Full text: Report on China's economic, social development plan

III. Major Tasks for Economic and Social Development in 2016

In 2016, with the focus on adapting to and guiding the new normal in economic development and applying the new development philosophy, we will carry out work in the following nine areas to ensure a good start to the 13th Five-Year Plan:

1. Making progress in major tasks for supply-side structural reform

We will adjust existing resources so as to upgrade traditional drivers for development, while also incorporating additional effective resources so as to foster new drivers; at the same time, we will make the supply structure more adaptable and flexible with a view to increasing the impetus for sustainable growth.

1) We will actively and steadily address overcapacity. We will put greater emphasis on making use of market forces, economic measures and rule of law approaches; on applying targeted policies tailored to local conditions and specific industries and enterprises in an orderly fashion; and on addressing both the symptoms and root causes of overcapacity by establishing a permanent market-based mechanism for adjusting enterprises' production capacity. We will adopt strict standards for environmental protection, energy consumption, safety, and technology; tighten control on the expansion of production capacity; enforce strict financial and credit rules; work with enterprises on a case-by-case basis to carry out mergers, reorganizations, debt restructuring, or bankruptcy through reorganization or liquidation; and actively yet prudently deal with enterprises that have long been indebted, insolvent, and uncompetitive. We will increase support through fiscal, tax, financial, and land policies to help turn around and upgrade the steel, coal, and other industries. When addressing the issue of overcapacity, priority will be given to ensuring proper arrangements are made for workers who are laid off, and funds for rewards and subsidies will be set up to ensure they are resettled and provided with employment.

2) We will work to lower business costs. We should cut the cost of operating for enterprises in the real economy, working hard to reduce transaction costs imposed by government, labor costs, the tax burden, financing costs, energy costs, land-use expenses, and logistics costs, and we will also explore the possibility of reducing social insurance premiums. We will streamline the government review and approval process as well as related procedures for enterprises, and help them make innovations in management. We will raise minimum wages by a reasonable amount. We will continue to revise and streamline taxes and fees; draw up lists and catalogs to manage all fees and charges relating to enterprises; replace business tax with VAT in all industries; accelerate reform of the resource tax; and research the feasibility of streamlining and consolidating old-age insurance, medical insurance, unemployment insurance, workers' compensation, maternity insurance, and the housing provident fund. Improvements will be made to the housing provident fund system and the proportion that enterprises contribute to the fund will be reduced by an appropriate amount. We will further liberalize interest rates, develop equity financing, increase the issuance of bonds, and steadily reduce overall financing costs for enterprises. We will accelerate structural reform of the electricity, heat, petroleum, and natural gas industries, and advance reform of the commodity distribution system.

3) We will reduce commodity housing stock in a well-ordered way. In carrying out reform of the housing system, we will focus on meeting the demand of new urban residents by appropriately lowering transaction costs, encouraging rural migrant workers to purchase homes in small and medium-sized cities, and implementing policies to provide incentives for first-time home buyers. In order to develop the housing rental market, we will encourage both individuals and investors from various types of institutions to purchase commodity housing stock so as to increase the supply of rental housing. We will expand the use of direct monetary housing subsidies for people displaced by the rebuilding of run-down areas and other housing requisition projects, and also provide subsidies for people living in public rental housing. We will ensure efficient use of the housing provident fund, and gradually allow self-employed people and rural migrant workers, who have adequate financial resources, to participate in the housing provident fund scheme on a voluntary basis.

4) We will work to strengthen points of weakness. In a bid to win the battle against poverty, we will integrate the task of poverty alleviation with the tasks of increasing effective supply and addressing overcapacity. We will support the upgrading of equipment and technology in enterprises. We will see to it that manufacturing becomes higher-end, smarter, more eco-friendly, and better able to provide services; and with the aim of fostering and developing emerging industries, we will use measures such as injecting capital into the investment fund for advanced manufacturing, making equity investments, and subsidizing investment to finance the implementation of a number of demonstration programs that are project-oriented and industry-specific. We will also work to reinforce points of weakness in our hard and soft infrastructure. With the focus on developing integrated transportation hubs, we will step up efforts to extend water, power, and gas supply networks and roads to every "last kilometer" in rural areas; develop next-generation information infrastructure, new-energy vehicle facilities, urban underground pipeline networks, gas storage facilities, intercity transportation infrastructure, and urban and rural logistics networks; and promote ecological protection and environmental improvement. We will promote integrated development of transportation and logistics infrastructure so as to improve their overall efficiency and returns. We will comprehensively develop education, speed up efforts to promote education in the central and western regions, and strengthen training for rural migrant workers, commercial farmers, former military personnel, laid-off workers, and the unemployed. We will protect and restore mountain, water, forest, and farmland ecosystems, step up environmental governance efforts, reform the foundational systems for environmental governance, increase our capacity to conserve ecosystems and improve the environment, and build ecological security shields.

