REPORT ON THE IMPLEMENTATION OF THE 2015 PLAN FOR NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT AND

ON THE 2016 DRAFT PLAN FOR NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT

Delivered at the Fourth Session of the

Twelfth National People's Congress on March 5, 2016

National Development and Reform Commission

The official version of this report will be released by Xinhua News Agency.

Fell ow Deputies, The National Development and Reform Commission has been entrusted by the State

Council to submit this report on the implementation of the 2015 plan and on the 2016 draft

plan for national economic and social development to the Fourth Session of the Twelfth

National People's Congress (NPC) for your deliberation and also for comments from the

members of the National Committee of the Chinese People's Political Consultative Conference

(CPPCC).

I. Implementation of the 2015 Plan for

National Economic and Social Development

Last year, China faced a complex international economic environment, mountiog

downward pressure on its economy, and a marked increase in the number of risks and

challenges; despite this, we ensured that the ovetall implementation of the 2015 Plan for

National Economic and Social Development was successful. This was as a result of the efforts

of all regions and departments which, under the correct leadership of the Central Committee of

the Communist Party of China (CPC) and the State Council, followed the general principle of

making progress while keeping performance stable, worked to adapt to the new normal in

economic development, earnestly implemented the 2015 plan approved at the Third Session of

the Twelfth NPC, acted in line with the review of the plan by the NPC's Financial and

Economic Affairs Committee, and worked steadfastly to achieve good results in all respects.

Overall, we managed to sustain steady economic development while also ensuring progress and

improvement. Major targets and tasks set forth for 2015 were accomplished, marking a

successful conclusion to the 12th Five-Year Plan, and helping China's development move to

the next level.

1. We continued to improve our macroeconomic poliry and maintained a medium-high rate I!{ growth. We

developed new ideas and methods for macro regulation, and on the basis of range-based

regulation, we strengthened both targeted and well-timed regulation. Domestic demand became

a stronger economic driver, and the international market share of China's exports contioued to

increase. China's gross domestic product (GDP) reached 67.67 trillion yuan, an increase of

6. 9%, meaning the target set at the beginning of the year has been achieved.

1) Investment plqyed the key role in driving economic growth. Strengthening points of weakness and

adjusting the economic structure were our primary focus when increasing the level of effective

investment. To utilize the construction of major projects to stimulate investment growth, we

improved the structure of investment from the central government budget, established and

earmarked capital for special development funds, and adopted a wide range of measures to

encourage and attract nongovernmental investment. As a result, considerable progress was

achieved in the construction of major projects in 11 categories. Tots! fixed-asset investment for

the year rose by 9.8%, of which 64.2% came from nongovernmental sources (excluding rural

households).

2) Consumption potential was .forther exploited. Steady progress was achieved in six major

projects aimed at stimulating consumption, and the three trillion yuan investment in these six projects contributed to consumption worth 2.8 trillion yuan. Tourism, online shopping,

1

new-energy vehicles, and other new growth areas in consumer spending continued to grow,

and total retail sales of consumer goods for the yeru: rose by 10. 7%. Box 1: 11 Categories of Major Projects for Investment

im•estm.enl: fu•tlllin.€; 2.6& trillion yuan.

•

•

•

•

•

•

•

•

•

Information and power, oil, and gas supply networks: 18 projects and two subsidiary projects, with

a total investment of 809.1 billion yuan. 128A

Clean energy: 15 projects, totaling 348.7 billion yuan . Gmin and water conservancy~ 28 v:ith

Transportation: 50 projects, totaling 726.6 billion yuan . .H,.lith<md ekl•:riv care: a yuan.

Energy ami. mineral. resources: 14 projects, with a 142.6 billion yuan investment .

Moden>ll>giiatiics: one 1.60_ biUion yuan.

Urban rail transit: 27 projects, totaling 20.1 billion yuan.

·.MJ'Ilm:fi;;ctu~in:g: >1X 4.2 yuan. Emerging mdnstries: six subsidiary projects, with a 13.1 billion yuan investment .

forjill:O."""Itet setole<os; supportthe developeorot of

to rTttal m:eas; build

dem<>n<rmcric>n.s for :infor.mation. m

lieJr si:Cti>r.s. The number of 4G mobile COJililaru"lic:,ri<>n s•>br:nribeJts increased 290 million and

mobile Internet traffic grew 103%.

