The fifth session of the 12th National People's Congress (NPC) opened at the Great Hall of the People on Sunday in Beijing. During the meeting, Premier Li Keqiang delivered a report on the government work.
The following are the hot topics of the report:
Slashing the tax burden of businesses
The trial replacement of business tax with value added tax (VAT) was extended to cover all sectors in 2016, slashing the tax burden of businesses for the year by over 570 billion yuan and reducing tax burdens in every sector.
This year’s deficit-to-GDP ratio is projected to be 3 percent, with the fiscal deficit set at 2.38 trillion yuan, representing a year-on-year increase of 200 billion yuan. To break this down, the projected deficit of the central government is 1.55 trillion yuan, and the projected deficit of local governments is 830 billion yuan. Local government special bonds to be issued will total 800 billion yuan, and local government bonds will continue to be issued to replace their outstanding debt. The main reason for keeping this year’s deficit-to-GDP ratio unchanged is to allow for further reductions in taxes and fees. Over the course of the year, the tax burden on businesses will be further eased by around 350 billion yuan, and business related fees will be further cut by around 200 billion yuan to benefit market entities.
Particular priority was given to cutting overcapacity in the steel and coal sectors last year. Over the year, steel production capacity was cut by more than 65 million metric tons and coal by over 290 million metric tons, going beyond annual targets. Effective assistance was provided to laid-off employees.
This year, the government will further reduce steel production capacity by around 50 million metric tons and shut down at least 150 million metric tons of coal production facilities. At the same time, the government will suspend or postpone construction on or eliminate no less than 50 million kilowatts of coal-fired power generation capacity, in order to guard against and defuse the risks of overcapacity in coal-fired power, improve the efficiency of this sector, and make room for clean energy to develop.
We sped up efforts to promote new types of urbanization in 2016, deepened reform of the household registration system, introduced the residence card system nationwide, and granted urban residency to another 16 million people from rural areas.
The government will deepen the reform of the household registration system. This year, at least 13 million new urban residents will be registered as permanent urban residents. The government will speed up work to introduce the urban residence card system nationwide.
Poverty reduction and elimination
Poor areas and people living in poverty represent the area of greatest weakness we must face as we work to finish building a moderately prosperous society in all respects. We need to do more in implementing targeted poverty reduction and elimination measures. This year the government will further reduce the number of rural residents living in poverty by over 10 million, including 3.4 million to be relocated from inhospitable areas. Central government funding for poverty alleviation will be increased by over 30 percent.
Supporting the real economy
The M2 money supply and aggregate financing are forecasted to grow by around 12 percent in 2017. The government will apply a full range of monetary policy instruments, maintain basic stability in liquidity, see that market interest rates remain at an appropriate level, and improve the transmission mechanism of monetary policy. The government will encourage a greater flow of financial resources into the real economy, particularly in support of agriculture, rural areas, and farmers, and small and micro businesses. The RMB exchange rate will be further liberalized, and the currency’s stable position in the global monetary system will be maintained.
Infrastructure became ever-better able to sustain development in 2016. Over 1,900 kilometers of new high-speed rail lines came into service, and more than 6,700 kilometers of expressways and 290,000 kilometers of rural roads were built or upgraded. Construction picked up pace on urban rail transit facilities and underground utility tunnels. Construction began on 21 major water conservancy projects. The number of 4G mobile communications subscribers grew by 340 million and over 5.5 million kilometers of optical fiber cables were added.
This year, the government 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 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.
The government will step up the development of public facilities in rural areas. A total of 200,000 kilometers of roads will be upgraded or built in rural areas. The government will see that all rural areas have a steady and reliable supply of power and that all electric pumpsets on rural flatlands are connected. Fiber-optic broadband will be extended to 30,000 administrative villages.
Last year, we achieved major breakthroughs in the reform of national defense and the armed forces and made fresh progress and new achievements in our work to make the military more revolutionary, modern, and well-structured.
This year, in pursuing the Party’s goal of strengthening the armed forces in a new era, the government will work to build them through political work, strengthen them through reform, and ensure they are run by law. The government will boost military training and preparedness, so as to ensure that the sovereignty, security, and development interests of China are resolutely and effectively safeguarded.
The government will uphold the Party’s absolute leadership over the armed forces and uphold and implement the system whereby the Chairman of the Central Military Commission assumes overall responsibility over military affairs.
The government will continue to deepen reforms in national defense and the armed forces. The government will strengthen maritime and air defense as well as border control and ensure that important operations related to countering terrorism, safeguarding stability, international peacekeeping, and providing escort in high seas are well organized.
The government will enhance our capacity for innovation in defense-related science and technology and step up the development of advanced logistics and equipment. The government will strengthen national defense mobilization and readiness of reserve forces. The government will continue to promote coordinated, balanced, and compatible development of the economy and national defense, deepen structural reform of defense-related science and technology industries, and intensify military-civilian integration.
Economic globalization is in the fundamental interests of all countries. China will not shift in its commitment to promoting global economic cooperation, will uphold the multilateral trading regime as the main channel of international trade, and will play an active part in multilateral trade negotiations. China is ready to join hands with the other countries involved to fully put into force and implement the Protocol to Amend the Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN, to conclude talks as soon as possible for the Regional Comprehensive Economic Partnership agreement, and to advance the development of the Free Trade Area of the Asia-Pacific. The government will continue to negotiate investment and trade agreements with relevant countries and regions.
China is a responsible country. We have always striven to honor the commitments we have made, and the government will firmly defend our due rights and interests.
Hong Kong, Macao and Taiwan
The government will continue to implement, both to the letter and in spirit, the principle of “one country, two systems,” under which the people of Hong Kong govern Hong Kong, the people of Macao govern Macao, and both regions enjoy a high degree of autonomy. The government will continue to act in strict compliance with China’s Constitution and the basic laws of the Hong Kong and Macao special administrative regions; and the government will ensure that the principle of “one country, two systems” is steadfastly applied in Hong Kong and Macao without being bent or distorted.
We pledge our full support to the chief executives and governments of the two regions in exercising law-based governance, growing their economies, improving people’s wellbeing, advancing democracy, and promoting social harmony. The notion of Hong Kong independence will lead nowhere.
The government will promote closer cooperation between the mainland and Hong Kong and Macao. The government will draw up a plan for the development of a city cluster in the Guangdong-Hong Kong-Macao Greater Bay Area, give full play to the distinctive strengths of Hong Kong and Macao, and elevate their positions and roles in China’s economic development and opening up. We have always had full confidence about ensuring lasting prosperity and stability in Hong Kong and Macao.
The government will thoroughly implement the policies on our work related to Taiwan, uphold the one-China principle, and safeguard the 1992 Consensus as our common political foundation. The government will protect China’s sovereignty and territorial integrity, maintain the peaceful growth of cross-Straits relations, and safeguard peace and stability in the Taiwan Straits. The government will resolutely oppose and contain separatist activities for Taiwan independence. The government will never tolerate any activity, in any form or name, which attempts to separate Taiwan from the motherland.
The government will continue to advance integrated economic and social development between the two sides of the Straits, and make it more convenient for our fellow countrymen and women in Taiwan, particularly young people, to study, work, and live on the mainland. People on both sides of the Taiwan Straits should keep in mind the greater interests of the nation, firmly advance peaceful reunification of China, and jointly create better lives and a bright future for all Chinese.