5) We will guard against and defuse financial and other risks. In order to keep the economy operating within an appropriate range and ensure the continuity and stability of development, we will improve the monitoring and early-warning system for economic performance, conduct preparatory research to maintain policy options for different eventualities, create new methods of macro regulation and improve existing ones, and increase our capacity for predicting and guarding against risks. We will strengthen the system for macro-prudential financial regulation, comprehensively oversee and regulate systemically important financial institutions, financial holding companies, and key financial infrastructures. We will set up sound anticipatory mechanisms for monitoring, assessing, and responding to financial risks, and improve contingency plans for handling the risks in the stock market, foreign exchange market, and bond market as well as the mechanism for financial institutions exiting the market. We will support banks in writing off nonperforming loans and systematically reduce credit default risks. We will regulate all financing activities; launch a campaign to address risks related to Internet finance; crack down harder on financial fraud and illegal fundraising; and work to ensure that no systemic or regional financial risks occur. To ease the imbalance between revenue and expenditures, we will better regulate the ceilings imposed on local government debt, improve budgetary management, and advance the systems for giving early warning against risks and for the assessment and oversight of debt. We will also improve the unified management of government debt and the way in which local government bonds are issued. We will increase support for the real economy, and prevent the aggravation and spread of debt chains and broken chains of funding among enterprises. We will implement policies to support enterprises in keeping employment stable, subsidize enterprises' contribution to social insurance premiums, and reduce taxes and fees, while also increasing support for reemployment. We will improve and innovate social governance and intensify efforts to identify, mediate, and defuse social conflicts so as to ensure social harmony and stability.

2. Tapping the potential of domestic demand with new ideas and measures

We will effectively promote both the fundamental role of consumer spending and the key role of investment in stimulating growth and further consolidate the foundation of domestic demand, thereby ensuring that the economy operates within an appropriate range.

1) We will promote consumer spending in new areas and guide new forms of supply to create new drivers of growth. In keeping pace with the upgrading of the private consumption mix, we will work to promote innovation in supply, thereby accelerating the formation of a pattern of positive interaction between consumption and supply and of coordination between the upgrade in demand and the upgrade in industry. Total retail sales of consumer goods are expected to increase by around 11% in 2016.

First, we will use all possible measures to enhance people's ability to consume. We will work to increase the incomes of low- and middle-income groups. We will implement an income distribution policy that is conducive to the commoditization and application of scientific and technological advances. We will improve the mechanism for stimulating the growth of rural income, and explore ways to improve the mechanism for distributing revenues from the appreciation in land values between collectives and the state.

Second, we will nurture and expand new areas of consumer spending. We will keep housing, vehicle, and other major consumption stable. We will boost broadband speeds, lower rates for Internet services, and speed up efforts to combine online-offline activities, while also working to expand consumption in areas such as wearable devices, smart homes, and digital media. We will develop new forms of consumption in relation to services; effectively implement the system of paid vacations; develop rural tourism, tourism to sites of significance in early CPC history, ecological tourism, as well as travel for study; expand consumption by the elderly and the young in an orderly manner; and expand and guide cultural consumption. At the same time as we develop general aviation, cruise liners, yachts, and other emerging areas of consumption, we will also advocate green consumption that helps conserve resources and improve the environment. We will unleash the potential for consumption in rural areas.

Third, we will increase effective supply and unleash potential consumer demand. We will encourage and support local governments and enterprises in intensifying their efforts to extend broadband connectivity to rural villages, develop information infrastructure in small and medium-sized cities as well as civil space infrastructure, and promote the development of tourism infrastructure and public service facilities. We will support the development of cultural entertainment complexes in cities, and help open large stadiums and gymnasiums funded by nongovernmental investors to the public free of charge or at a lower price. We will provide more products and services related to health, household, elderly care, long-term care, and cultural and creative industries.

Fourth, we will improve the consumption environment. We will improve the level of standardization in all industries and improve the mechanism for protecting consumers' rights and interests. We will launch campaigns to improve the supply of consumer goods, and introduce a system of punitive damages against producers whose products do not meet quality standards. We will improve policies related to tariffs on consumer goods. We will implement the food safety strategy, and establish sound systems for food safety standards and for ensuring product traceability. We will improve drug quality. We will tighten oversight of prices and step up efforts to counter monopolistic pricing to safeguard fair market competition.

2) We will strengthen points of weakness, adjust the economic structure, and improve the performance of investment. While ensuring investment in key areas and for weak links, we will innovate the way in which government-managed funds are used, and use central government budgetary investment and special development funds to attract more investment from non-governmental sources. We will also intensify efforts to shore up weak spots and increase effective investment. Total fixed-asset investment is projected to increase by around 10.5% in 2016.

First, we will further improve the use of budgetary investment. Appropriation for investment in the central government budget this year is planned to be 500 billion yuan. This investment will mainly go toward government-subsidized housing; grain production and water conservancy; railway construction in the central and western regions; scientific and technological innovation; energy conservation, environmental protection, and ecological improvement; education, health, culture, and other social programs; as well as toward the development of old revolutionary base areas, ethnic minority areas, border areas, and poor areas.

Second, we will give full play to the leading role of special development funds. An appropriate amount of capital will be raised in a market-based manner for special development funds on a quarterly basis. We will encourage nongovernmental capital to increase in step with government development funds, so that government investment and credit funds can produce positive results together. Corporate bonds issuance will be expanded and the issuance of new-type corporate bonds will be encouraged, such as those for developing urban utility tunnels, parking lots, strategic emerging industries, and elderly care services, for building and upgrading power distribution grids, for supporting entrepreneurship and innovation incubators, and for launching eco-friendly initiatives.

Third, we will develop an investment plan on a rolling three-year basis. We will build up the number of government investment projects in reserve so that rolling groups of projects can be approved, launched, and completed one after another; such a continuous, rolling reserve mechanism will help to maintain a beneficial cycle of government investment.