Giving impetus to green consumption. The purchase tax on passenger vehicles with an engine

displacement of 1.6 liters or less was halved; the oonstruction of charging facilities for electric vehicles

was accelerated; new-energy vehicles were exempted from traffic and purchase rest"lictions; and

subsidies were introduced for the production of energy-efficient products. The sales of new-energy

vehicles saw a year-on-year increase of 340%.

ccifiljS£ for: fcmd loans v;e:te :raiserl

Increasing consumer spending on tourism and leisure. Comprehensive measures were adopted to

enoourage investment in and spending on tourism; hnplementation of the system of paid vacations was

promoted; oversight over the tourism market was strengthened; and a project was initiated to increase

rutal income through the development of rural tourism The number of domestic tourist trips made in

2015 increased by 10.5%.

conS<lm>er SJ[Jeritdtr>g em and basic cultural ser-vices

as _well as Box office receipts

sa:w an increase of 48 .. 7°/o ove:r tl1e yeat.

Promoting consumption in elderly care, domestic services, and health setolces. Policies

promoting the development of elderly setolces were hnproved; the development of nongovernmental

hospitals was encouraged; the integration of medical and health care with elderly care services was

accelerated, as was the development of the elderly care and health services system; and an oversight

2

mechanism was established to ensure that the prices of services provided by elderly care institutions are

market-based.

3) The economic structure was forther improved. In tenns of the contribution to economic growth,

consumption far outweighed investment, making a 66.4% contribution, while the tertiary industry accounted for far more than the secondary industry. The value-added of the tertiary industry accounted for over half of GDP for the first time, reaching 50.5%. Development

between urban and rural areas and between regions became more balanced and coordinated.

The New Urbanization saw positive progress, with permanent urban residents now accounting

for 56.1% of the population.

4) The overall emplqyment situation remained stable. New measures to increase employment and

business start-ups were introduced, and entrepreneurship .and innovation began to make a

bigger contribution to increasing employment. An additional 13.12 million urban jobs were

created throughout the year. The registered urban unemployment rate stood at 4.05% at the

end of2015.

5) Overall prices rose moderatefy. The consumer price index (CPI) rose by 1.4%. We intensified

oversight in relation to prices and charges and increased law enforcement to combat

monopolistic pricing. In total, we investigated and dealt with 34,200 cases of pricing violations

and imposed economic penalties totaling 10.477 billion yuan in accordance with the law. Our

work in this area also helped reduce the burden on enterprises by about 8.9 billion yuan. 2. We deepened riform and opening up and stimulated market vitafi!y and social creativity. We

continued to streamline administration, delegate more powers, improving regulation, and

provide better services. Progress was made in reforms in key areas, and the building of new

systems for an open economy was accelerated.

1) The reform of the government review and approval !JSfem continued. We cancelled the requirement

for or delegated the power of government review on 311 items, cancelled all non-administrative

review, exempted 214 items from review and approval conducted by local governments on

behalf of the central government, and cancelled the requirement for approval and verification

of 123 vocational qualifications. Seventy percent of the intermediary services involved in the

review and approval practices of State Council bodies were cancelled. The requirement for

pre-registration government review and approval on 18 items was cancelled, and these items

are now listed as preliminaries that can be prepared by enterprises themselves. For the purpose

of streamlining administration and delegating powers, initial steps were taken to establish the

three lists and four platforms. Comprehensive steps were taken nationwide to replace the

separate business license, organization code certificate, and taxation registration certificate with

a unified business license with a unified social credit code. A total of 4.439 million enterprises

were registered in 2015, an increase of 21.6%. The provisional regulations on the registration of

immovable property were officially implemented Box 3: Lists and Platforms for Streamlining Administration and Delegating Powers

• TI.e liSt ot",p!>iwe1$ lwd list !>f respi>nsibili.ties: All provin<:iaJ-kve) g<?Vern1D.ents made their fists of powers and respdnsibilities open to the public. A plan Wll$

fqrmulated for dep!l!l;!ben:ts under the State Conncil to compile their lists of powers

andll!sponsibilittes on a ttilll baSis.

3

Four Platforms

• The online platform for revi.ew:ing, approving, and monitoring investment projects: The platform will connect 16 departments under the State Council as well as

37 local governments (including cities specially designated in the state plan aud the

Xinjiang Production and Construction Corps), thus integrating the review, approval,

and monitoring work of governments at the central, provincial, prefecture, and county

levels. The platform began to operate on a trial basis last year.

