We will adhere to the strategy of expanding domestic consumption and focus on
increasing consumption demand and strengthening the role of consumption in
fueling economic development. First, we will strive to raise urban and rural
incomes. We need to adjust the distribution of incomes, standardize the way
income is distributed, and increase the income of people in the lower and middle
income brackets. To increase rural incomes, we will continue to pursue the
policy of giving more, taking less and loosening control. In particular, we need
to adopt more measures to give more benefits to farmers. All local governments
should make necessary adjustments to the minimum salary system and implement it
strictly, and introduce a minimum hourly wage system. We need to gradually solve
the problem of low wages for rural migrant workers in cities. We must establish
laws and mechanisms for ensuring that wages are paid on time. We will
conscientiously implement the revised Individual Income Tax Law and lower the
tax burden on low- and middle-income people. This year, the government will
appropriately raise basic pension benefits for retired enterprise employees,
subsidies for entitled groups and subsistence allowances for urban residents. We
will reform the civil servant pay system. We will establish a unified national
salary system based on position and rank and a mechanism for regular pay
increases and improve the system of allowances for difficult and remote border
regions, all based on review and standardization of existing allowances and
subsidies. In addition, we will promote reform of the income distribution system
in public service institutions. Second, we will keep expected individual
spending stable and encourage immediate consumption. We will address people's
concerns that increasing consumption will make them unable later to meet basic
living needs by accelerating efforts to improve the social security system and
solve major problems in education, public health and medical care, and housing.
Third, we will work hard to encourage consumption in rural areas. We will
increase efforts to develop rural markets and promote the flow of goods, make
full use of existing rural retail distribution networks, and support urban
wholesale and retail businesses in setting up outlets in the countryside to
stimulate rural consumption. Fourth, we will improve the consumption environment
and consumption-related policies. We will improve housing and public
transportation conditions and take active steps to further develop tourism,
cultural activities, fitness centers and other services. We will effectively
safeguard consumers' lawful rights and interests. We will make appropriate
adjustments to the current consumption tax, standardize and develop consumer
credit, promptly eliminate or revise unsuitable regulations and policies that
discourage consumption, and promote more high-end consumption.
We will maintain fixed asset investment at an appropriate scale, continue to
encourage the growth of some sectors while discouraging the expansion of others,
improve the investment structure and prevent breakneck growth in investment. We
will continue to properly control the availability of land and credit, practice
the strictest possible land management system, and grant loans on the basis of
proper qualifications and market access requirements. We will strictly control
the number of new projects undertaken. We will strengthen weak links and key
areas in economic and social development. We will continue efforts to restrict
excessive real estate investment and lower overheated real estate prices in some
cities. We need to adjust the types of real estate properties on the market by
strictly controlling new high-end real estate projects and concentrating on
building general commercial housing and low-cost housing. We will establish a
sound system for renting affordable housing and a system for leasing housing. We
will establish and standardize order in the real estate and construction
markets, basically clear up all overdue payments related to construction
projects, and promote the sound development of the real estate and construction
industries.
2. Promoting the building of a new socialist countryside
Building a new socialist countryside is a major historic task set at the
Fifth Plenary Session of the Sixteenth Central Committee of the Party, which
will have an overall impact on building a moderately prosperous society in all
respects and modernizing the country. We need to implement a policy of getting
industry to support agriculture and cities to support the countryside,
strengthen support for agriculture, rural areas and farmers, and continue making
reforms in rural systems and innovations in rural institutions to bring about a
rapid and significant change in the overall appearance of the countryside.
The first priority in developing a new socialist countryside is to develop
modern agriculture and promote steady expansion of grain production and
sustained increase in rural incomes. We will stabilize, improve and strengthen
policies supporting agriculture. We will further increase direct subsidies to
grain producers, subsidies for growing superior grain cultivars, and subsidies
for agricultural machinery and tools as well as increase transfer payments to
major grain-producing counties and financially strapped counties. We will
continue and improve the floor price policy for key grain varieties and keep
prices for agricultural supplies from rising too quickly. Central government
budget expenditures for agriculture, rural areas and farmers this year will
total 339.7 billion yuan, 42.2 billion yuan more than last year. We need to
protect arable land, especially basic farmland, stabilize the acreage sown to
grain, and expand overall grain production capacity. We will increase the
country's capacity for innovation in agricultural science and technology and
ability to put scientific and technological advances to practical use, and step
up efforts to disseminate agricultural technology and improve
agriculture-related technical services. We will accelerate reform of the
veterinary medicine management system and development of the animal disease
prevention and control system. We will continue to adjust the structure of
agriculture by promoting development of the livestock and poultry industry,
promoting the industrialization of agriculture, developing secondary and
tertiary industries in rural areas, particularly for processing agricultural
products, helping county economies grow, bringing about an orderly transfer of
the rural workforce to nonagricultural employment in rural and urban areas, and
increasing rural incomes through various channels.
In order to build a new socialist countryside, we must accelerate development
of rural infrastructure. We need to resolutely work to reorient investment by
shifting the government's priority in infrastructure investment to the
countryside. This constitutes a major change. This mainly involves strengthening
basic development of farmland, with the focus on small water conservancy
facilities; improving the system of flood control, drought resistance and
disaster reduction; accelerating construction of infrastructure projects such as
roads, drinking water supplies, methane facilities, electric grids and
communications; improving the living environment in rural areas; and
accelerating development of rural public services, such as education, health and
culture. The main measures we will adopt to accomplish this goal are: gradually
increasing annual investment in agriculture and rural areas from the central and
local government budgets and credit funds, integrating agricultural investment
from all channels to improve capital performance, guiding farmers to invest
capital and labor in public welfare facilities that benefit them directly,
encouraging and guiding the investment of non-state funds in rural development,
and gradually establish an appropriate, stable and effective investment
mechanism. If we work tirelessly, we can bring about a major improvement in
rural infrastructure.
In order to build a new socialist countryside, we must comprehensively carry
out overall rural reform. This year, we will completely rescind the agricultural
tax throughout the country, a tax that China has been collecting for 2,600
years. This is a change of epoch-making significance. The reform of rural taxes
and fees has greatly benefited farmers by eliminating 33.6 billion yuan of
agricultural tax, over 70 billion yuan in the form of the "three deductions"
[for public reserve funds, public welfare funds and management fees, tr.] and
the "five charges" [charges for rural education, family planning, militia
training, rural road construction and subsidies to entitled groups, tr.],
assessments for rural education and other unreasonable fees. Starting this year,
the government will appropriate over 103 billion yuan annually to ensure the
normal operation of town and township governments and meet the needs of rural
compulsory education. This figure is comprised of more than 78 billion yuan in
transfer payments from the central government budget and over 25 billion yuan
from local government budgets. It must be pointed out that after the
agricultural tax is completely rescinded, the task of consolidating the results
of the reform of rural taxes and fees and furthering the reform will remain very
difficult. The key to success is to comprehensively carry out overall rural
reform, including deepening reform of government bodies in towns and townships,
rural compulsory education, and county and township fiscal management systems.
These reforms require adjustments in rural production relationships and directly
involve changes in the rural superstructure, which makes such changes profoundly
significant and difficult to achieve. However, we must unwaveringly implement
them.
The building of a new socialist countryside is a long-term arduous task. We
need to proceed from reality, take measures suited to local conditions, give
guidance tailored to the situation and plan carefully. We need to respect the
wishes of farmers, oppose formalism and coercion, and avoid the herd mentality.
We need to advocate a spirit of self-reliance and hard struggle, be realistic
and pragmatic, and work diligently.