Fourth, we will work to stimulate nongovernmental investment. We will make overall arrangements for investment funds from the central government budget and special development funds, giving priority to developing PPP projects that are in line with government criteria. We will also further relax restrictions on market access to open up more channels for private investment. The formulation of the regulations on government investment, the regulations on franchising of infrastructure and public utilities, and the regulations concerning the management of investment projects that are subject to government review and reporting will all be accelerated.

Fifth, we will strengthen major construction projects in key areas and areas of weakness. We will increase efforts to press ahead with the key projects in the 13th Five-Year Plan as well as other major projects, such as those to reduce poverty; rebuild run-down areas; upgrade rural power grids and urban power distribution grids; develop major water conservancy projects, railways, highways, and urban rail transit facilities; control water pollution in key water basins; and promote technological upgrading in enterprises. Construction will begin on 20 major water conservancy projects. We will launch major strategic projects including the 100-200-300 Transportation Program, the project to develop wind and photovoltaic power bases in northwestern China, and the project to promote military-civilian integration. We will strengthen management in relation to investments and tighten the supervision and inspection of projects.

Box 14: The 100-200-300 Transportation Program

3. Channeling more effort into reforms in major areas and in relation to key issues

To ensure that market vitality remains constant, we will promptly introduce a range of measures aimed at leading reform efforts and put more focus on the efficiency of institutional supply.

1) We will intensify efforts to streamline administration, delegate more powers, improving regulation, and provide better services. We will continue to delegate the power of or cancel the requirement for government review on more items and ensure that the delegation of powers is better coordinated. We will make the lists of all local governments' powers and responsibilities available to the public, carry out trials for compiling lists of powers and responsibilities of departments under the State Council, and begin trials to use a negative list for market access in certain regions. We will press ahead with coordinated law enforcement and oversight using big data, and coordinate oversight through market, credit, and legal measures. We will move faster to set up a credit rating system, expand the scope and services of the platform for sharing information on credit nationwide, and strengthen the mechanism to give joint incentives to those who act in good faith and to take joint punitive actions against those who act in bad faith. We will implement a national unified system of credit rating codes; press ahead with the reform to replace the separate business license, organization code certificate, and taxation registration certificate with a unified business license with a unified social credit code; and conduct trials to separate operating permits and business licenses. We will speed up the reform of making the trade of public resources more market-based, and establish a unified trading platform by integrating existing ones. We will improve the way in which the government provides public services, expand Internet Plus government services, promote better information sharing between government departments, and move faster to standardize government review and approval. We will ensure a unified registration system for immovable property is implemented at community level.

2) We will deepen reform of the investment and financing systems. We will make innovations in investment management and create new mechanisms for investment and financing; further streamline investment approval procedures; reduce, combine, and regulate the items required for a construction project when applying for government approval; improve the online platform for reviewing, approving, and monitoring investment projects; and put in place a new system for carrying out the combined review and approval of investment projects for enterprises. We will improve the mechanism for facilitating cooperation between the government, banks, enterprises, and nongovernmental investors, and promote application of PPP models such as franchise operations to encourage nongovernmental capital's participation in the development and operation of major government projects.

3) We will deepen reform of prices. We will work to lift pricing controls over competitive areas in the power, petroleum, natural gas, and transportation industries. We will extend to more areas the trial price reform for electricity transmission and distribution, and improve the policy for adjusting prices for electricity generated by environmentally friendly facilities. We will improve the pricing mechanism for refined oil products. We will steadily advance reform of medical service prices. Comprehensive reform of the pricing for water used in agriculture will be carried out. We will establish sound rules for market prices, strengthen price oversight, and safeguard order in relation to prices and fees.

4) We will meet head-on the most difficult problems related to SOE reform. We will step up efforts to reorganize or establish state capital investment companies and operating companies. We will reform SOEs by introducing a mixed ownership structure, and begin trials and demonstrations in key industries such as railway, civil aviation, telecommunications, and defense. We will carry out structural reform of the power, petroleum, natural gas, and salt industries. We will promulgate guidelines on further improving the property rights system.

5) We will accelerate reform of the fiscal and tax systems. We will introduce guidelines on appropriately dividing powers and spending responsibilities between the central and local governments. We will increase the percentage of funds transferred from the central government budget for state capital operations to the general public budget. We will expand the reform to replace business tax with VAT to the construction, real estate, financial, and consumer service industries, and make the input VAT on enterprises' new immovable property deductible, so as to ensure that the tax burden on all industries can be reduced rather than increased. We will implement reform to levy the price-based resource tax on all resource products, advance reform of the excise tax and the environmental protection tax, and steadily carry out reform of personal income tax that is based on adjusted gross income as well as specific types of income.

6) We will advance financial reform. We will diversify the system of financial institutions; deepen reform of state-owned commercial banks, developmental financial institutions, and policy-backed financial institutions; and continue to conventionalize the establishment of private banks. We will develop inclusive finance to increase financial services for micro, small, and medium-sized businesses as well as for rural areas, paying particular attention to poor areas. We will promote the sound, well-regulated development of new forms of business in the financial sector. We will take steady steps to realize RMB capital account convertibility. We will promote the sound development of a multi-level capital market and improve the system for financial oversight and regulation. A catastrophe insurance system will be established.

In addition, we will continue to deepen reform in areas related to people's wellbeing and social programs, including reform of the education, elderly care, cultural, medical, and health care systems and reform of the airspace management system.