• The national platform for sharing credit information: The platform has connected

3 7 government departments, 30 provinces, autonomous regions and municipalities

directly under the central government, as well as the Xinjiang Production and

Construction Corps, and has gathered over 250 million pieces of credit information,

allowing credit information to be shared and exchanged between regions and between

government departments. The Credit China website (www.creditchina.g.ov.cn) was

launched.

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The national platform for trading public resources: A plan was introduced to

integrate existing platforms into one unified platform.

The 12358 pricing oversight platform: The platform, which is fully operational,

enables online real-time handling of price-related complaints, integrates the work of

pricing oversight bodies at the national, provincial, prefectore, and county levels, aod

ensures online closed-loop resolution of complaints. Over the past year, a total of

662,000 price-related reports, complaints including those made in person and in

writing, and inqniries were received, with 97% of them having been handled and

resolved.

2) Fisca4 tax, and financial reforms were steadi!J pushed jo1Ward. We made further improvements

to the system of transfer payments to local governments, launched reform of the

administration system for tax collection, extended the price-based resource tax to cover more

types of resources, and registered steady progress in replacing business tax with VAT. Policies

promoting the development of inclusive finance, Internet finance, and private banks were

published and implemented, floating limits on interest rates on deposits were abolished, and

most controls over interest rates were lifted The deposit insurance system was officially

implemented. The mechanism for determining the central parity of RMB exchange rate was

improved, and the RMB was included in the International Monetary Fund's special drawing

rights (SDR) basket. Fresh progress was made in the reform of policy-backed financial

institutions and developmental financial institutions. Effective measures were taken to prevent

the occurtence of systemic financial risks.

3) The investment and financing systems continued to undergo innovation. We used the public-private

partnership (PPP) model and other measures such as granting franchise and subsidizing

investment to encourage and guide the involvement of nongovernmental capital in the

construction and operation of infrastructure and public utilities. We adjusted and improved the

capital contribution requirements for fixed-asset investment projects. We properly adjusted and

relaxed corporate bond issuance requirements, and issued new bonds such as project revenue

bonds and bonds for eco-friendly initiatives, as well as six special bonds to finance the

4

construction of urban parking lots and underground utility tunnels, the development of

strategic emerging industries, the improvement of elderly care services, the building of

incubators for entrepreneurship and innovation, and the construction and upgrading of power

distribution grids.

4) Price rifiJrm was intensified. The guidelines for moving ahead with price reform were

published and implemented. Pricing controls over nearly 40 goods and services were either

lifted or delegated to lower-level governments. We revised the government pricing catalog, with

pricing items being reduced by 80% for the central government and by 55% for local

governments. We reduced the price of on-grid electricity from coal-fu:ed power plants and the

price of electricity for industry and commerce, and significantly decreased natural gas citygate

prices for non-residential users. We improved pricing policies to make them more conducive to

energy conservation and environmental protection. We further reviewed and standardized

charges related to imports and exports.

•

Electricity

•

Transportation •

Box 4: Price Reli>rm in

Controls over the price of electricity traded between provinces and regions were

lifted. Trials to reform the pricing of electricity transmission and distribution on

power grids in Shenzhen and western Inner Mongolia during the state regulatory

period of 2015-2017 are being carried out, reducing the burden on electricity

consumers in the two localities by 900 million and 2.6 billion ynan respectively last

year. These trials were also extended to Anhui, Hubei, Ningxia, Guizhou, and

Yunnan. The mechanism for linking the price of electricity to the price of coal

was improved.

_,, ·-· Prices for railway freight transport were adjusted and a mechanism for price

fluctuation was put in place.

Railway companies were given the right to independently set prices for high-speed train tickets in accordance with the law.

5) Steacfy progress was made in the reform of State-owned Enterprises (SOBs) and mqforindustries. Ten

pilot projects were launched as part of the reform of SOEs and the number of central

government enterprises for which the State-owned Assets Supervision and Administration

Commission is the investor was reduced from 112 to 106. We started a new round of structural

5

reform of the electricity industry, began trials to reform the petroleinn and natural gas

exploration and exploitation system, and systematically promoted the reform of state forestry

farms and forestry regions, water conservancy enterprises, rural supply and marketing

cooperatives, and state farms on reclaimed land.

