China sets economic reform priorities for 2015

BEIJING - China's State Council, the cabinet, on Monday unveiled this year's priorities for further economic reforms.

The reforms -- to streamline administration and deregulate power to lower levels, promote the yuan's convertibility under capital account, and launch a trial program to connect the Shenzhen and Hong Kong stock exchanges -- aim to add new impetus to the country's development, the State Council said in a statement on the government website.

The central government promised to implement existed reform policies and roll out new pro-growth measures this year to stimulate the market and seek new growth potential.

China's economic growth in the first quarter of this year slowed to 7 percent, the lowest level since the financial crisis, which prompted policy makers to accelerate an economic overhaul.

In the statement, the government vowed to cut red tape, loosen control on market access and investment, and improve pricing mechanisms for public services including medicine and natural gas.

Specifically, the government said that it will promote public-private partnerships to attract private capital into infrastructure construction and public enterprises.

The government will push reforms of State-owned enterprises in key industries including electricity by reorganizing and consolidating them to improve efficiency, and it will support private firms to make the market less monopolistic.

In terms of budget and taxation, the central government plans to step up the establishment of a normative mechanism for local authorities to raise funds and a system to assess risks in their debts and sound early warnings.

It also pledged to continue to implement taxation reform, expanding value-added tax to the construction, property and finance sectors and adjusting resource tax, personal income tax and environmental protection tax.

In the financial sector, China will speed up the development of private banks and small financial institutions, and issue a guideline to ensure healthy development of Internet finance.

The country will also open up its financial sector and build a financial mechanism that better benefits the real economy, according to the statement.

The state council said the government will further liberalize interest rates, make the yuan more flexible against other currencies and promote the use of renminbi in cross-border settlement.

Reforms on urbanization, widening funding channels for city construction, improving the current rigid household registration system, and accelerating reforms on rural land to boost agriculture were all also identified as priorities.

The government promised more opening up measures, including transforming trade structures, better management of foreign investment, encouraging industrial capacity cooperation, replicating successful free trade zones elsewhere and promoting the Belt and Road Initiative.

In addition, China will make more effort to protect the environment through energy conservation, emission cuts and stricter regulation, the statement said.