4. Implementing the innovation-driven development strategy

In pursuing innovative development, we will fully implement the strategy for innovation-driven development, deepen efforts to promote entrepreneurship and innovation across society, and deepen reform of the science and technology management system. We will expand the resources, increase the space, and improve the environment for stimulating the enthusiasm and potential for innovation and entrepreneurship across all sectors of society, particularly enterprises.

1) We will increase the supply of resources for innovation. We will promote the development of major national science and technology infrastructure and national laboratories and industrial innovation centers. Comprehensive national science centers will be established in areas with a concentration of major science and technology infrastructure, and a new group of major science and technology programs and projects will be launched. We will systematically conduct pilot reforms for all-round innovation, and organize the implementation of the project to develop 100 top innovative enterprises.

2) We will accelerate the implementation of the action plan for entrepreneurship and innovation. We will help to establish more entrepreneurship and innovation demonstration centers; create more platforms to support crowd innovation, crowdsourcing, crowd support, and crowdfunding; and develop maker spaces, particularly spaces for specialized crowd innovation. We will develop the sharing economy. Local authorities and large corporations will be encouraged to establish venture capital, entrepreneurship and innovation platforms, and science and technology innovation centers. We will focus on supporting the development of platforms for business incubation, start-up assistance, and public services for start-ups and innovation. We will move forward with the Internet Plus action plan and the innovation project to promote open, big data. We will put in place high-speed, mobile, secure, and ubiquitous next-generation information infrastructure, intensify efforts to implement information technology development projects that benefit the general public, and improve the mechanisms for providing universal service in telecommunications. The Online Silk Road Agenda will be initiated. We will continue to make the National Week for Entrepreneurship and Innovation a success and support the development of more events that are geared toward promoting entrepreneurship and innovation.

3) We will develop strategic emerging industries. We will promptly make overall arrangements for developing infrastructure, public resource repositories, and global innovation networks to underpin the development of strategic emerging industries. We will carry out additional major programs and projects in strategically important fields such as high-performance integrated circuits, new-type displays, space technology applications, general aviation, and biomedicine. A national development fund for strategic industries will be established, trials will be carried out to provide protection against financing risks, and we will promote the development of strategic emerging industry clusters.

4) We will improve the core competitiveness of the manufacturing sector. We will deepen efforts to implement the Made in China 2025 strategy. With a focus on major areas and key issues, we will strive to make breakthroughs in core technologies and ensure the industrial application of these technologies. We will accelerate development of smart manufacturing technology and equipment, and promote the sound development of rail transit, new energy vehicles, pharmaceuticals, petrochemical, coal chemicals, and food industries. We will carry out activities to improve quality and branding within the manufacturing sector, and strengthen the national quality infrastructure of China.

5) We will accelerate the high-quality, efficient development of the service sector. In accordance with the two guidelines in relation to accelerating the development of producer services and consumer services, we will further relax controls for market access in the service sector, level the playing field, and ensure that producer service industries become more specialized and move toward the higher end of the value chain while consumer service industries produce more refined and higher-quality products. Innovation will be promoted in high-tech service industries. Another group of national trials for comprehensive reform in the service sector will be carried out, from which transferable experiences and applicable practices will be promptly spread to other areas.

6) We will improve the policies and environment for encouraging innovative development. We will grant extra tax deductions for research and development costs, improve preferential tax policies for new- and high-tech companies and science and technology business incubators, and implement a mechanism to subsidize the initial costs of insuring new materials and key parts and components. Reform of colleges and research institutes will continue to move ahead, regulations will be formulated to make it possible for researchers to take on part-time work, create their own start-ups or pursue on-the-job inventions, and an income distribution mechanism to encourage entrepreneurship and innovation will be formed.

5. Improving the foundation of agriculture

Our support for major development tasks will not be perfunctory; we will ensure that the investment momentum in agriculture and rural areas does not diminish, and that total investment continues to increase. In 2016, total grain output will stand at over 550 million metric tons.

1) We will guarantee food security in China. We will hold provincial governors responsible for food security across the board and improve the mechanism under which the central and local authorities work together to ensure food security. In order to ensure that grain production, cultivated land acreage, and production capacity all remain stable, we will make explorations into establishing functional zones for grain production and protective areas for the production of major agricultural products. We will guarantee grain production in major grain-producing areas, especially in the core areas for grain production. We will complete our work on designating and providing protection for permanent basic cropland nationwide, and will strengthen the development of high-quality farmland, major agricultural product-producing centers, national seed cultivation and production centers and regional centers for cultivating superior crop varieties, and grain storage and logistics. Actions will be taken to protect and improve the quality of cultivated land. The subsidy for purchasing superior crop varieties, the direct subsidy for grain growers, and general subsidies for purchasing agricultural supplies will all be integrated into a single agricultural subsidy. Improvements will be made to the mechanism for subsidizing major grain- and hog-producing counties as well as other major agricultural production areas. We will improve the price-setting mechanism for grain and other important agricultural products as well as the system for their purchase and storage. We will develop the grain industry, and expand the coverage of policy-based agricultural insurance to ensure better protection against agricultural risks.