•

Pilot Reforms

Box 5: Reform of SOEs

mea<:u~e§ impleme:nred mc!u:dmg guid<:imes 00

imprc('JinJ': the

Ten pilot reforms were rolled out to ensure the power of fhe boru:d of directors of

SOEs, catty out competitive selection and employment of executives and

managers, promote the system of professional managers, implement differentiated

pay in SOBs, develop companies for state capital investmeot and operations, merge

and reoJ:ganize central government enterprises, introduce mised-ownership

structures in some major sectors, allow employees of SOBs with mised-ownership

structures to hold shates in the company where they are employed, make

information on SOBs public, aud relieve SOEs of their obligation to operate social

p.rograms and help dtem address any other lor~gSitandi!::grssues.

6) Social reforms were deepened. The mechanism for securing funding for urban and rural

compulsory education was improved. Reform of the old age insurance system in Party and

government bodies and public institutions was launched. Comprehensive reform of public

hospitals was fully implemented in all counties with the reform also being carried out on a trial

basis in 100 cities. We worked to ensure that all rural and non-working urban residents who

have subscribed to basic medical insurance are also covered by the major disease insurance

scheme, and actively promoted the system of tiered diagnosis and treatment. The temporary

assistance system was implemented throughout the country. We lowered the premiums for

unemployment insurance, workers' compensation, and maternity insurance, which has helped

enterprises to reduce annual contributions by over 60 billion yuan. Reform of the system for

the use of official vehicles was completed in all organs of the CPC Central Committee and the

State Council, this reform was also launched in central government enterprises and public

institutions, and its implementation was deepened in local Party and government bodies. Trials

to untie industry associations and chambers of commerce from any connections they may have

with the government were carried out nationwide. The national park system was implemented

on a trial basis in Qinghai and other eight provinces and provincial-level municipalities.

6

7) The pace to create a new pattern of opening up was accelerated. Guidelines on building new

systems for an open economy were issued and implemented. The Vision and Action Plan for

Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road (the

Belt and Road) was officially published, and progress was achieved in the development of six

economic corridors and six channels for communications and distribution with key countries

and ports serving as connection hubs*.Direct investments totaling US$ 14.8 billion were made

to the countries involved in the Belt and Road Initiative, an increase of 18.2% over the

previous year. The guidelines on international cooperation on industrial capacity and

equipment manufacturing were released and implemented, and breakthroughs were made in

China's rail transit technology and nuclear power "going global". The Asian Infrastructure

Investment Bank was officially estsblished and the Silk Road Fund was put into operation.

Guidelines relating to certain policies and measures supporting the development and opening

up of major border areas were published. As a result of implementing the revised Catslog for

the Guidance of Industries for Foreign Investment, the number of industries in which foreign

investment is restricted was cut by 50%, the number of industries in which the amount of

foreign investment is limited was reduced by 40%, and over 95% of all foreign investment

projects are now only required to be placed on record with relevant authorities. The model for

managing foreign debt was transformed so that foreign debt needs only to be registered instead

of reviewed and approved. An additional three pilot free trade zones were estsblished in

Guangdong, Tianjin, and Fujian, and the China (Shanghai) Pilot Free Trade Zone was extended

in area. Free trade agreements with the Republic of Korea (RoK) and Austtslia were signed

respectively, as was the Protocol to Amend the Framework Agreement on Comprehensive

Economic Cooperation between ASEAN and the People's Republic of China. Non-financial

foreign direct investment totaled US$ 126.3 billion, a year-on-year increase of 5.6%, of which

the service sector accounted for over 60%. Non-financial outward direct investment amounted

to US$118 billion, an increase of 14.7%.

Nuclear Power

•

Manufacturing

Construction began on the Hualong-1 reactor for the Karachi Nuclear Power

Project Unit-2 in Pakistan; the fust time that China's Hualong-1 nuclear technology

bas been applied ovezseas.

"' The six economic corridors include the New Eurasian Continental Bridge, the China-Mongolia-Russia corridor, the China-Central Asia-West Asia corridor, the China-Indochina Peninsula corridor, the China-Pakistan corridor, and the Bangladesh-China-India-Myanmar corridor. The six channels for communications and distobution refer to highways, railways. airlines, waterways, pipelines, and information networks.

7

• China and Ftance signed the framework agreement to jointly build the Hinkley Point C Nuclear Power Station in Britain.

•

•

The Shanghai Electric Group Company Limited signed a subcontract deal on the

replacement of six steam generators in the Koeberg Nuclear Power Station in South

Africa, marking the first time that China's major-component nuclear equipment was

sold in bulk to tbe international market.

China signed agreements with Argentina tn cooperate on heavy-water reactors and

pressurized water reactors.

