distribution system and implementing various new policies; expanding the reform of the social security system; making medical and work injury insurance accessible to various workers; pushing forward a pilot project for endowment insurance through personal accounts; building a basic medical insurance system for major illnesses for urban residents; promoting injury and major sickness insurance for migrant workers; researching methods to handle trans-regional social insurance accounts; expanding the reform of education, health care and cultural systems; and improving the social management system.

Establishing rural minimum subsistence allowance system

This year, the government will put greater effort into coordinating urban and rural development and expanding rural reform by consolidating and expanding the scope of pilot projects on rural tax reform, accelerating rural financial reform, developing new financial institutions, and fostering various micro-finance organizations. China will waive tuition fees for all students undertaking the compulsory nine years of education in rural areas. It will extend the coverage of the new type of rural cooperative medical care and establish a minimum subsistence allowance system in rural areas. In 2007, the government will release an "opinion on further reform of household registration management" and launch a number of employment pilot projects in urban and rural areas.

Extended reading:

12 documents due in 2007

Promoting non-public sectors of Chinese economy

To date, China has issued 25 documents related to non-public economic sectors. It will release another 12 in 2007, so as to further remove obstacles to the development of non-public sectors.

Chen Deming said that this year, China will gradually straighten out prices of natural gas and oil, appropriately adjust the price of water resources, and accelerate the reform of heating supply prices. Efforts will be made to accelerate the reform of the management system for monopoly industries as well as the electricity, railway, and telecommunication industries, and postal system.

Editor: Yan