2) We will promote the integrated development of the primary, secondary, and tertiary industries in rural areas. We will coordinate the production of food, cash, and feed crops and the development of the farming, forestry, livestock, and fishing industries, and promote integrated planting, breeding, and processing operations; at the same time, we will nurture new types of agribusiness and fully engage the multiple functions of agriculture. Pilot demonstration projects for rural industrial integration will be carried out in about 100 counties, 1,000 townships and 100,000 villages. We will improve the mechanism for integrating farmers' interests into agricultural industry chains so that farmers can receive more benefits as rural industrial integration produces more value. The branding of agricultural products will be improved by making the agricultural industry chain more procedure-based and brand-development focused and by tightening production management, product certification, and post-certification supervision. We will improve the modern distribution system for agricultural products and supplies as well as cold-chain logistics networks for agricultural products. We will ensure the online marketing and offline distribution of agricultural products are integrated. We will deepen reform of the rural collective property rights system as well as reform of state farms on reclaimed land, collective forest tenure, state forestry farms, farmland irrigation and water conservancy, and rural supply and marketing cooperatives.

3) We will promote the sustainable development of agriculture. We will see to it that farmers move more quickly to adjust what and how much they grow or breed, particularly in relation to corn. We will formulate and implement a plan to let cropland and grassland lie fallow and to impose a moratorium on fishing in certain rivers and lakes. We will extend to more areas the trials for comprehensively dealing with pollution from non-point agricultural sources and for utilizing and conserving chernozem soil in the northeast. We will also launch trials to address the overdevelopment of surface water and step up efforts to deal with the heavy-metal pollution of cultivated land and the over-extraction of groundwater. We will establish pilot demonstration zones for sustainable agricultural development.

4) We will make further progress in building a new socialist countryside. We will make innovations in the investment and financing systems and mechanisms for rural infrastructure. We will continue to improve the power supply, water supply, transportation, and communications facilities in rural areas and the comprehensive water conservancy and meteorological systems for preventing and mitigating disasters. We will launch a project to consolidate and build on the achievements made in ensuring safe drinking water in rural areas, and we will improve the living environment for rural residents and promote the recycling and safe disposal of agricultural waste. We will prioritize the development of social programs in rural areas and in cities and towns where a relatively large number of people from rural areas take up employment and become urban residents. We will promote the coordinated development of the New Urbanization and the building of a new countryside.

6. Promoting coordinated and integrated development between regions and between urban and rural areas

In pursuing coordinated development, we will promote coordination between regions and integration between urban and rural areas. We will foster synergy between the Three Initiatives (the Belt and Road Initiative, the coordinated development of the Beijing-Tianjin-Hebei region, and the development of the Yangtze River Economic Belt) and the coordinated development of the western, northeastern, central, and eastern regions to form a new pattern of regional development that gives play to the leading role of core areas and makes it possible for different regions to work together.

1) We will focus on implementing the Three Initiatives. We will coordinate work to advance the Belt and Road Initiative. We will fully implement the plan for the coordinated development of the Beijing-Tianjin-Hebei region, research and implement policies and measures related to controlling the number of new projects launched and effectively carrying out existing ones, launch projects to relieve Beijing of functions nonessential to its role as China' s capital, continue to support the three major areas-integrated transportation, ecological conservation and environmental protection, and industrial upgrading and relocation-in making initial breakthroughs, strengthen the trials and demonstration projects for innovation-driven development, and accelerate the establishment of the systems and mechanisms for coordinated development. In order to focus on ecological conservation and pursue green development in the Yangtze River Economic Belt, we will give top priority to restoring the ecological environment in the Yangtze River valley, while pressing ahead with the effort to develop a green, ecological corridor, a high-level integrated multidimensional transportation corridor, and a modern industrial corridor; and we will also encourage city clusters in the Yangtze River Delta, along the middle reaches of the Yangtze, and in the Chengdu-Chongqing region to lead the development of the Yangtze River Economic Belt.

2) We will press ahead with the coordinated development of the western, northeastern, central, and eastern regions. We will support Ningxia, Guizhou, and other parts of the western region in developing open inland economies, each with its own distinctive features, and help to establish innovation platforms and systems. We will increase investment in infrastructure and other needed areas in the central and western regions, step up efforts to protect and restore the ecological environment, and cultivate and expand competitive industries that take advantage of local strengths. We will implement a new round of strategies for revitalizing the northeast and other old industrial bases, and promote the development of city clusters along the Harbin-Dalian Economic Belt. We will introduce a new ten-year plan to promote the rise of the central region; drive forward the development of major economic zones such as the city clusters along the middle reaches of the Yangtze, the Central Plains Economic Zone, and the city cluster along the Yangtze in Anhui Province; press ahead with the development of the eco-economic belts along the Huai and Han rivers; and support the development of clean energy production centers in Shanxi. We will continue to support the exemplary role of the eastern region in leading the rest of the country in pursuing reform and innovation, transforming and upgrading industries, and improving the quality and performance of the economy. We will increase efforts to turn Hainan into an international tourist island. We will work to develop the marine economy and build demonstration zones for this purpose. We will move forward with the development of state-level new areas, demonstration zones for industrial relocation, and other major function platforms, and encourage all localities to lead the way and explore new paths in the reform of systems and mechanisms and in the pursuit of coordinated development between regions. Successful practices that have been developed in national experimental zones for integrated, complete reform will be applied to other regions in an orderly manner. We will promote the integrated development of key areas and support city clusters with suitable conditions in exploring the further integration of urban development.