* b:ilat:eritl was

betwe~n Ln1n0. ar~cu 17

ffi, The

to

countries includ'irtg Kuzakhstru:J, ErlOiojpia, md Brazil.

a..t1d :Reform Corn:n:tissio:n

and. Coordination. mecharxis:ms

Commerce ru1d 12 other

inte:rmtio:r.ra:! on

3. We continued to pursue innovation-driven development and accelerated the development tif new industries

and new forms tif business. We issued guidelines on deepening structural and institutional reforms

and accelerating the implementation of the innovation-driven development strategy, pushed

forward pilot reforms for all-round innovation, and devoted great energy to promoting

innovation and industrial upgrading.

1) Entrepreneurship and innovation gained momentum. We published and implemented guidelines

on certain policies and measures for promoting entrepreneurship and innovation. The Internet

Plus action plan was launched and new forms of business continued to emerge in sectors such

as big data and E-commerce. Efforts were stepped up to develop support platforms for crowd

innovation, crowdsourcing, crowd support, and crowdfunding, with the number of maker

spaces in China exceeding 2,300, the number of institutions for demonstrating technology

transfer reaching 453, and the total value of the trade in technology reaching almost one trillion

yuan. The state seed fund for investment in emerging industries was set up, the public service

platforms for small and medium-sized enterprises in 26 provinces were interconnected, and the

first National Week for Entrepreneurship and Innovation was held.

Box 7: Innovation-Driven Development

A n.uxnhcr

as high-f!f<Xisic>n and ttanslatio:nal merlicine fac:ilittes,

Bt<eaktchroUJsJ:ls were made in

the Nobel Prize

8

facilities, space sl.Oiulation facilities,

accde:ratecL

innovation psc;jects

the

Pilot Reforms for

All-round Innovation

• Pilot reforms for all-round innovation were carried out in eight regions

including the Beijing-Tianjin-Hebei region, Shanghai, Gnangdong (the Pearl

River Delta), Sichuan (the Chengdu-Deyang-Mianyang region), Anhui (the

Hefei-Wnhu-Bengbu region), Xi' an, Wuhan, and Shenyang.

aclmly pt®ioted t4i;. ~letnenf>i~ ;,£ ···~!deiiri<$ ¥. theintemet Pius action pful, spedtYfug kef ~s iii' t:he ·

following 1! areas• intern!!t"basei) en1Ri>tene~ ani) innol>a~

• i:oi>rdirutted !TI<nufactu.ritlg, agticri).ful;e, ·~ enetgt int:lasive.

•Jinanre, effective . )~lies, ~t;n~ecce, !t~pvenieot '';;[2 •.;.;' \ t\·· · .. {~~anspottati~ eco·ftienp.!y produ;:ti?n ru;'4;~fes~~.aM ~Pc#l ~~><:nee.

The First National • Beijing WllS appointed as the main venue, with seven sub-venues in Shanghai, Week for

Entrepreneurship and Innovation

Shenzhen, Xi'an, Chengdu, Wnhan, Shenyang, and Hefei The events

exhibited new achievements in entrepreneurship and innovation and helped

foster a favorable atmosphere for entrepreneurship and innovation. '"·" .

2) The transformation and upgrading of traditional industries were accelerated. The Made in China

2025 strategy and the three-year action plan for enhancing the core competitiveness of our

manufacturing industries were launched. We advanced major projects in the manufacturing

sector aimed at strengthening core competitiveness, promoting industrial rejuvenation, and

encouraging technology upgrading. The Chinese-standard EMU trains for which we hold the

intellectual property rights rolled off the production line, breakthroughs in the development of

a number of sophisticated modem agricultoral machines were made, the National Robot Test

and Evaluation Center was established, and smooth progress was made in the demonstration

and application of Chinese-brand industrial robots. We set up an investment fund for advanced

manufacturing, raising 20 billion yuan in the first round of funding, a portion of which came

from private investors.

3) Unremitting efforts were made to address the serioHS problem of overcapacity. In order to curb the

expansion of production capacity, we reviewed and reorganized projects that were in violation

of relevant regulations, and strictly forbade the registration and construction of new projects in

industries that were already burdened with severe overcapacity. Last year we reduced excess

production capacity by 13 million metric tons of iron, 17 million metric tons of steel, 38

million metric tons of cement, 300,000 metric tons of electrolytic aluminum, and 11 million

weight cases of plate glass. Efforts were stepped up to help turn the coal .industry around.