Box 15: New Strategies for Revitalizing the Northeast and Other Old Industrial Bases

3) We will advance people-centered New Urbanization. We will implement the plan to grant urban household registration to 100 million people. We will deepen the implementation of the guidelines on promoting the New Urbanization; accelerate reform of the household registration system and implementation of the residence certificate system; establish a sound mechanism for adjusting the land designated for construction, development funds, and transfer payments in line with the number of migrant workers that have been granted urban household registration in an area; and encourage and guide rural migrant workers in obtaining urban household registration. We will put urban land held in reserve for construction to better use and carry out trial reforms relating to rural land requisition, the marketization of rural collective land designated for business-related construction, and the rural land used for private housing. A plan for the national urban system will be drawn up. We will continue to promote the cultivation of emerging small and medium-sized cities, small towns with unique features, and new models of urban development, and, where conditions permit, we will help development zones and land border areas to improve the overall functions of cities. Great efforts will be directed toward developing smart cities, green cities, and sponge cities. We will develop urban utility tunnels and ensure construction starts on 2,000 kilometers of such tunnels. We will move faster to develop intercity railways in city clusters in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Pearl River Delta, and the Chengdu-Chongqing region.

Box 16: The New Urbanization

7. Promoting green, circular, and low-carbon development

In pursuing green development, we will drive forward the revolution in energy generation and consumption to make development more eco-friendly.

1) We will move faster to build functional zones. We will revise the plan for functional zoning, implement a negative list of industries for key ecosystem service zones, release a national functional zoning map and catalogs of major agricultural production zones and key ecosystem service zones, and draw up and implement provincial-level plans for marine functional zoning. We will carry out trials for spatial planning at provincial level and conduct research on establishing a long-term monitoring and early-warning system for resource and environmental carrying capacity.

2) We will use energy and resources more efficiently. We will release the 2030 strategy for revolutionizing energy generation and consumption, push forward the transformation and development of the energy sector, and exercise control over both the total amount and intensity of energy consumption. In order to continue the dynamic development of renewable energy, we will work to address the issue of idle capacity in water, wind, and solar power by increasing the capacity of power grids to absorb electricity generated from renewable energy sources. We will actively develop distributed energy and smart grids, and apply an energy-saving, low-carbon approach to the management of power distribution. In order to expedite the growth of industries in relation to energy conservation, environmental protection, and ecological improvement, we will carry out green manufacturing programs, support green and clean production along with a comprehensive eco-friendly approach to the use of resources, and carry out major energy conservation and environmental protection projects. We will promote circular operations within industrial parks, a circular approach to constructing industrial systems, and pilot and demonstration projects for a circular economy. A plan for increasing the energy efficiency of buildings and promote the construction of green buildings will be implemented throughout the construction industry chain. We will take comprehensive measures to build a water-conserving society, and promote efficient and intensive use of land.

3) We will improve the quality of the environment and ecosystems. We will fully implement the action plans for preventing and controlling air and water pollution, release and implement an action plan for addressing soil pollution, and remain persistent in the fight against smog and water pollution. We will strictly control the expansion of coal production capacity and the capacity of coal-fired power plants, ensure cleaner use of coal in non-industrial sectors, expand the use of electricity to replace less environmentally friendly forms of energy and promote the use of electricity generated from renewable energy sources, and move faster to upgrade coal-fired power plants and the quality of fuel across the board. Third party governance will be introduced in the treatment of environmental pollution. We will launch a new round of efforts to return marginal cultivated land to forest or grassland, and intensify efforts to carry out the national afforestation project. We will move steadily forward with the establishment of a system of national parks. We will continue to advance the comprehensive governance of the water environment in key water basins and the environment in key areas, such as those at the source of dust storms affecting Beijing and Tianjin, areas afflicted by the spread of stony deserts, and areas where grazing land has been returned to grassland. A major biodiversity protection project will be launched. We will step up the ecological conservation of lakes and wetlands and establish ecological red lines for forests, grasslands, wetlands and the ocean. We will improve the mechanisms for compensating ecological conservation efforts. We will ensure the implementation of environmental impact assessment for strategies and plans and enforce stricter environmental standards for project approval. We will carry out ecological rehabilitation in cities to restore and improve their ecological functions. Pilot programs will be launched to place county- and prefecture-level environmental monitoring, inspection, and law enforcement bodies directly under the jurisdiction of provincial-level environmental bodies.

4) We will promote low-carbon development. We will continue to push forward pilot and demonstration programs for low-carbon development, move faster to create a national market for carbon emission rights trading, and formulate a complete set of rules and regulations concerning such trading and its oversight. We will constructively participate in international negotiations, work to ensure the proper design and implementation of follow-up mechanisms for the agreement reached at the 2015 United Nations Climate Change Conference in Paris, play an active role in guiding the rule-making process for global climate governance, and continue to strengthen South-South cooperation on climate change.

Box 17: Green and Low-Carbon Development

8. Improving the performance of the open economy

In pursuing open development, we will improve the plan for regional opening up, increase outbound investment and international cooperation, work to optimize imports and exports, actively utilize foreign capital, cultivate new strengths to give us a competitive edge internationally, and play an effective role in global economic governance.

1) We will ensure the successful implementation of the Silk Road Economic Belt and the 21st Century Maritime Silk Road Initiative. We will increase the cohesion between the development strategy of China and those of other countries along the routes, steadily carry out signature projects aimed at strengthening connectivity and increasing energy and resource cooperation, build up a reserve of major projects for the Belt and Road Initiative, and set up a number of patterns for bilateral and multilateral cooperation. We will actively advance the development of international economic cooperation corridors, such as the China-Mongolia-Russia corridor and the China-Indochina Peninsula corridor. We will coordinate the development of China-Europe freight train routes, simplify customs clearance procedures along the lines, and expedite the building of international logistics gateways. We will steadily construct strategic maritime hubs and ensure that maritime trade routes are unobstructed. Information platforms will be developed, such as the official website of the Belt and Road Initiative. We will actively encourage Chinese culture and traditional Chinese medicine to extend their reach overseas, further develop and open up border areas, upgrade both border and cross-border economic cooperation zones, and enhance international and regional cooperation with neighboring countries.

2) We will expand international cooperation on industrial capacity and equipment manufacturing. We will create a project reserve for industrial-capacity cooperation based on key industries and countries. We will set up a sound mechanism for connecting our provinces, regions and leading enterprises with key countries, and improve the system for managing major risks. We will move faster to make arrangements for bilateral industrial-capacity cooperation and make full use of multilateral platforms to promote effective cooperation; we will actively engage in cooperation with developed countries on the third market, so as to support Chinese technologies, equipment, standards, and services in "going global" . We will improve related fiscal and financial policies, set up outbound RMB cooperative funds and bilateral and multilateral industrial-capacity cooperation funds, and encourage cooperation between financial institutions and enterprises in this area. In 2016, China' s non-financial outward direct investment is projected to be approximately US$130 billion, an increase of around 10%.

3) We will promote the steady growth and structural adjustment of foreign trade. We will effectively apply the policy of export tax rebates. We will put into action the policies and measures for reviewing and regulating fees related to imports and exports, strictly enforce the system of lists and catalogs of fees related to foreign trade, and accelerate the building of the Single Window System and the integration of customs clearance procedures to enhance trade facilitation. We will encourage processing trade to move to the central and western regions and to extend toward the medium-high end of the industry chain. We will encourage the development of new business models for foreign trade, push forward the development of integrated pilot zones for cross-border E-commerce while also expanding the scope of the pilot scheme, and support the building of overseas storehouses and exhibition centers. We will promote the integrated development of trade in goods and in services and vigorously support the export of services in finance, insurance, logistics, and maintenance. We will adopt a more active import policy to support the import of advanced technology and equipment and important parts and components; increase the reserve of important energy and resources; and appropriately increase the import of consumer goods. We will deepen bilateral and multilateral economic and trade cooperation, build an international network of high-standard free trade areas, step up negotiations on the Regional Comprehensive Economic Partnership Agreement, accelerate negotiations on free trade such as those on the China-Japan-RoK Free Trade Area, and facilitate negotiations on investment agreements with the United States and the European Union.

4) We will use foreign capital more effectively. We will continue to improve the business environment. We will advance reform to introduce a negative list in managing foreign investment. The service sector will be further opened up in areas such as finance, education, elderly care, culture, telecommunications, the Internet, trade, and logistics; the manufacturing sector will also be opened wider and direct foreign investments will be encouraged toward the high end of traditional industries, strategic emerging industries, and modern services. The catalog of industries with local strengths in central and western regions for foreign investment will be updated to support the relocation of foreign-invested industries to these regions. We will complete a timely review of and promote the experiences from pilot free trade zones and continue to expand the pilot scheme to other regions. We will promote the innovation-driven growth of development zones and update the catalog of development zones that have been approved and published by the state. Reforms of the foreign investment management system and foreign debt management will be deepened, and the system for carrying out security reviews of foreign investments will be improved. Non-financial foreign direct investment is expected to be approximately US$128 billion in 2016.

9. Working to safeguard and improve living standards

In pursuing shared development, we will give greater prominence to improving people' s standard of living, take strong and targeted measures to reduce poverty, deepen reform and innovation in key areas concerning public services, and make every effort to ensure the supply of basic public services.

1) We will move forward with targeted measures to fight poverty across the board. We will support development and poverty reduction in contiguous poor areas, launch the action plan for revitalizing the key old revolutionary base areas where poverty is an issue, and speed up the development of all old revolutionary base areas. We will also boost support for alleviating poverty in border areas and areas with concentrations of ethnic minorities. We will work hard to improve infrastructure and basic public services in poor areas, with a priority on roads, water supply, power, and Internet access. A great deal of effort will be devoted to ensuring key poverty alleviation programs are implemented. We will continue to support the development of Xinjiang, Tibet, and the Tibetan ethnic areas in Sichuan, Yunnan, Gansu, and Qinghai provinces, increasing central government support for these areas, and scaling up one-to-one assistance programs.

Box 18: Key Poverty Alleviation Programs

2) We will provide employment support to help meet the people' s basic needs. With a view to providing coordinated support to priority groups, such as college graduates, migrant workers, and those having difficulty finding employment, to help them start a business or find employment, we will work to properly resettle workers laid off due to the phasing-out of excess production capacity, carry out the program for promoting the employment of college graduates and providing them with business start-up guidance, flesh out the public service system for employment and business start-ups, and deepen the implementation of the pilot program for supporting rural migrant workers in starting businesses in their hometowns. We will strengthen community-level employment and start-up service facilities and increase employment assistance to ensure people' s basic needs are met. We will fully leverage the role of strategic emerging industries, new forms of business, and major state projects in encouraging employment and business start-ups, while fostering new sources of job creation. We will also promote flexible employment and non-standard employment.