4) New progress was made in the development of strategic emetging industries. The national program

for civil space infrastructure was fully implemented; China's homegrown large passenger

aircraft, the C919, rolled off the production line; and the new regional airliner, the ARJ21, was

put into service. The BeiDou Navigation Satellite System was widely used, and sectors such as

cloud computing, · genetic testing, new-energy vehicles, robotics, and mobile Internet

experienced rapid development. A number of industries including integrated circuits, marine

engineering equipment, and medical equipment started moving toward the high end.

9

5) Innovation in and development of the modern service industry were accelerated. We issued guidelines

on accelerating the development of consumer services and promoting the upgrading of the

consumption structure, further lifted restrictions on market access in the service sector, made

solid progress in comprehensive pilot reforms in this area, and advanced smoothly the

development of integrated experimental zones for cross-border E-commerce. The value-added

of the tertiary industry increased by 8.3% over the previous year.

6) Infrastructure networks were further improved. We pressed ahead with the development of

comprehensive transportation systems, with the length of transportation lines open to traffic

reaching 4.94 million kilometers. China's energy supply capacity was enhanced and its energy

consumption structure was improved, with the proportion of non-fossil energy consumption

increasing to 12% of total energy consumption, while coal consumption decreased to account

for 64% of total energy consumption. The National Broadband Internet Agenda was further

implemented and next-generation information infrastructure continued to improve.

Energy

Box 8: Major Infrastructure Construction

The length of highways open to ttaffic reached 4.57 million kilometers, of which over

120,000 kilometers are expressways.

hlgh-grad,elnlaud w11teJwavs Ol'"'"d to mviga!ionteadvcd

The total number of civil airports in servioe reached 20'7.

nlil available in with

lower te2<:lucs

the

The installed capacity of hydropower, wind power, solar power, and biomass power

amounted to 320 million kilowatts, 130 million kilowatts, 43.18 million kilowatts, and 10

million kilowatts respectively. The length of pipelines for ttansporting oil and natw:al gas

totaled 104,000 kilometers.

The numher ·of

of

brc>adbatld access te:ririinalS read1ed

hase ~i:ations tot>Jed 4 668 milliorL

4. We promoted coordinated development between urban and rural areas and between regions and sped up the formation of new areas of growth, growth poles, and growth belts. Positive headway was made in the

implementation of the Three Initiatives (the Silk Road Economic Belt and 21st Century

Maritime Silk Road Initiative; fhe coordinated development of the Beijing-Tianjin-Hebei region;

and the development of the Yangtze River Economic Belt), the development of the four

regions (the western, northeastern, central, and eastern regions), and the promotion of the

New Urbanization, all of which have made a contribution toward creating new space for

development.

1) The blueprint for the Three Initiatives produced tangible results. The Belt and Road Initiative got

off to a good start. Steady progress was made in the coordinated development of the

Beijing-Tianjin-Hebei region, with functions non-essential to Beijing's role as the capital being

relocated away from the city in an orderly manner and initial breakthroughs being made in the

three key areas of transportation, ecological conservation, and industry. Efforts to develop the

Yangtze River Economic Belt were stepped up, with the development of the green, ecological

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corridor beginning to pick up speed and the comprehensive transportation system being

gradually improved.

The Coordinated Development of the

Beijing-Tianjin-Hebei

''o' .. ~;.c'{c-) ;·<e:·•:',. '·

• The plan for the coordinated development of the Beijing-Tllllljin-Hebei

•

•

region and the Thirteenth Five-Year Plan for the region were promulgated, along with related subsidiary plans and action plans.

Demonstration projects to relocate functions non-essential to Beijing's role

as the capital away from the city were launched.

Incomplete expressways were extended, bottleneck sections of highways were upgraded, construction began on industtial cooperation pru:ks and projects, and regional coordination to prevent and control air pollution was strengthened.

Region • Measures were introduced to provide a share of tax revenue to enterprises that were moved as a result of industtial relocation, mobile rates for roaming

and long-distance calls within the region were cancelled, and comprehensive ttials were carried out to further open up the service sector in Beijing

• Efforts to carry out reform, promote innovation, and carry out pilot

demonstration projects were intensified, with newly adopted major reform, innovation, and initial results.

11

• and industrl!ll

Ysngtze JL'ver Economic Belt was

2) The de1JC!opment uf the four regzons became more coordinated. Efforts were increased to

accelerate large-scale development in the western region, while effective measw:es were adopted

to respond to the downward pressw:e on economic development in the northeast. The

development of integrated transportation hubs and eco-economic zones in the central region

was accelerated. And the eastern region continued to play an exemplary role in carrying out

reform and innovation, transforming and upgrading industries, and improving the quality and

performance of the economy. In addition, state-level new areas enjoyed sound development.