3) We will strengthen the key links of social security. We will release an overall plan for old-age insurance reform, further raise basic pension benefits for retirees, and work to place the social pooling accounts of workers' old-age insurance under unified national management. We will formulate methods for diverting a portion of state capital into social security funds. We will comprehensively advance the integration of the basic medical insurance schemes for rural and non-working urban residents, raise the annual government subsidy for these two schemes to 420 yuan per person, accelerate our work to enable people to settle medical bills incurred in any locality via their basic medical insurance accounts, and increase the cohesion between basic medical insurance and other schemes, such as major disease insurance, medical assistance, and assistance for emergency disease treatment. We will coordinate the development of social assistance systems for urban and rural residents and improve the system for providing services and insurance to people with disabilities and children living in difficult conditions. We will continue to build government-subsidized housing in urban areas and improve the housing conditions of both low- and middle-income groups and people facing difficulties. In 2016, we will renovate six million units of housing in run-down urban areas and 3.14 million dilapidated rural houses.

4) We will see to it that all sectors of society become more involved in providing public services and more people benefit from them. We will establish a national list of basic public services, carry out the national project to upgrade services for the general population, and improve facilities for compulsory education, medical and health care, public cultural services, elderly care, community sports, care and nursing for people with disabilities, social welfare, and basic funeral and interment services. We will increase the provision of public-interest pre-school education, refine the distribution of schools in rural areas, and move faster to help public schools providing compulsory education in urban and rural areas meet standards and to make senior secondary education universal. Some regular institutions of higher learning in developed regions will be selected to implement the program for setting an enrollment quota for students from central and western regions, and we will carry out the program for regular institutions of higher learning to enroll a set number of students from poor areas with pre-conditions for employment after graduation; these programs will help to ensure students from rural and poor areas are unobstructed in continuing their education. We will improve the modern vocational education system and launch programs to integrate vocational education with industry. We will ensure the quality of teaching and the capacity for innovation within institutions of higher learning are improved, and encourage regular undergraduate colleges to shift their focus toward providing applied education if they are in a position to do so. We will see to it that the education resources of schools and educational institutions of all types and at all levels are made available for the provision of urban and rural community-level education as well as education for the elderly. In 2016, regular institutions of higher learning are projected to enroll 7.05 million undergraduate students and 818,000 graduate students. We will speed up the development of the program to ensure a healthy population, reinforce weak areas in the medical services system, better allocate medical and health care resources, strengthen the training of general practitioners and pediatricians, and accelerate the development of tiered medical diagnosis and treatment. We will fully implement the policy for allowing one couple to have two children, enhance the system for providing maternal and child care and related support policies, and promote balanced growth of the population. We will actively develop traditional Chinese medicine and the medicine of ethnic minorities. We will move forward with the trials for comprehensive reform of the elderly services. We will improve basic public service policies so as to facilitate better integration of the migrant population in cities. To promote socialist cultural and ethical progress, we will accelerate cultural reform and development; encourage philosophy and the social sciences to flourish; and develop literature, art, the press, publishing, radio, television, film, and archives. We will develop new types of Chinese-style think tanks. We will accelerate the development of sports such as soccer and winter sports.

We will deepen cooperation with Hong Kong and Macao in the areas of investment, the economy, and trade; put into practice the agreement on trade in services with Hong Kong and Macao under the framework of Closer Economic Partnership Arrangements (CEPA); open the country' s interior wider to Hong Kong and Macao; and comprehensively upgrade the CEPA. We will support Hong Kong and Macao in participating in the development of the Belt and Road Initiative. We will move faster to develop the platforms in Qianhai, Nansha, and Hengqin among others for cooperation between Guangdong and Hong Kong and Macao, and deepen regional cooperation in the pan-Pearl River Delta. We will provide further support for Macao in its efforts to build a platform to facilitate business and trade cooperation between China and Portuguese language countries and appropriately diversify its economy. We will continue to promote the development of cross-Straits economic and trade cooperation to benefit the people on both sides of the Taiwan Straits.

Fellow Deputies,

Accomplishing the work for economic and social development in this first year of the 13th Five-Year Plan is an onerous but important task. We will unite even closer around the CPC Central Committee with Comrade Xi Jinping as General Secretary, hold high the great banner of socialism with Chinese characteristics, take Deng Xiaoping Theory, the Theory of Three Represents, and the Scientific Outlook on Development as our guide, and fully implement the guidelines from General Secretary Xi Jinping's major political addresses. We will willingly accept the oversight of the NPC, and seek comments and suggestions from the CPPCC National Committee with an open mind. Let us pool together our hearts and our energy to overcome the difficulties ahead, and work with creativity to ensure a good start to the 13th Five-Year Plan and sustain steady and sound economic and social development.

Tables and Figures

1. Performance of the Main Targets in the 2015 Plan for National Economic and Social Development

2. The Primary, Secondary, and The Tertiary Industries as a Percentage of GDP

3. Urban Jobs Newly Created

4. Non-Financial Inward and Outward Foreign Direct Investment

5. Grain Output

6. Rate of Decline in Energy Consumption per Unit of GDP

7. Increases in Urban and Rural Incomes and the Ratio of Urban Income to Rural Income

8. Urban Government-subsidized Housing Projects and Renovation of Dilapidated Rural Houses

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