The Northeast and

Otb.erOid

Industrial

Bases

to

f(totii inves-tmeo.t

w'"""""• energy~ and othe!'

eX]'terimeJ>tel zones for de,•e!opmcent

in and Manzhouli and

devetloptnent and ope;:ring

snpJoort the of aut•onomo•as

pru:!iollar diflicul!ies such as m Sidtma1a,

• Newly-adopted major policies and measures to support tb.e revitalization of the

northeast were fully implemented and coordinated efforts to carry out 139 major

projects continued, with 758.7 billion yuan being invested in 2015.

•

•

In strengthening efforts to deepen reform and opening up in the northeast, the

China-Germany (Shenyang) High-end Equipment Manufacturing Industrl!ll Park was built, and support was given to Inner Mongolia Autonomous Region to set up a

pilot zone for cooperation between China, Russia, and Mongolia in Hulun Buir.

Support was given to rebuild 85 old industrial areas within cities and 54 independent

industrial and mining areas nationwide, the pace of transforming tb.e economy of

cities once dependent on now-depleted resources was accelerated, and projects got

underway to bring sinkholes in coal-mining areas under control throngh the use of

combined measures.

the central

12

. •. . ·. ..

The Eastern

Region

National

Experimental Zones for

Integrated, Complete

Reform

•

•

•

0

AetiV6, •te~s vicre ~ ~.~Cf?l~tt! re1oCa~.industr1es frl>m othet .n8 and.~ adjust#~rov~ t!ie.~~s~e.of til~ tegio~ A plaO: J:6 ~orate tlle ~opmeniioft;he (,hl revolutionary base. afeas in tht; DapieM?~t>ins \Vlls p\lhlisb.clr ~d impkmertte4. . . Guidelines for regional cooperation and development along the Bohai Sea rim were

formulated and implemented and work was carried out to establish a mechanism for

coordinating such cooperation and development. Support was given to ensure

regional cooperation in the Yangtze River Delta and in the pan-Pearl River Delta.

Coordinatinn of land and marine development was promoted, and efforts to

upgrade the quality and performance of the marine economy were accelerated.

Boxll: of Major Fuoction Platforms

Since 2005 the State Council has approved the establishment of 12 national

experimental zones for integrated, complete reform, including Chongqing and

Chengdu in the western region; the Shenyang Econontic Zone and the Sanjiang and

Songnen plains of Heilongjiang Province in the northeast; the Wuhan metropolitan . area, the Cbangsha-Zhuzhou-Xiangtan city cluster, and Shanxi Province in the I centtal region; Pudong New Area in Shanghai, Binhai New Area in Tianjin,

Sheuzhen, Ytwu in Zhejiang, and Xiamen in Fujian in the eastern rt;gion. These

experimental zones focus on the following six aspects of reform: development and

opening up, coordinated development between urban and rural areas, building an

energy-efficient and environmentally friendly society, promoting a new type of

industrialization, the transformation of resource-dt;pendent economies, and the

de<ldoopmtent of modern agriculture.

3) The New Urbanization was advanced in an active yet prudent wqy. Projects to help rural migrant

workers become permanent urban residents, to cultivate emerging small and medium-sized

cities, and to promote new models of urban development all made smooth progress.

Twenty-seven provinces (including autonomous regions and municipalities directly under the

central government) as well as the Xinjiang Production and Construction Corps published their

13

guidelines for cattymg out reform of the household registration system, and provisional

regulations concerning the residence certificate were published and implemented. Steady

progress was made in advancing new models of urban development and in the cultivation of

emerging small and medium-sized cities. Plans for the development of city clusters were

completed for the Yangtze River Delta, and for the Chengdu-Chongqing and

Harbin-Changchun regions. We further extended the state comprehensive pilot project for the

New Urbanization to two provinces and 135 cities or towns. Positive results were achieved in

implementing the reform to replace multiple plans for city (county) development with one

master plan.

5. We accelerated the transformation of the agricultural growth model and made solid progress in

agricultural modernization. Agricultural and rural development remained steady, and grain output

increased for the twelfth consecutive year.

1) Support policies for agriculture were innovated and improved. Investment in agriculture, rural

areas, and farmers continued to grow, and for the fifth consecutive year the proportion of

funds appropriated for investment in these three areas from the central government budget

exceeded 50% of total funds. The program for the review of state funds for agticultntal

development was successfully completed, and the trials of integrating and optimizing the use

of provincial funds for agricultural development were launched. We worked steadily to improve

the policy for setting minimum state grain purchase prices and the policy for the temporary

state purchase and storage of grain, and solid progress was made in implementing pilot

reforms for guaranteeing base prices for cotton in Xinjiang, and for soybean in the northeast

and Inner Mongolia. We strengthened regulation over the market for major commodities such

as grain, cotton, edible oil, sugar, and chemical fertilizers.

2) Agricultural and rural infrastructuro development was fUrther strengthened. Construction on major

water conservancy projects was accelerated. We stepped up efforts to upgrade water-saving

facilities in medium-sized and large irrigation areas and carried out farmland improvement

projects to support the plan to increase China's grain production capacity by 50 million metric

tons, while also developing the infrastructure needed for a modern seed industry and

expanding the capacity of grain silos. Further progress was made in strengthening rural

infrastructure such as roads, housing, and water, power, and methane supply capacity. In order

to increase cooperation and connectivity, urban and rural areas moved faster to jointly build

and share infrastructure as well as public service facilities. Pilot projects were launched to

control pollution from non-point agricultural sources, utilize and protect chemozem soil in the

northeast, and improve the management of grassland reclamation areas; and progress was

made in the trials for treating heavy-metal pollution on farmland and the over-abstraction of

groundwater. Box :12: A{,>ricul.tural and Rural In&astmcrure Development

the number of

CO£lset:va!>CV prtoj<OI::t~ ~ lreMlv uncleJ0¥2Y to 85 out of a total of

investment in on1:om'l': p:tOJ!rCts amoulltiD:g to over 800 billion Safe dr11!kirJg

was made available to :rural residCJ:rlli, meanrr<g

Twelfth Five-Year 'Pfuu in this been

14

Positive progress was made in upgrading rural power grids and extending power grids to Power Supply areas without power supply, and all households previously without access to electricity are

Methane

Supply

now connected to the power grid.

outto (W.$1J.l'e that• !!ln!ost eoery .adminlstrative village is.served by·~~. netwm:k, every ~~ hlos ~t least ~11\: po~t9ffice, ~:eY.ery.~' J#.

se:Mces.· • • . .< -,.

The extensive development of large-scale methane projects was advanced, and support

was giveo to the construction of 386 large-scale methane projects and 25 large-scale

biogas projects.

'. ~]len~tiOOs.:-vei:e. ottried'o~"!i '] s,{)()(}.dikp~ted·.or .<!jd,hoU$<$ j(jea~:.W. ~-d~ll (jrr,., .~" . . fil.rms l!"d ln . .. . ... . .· ·· 205,000. ~0~blds ~~r.:Cfumztiprt, : l 'ru:eas md · on nlillion area£. Cl:iordlm!ted • .,.i:~d; to r<n~l!te x~ house$ so as to ttii!lre t.henii lnol:~ eru:th~~c;;;es.is;,u.;i:.

- - -· ' . - - - . ..:...~ ....... ~~--------'----~~---·-·-· -~ - . - -- . - . -

3) New strides were made in agricultural structural adju.rtment. Grain output reached 621 million

metric tons, and harvests and production levels remained high for major agricultural products

such as meat, egg, milk, fruits, vegetables, tea, and aquatic products. As much as 54% of

livestock and poultry fanning is now carried out on a large scale; trials to replace grain crop

cultivation with feed crop cultivation and to rotate crops between grain and soybean were

launched across the board. The overall level of mechanization in plowing, sowing, and

harvesting reached 63%, and advances in agricultural science and technology contributed to

56% of agricultural production.

4) S teatfy progress was achieved in rural riform. Pilot reforms relating to rural land requisition,

the lilllrketization of rural collective land designated for business-related construction, and the

system of land used for rural housing were carried out in 33 county-level administrative areas;

and trials to allow contracted rural land-use rights and farmers' home property rights to be

used as collatetal to borrow money were implemented in 278 county-level administrative areas.

The pilot reform relating to granting shareholder rights for rural collective assets proceeded in

an orderly manner. The number of family fanns, farmers' cooperatives, leading agricultural

enterprises, and other new types of agribusiness amounted to nearly 2.5 million.

6. We intensified ifforts to promote erological progress, and surpassed this year} targets for energy

ronservation and environmental protectWn. Energy consumption pet unit of GDP dropped by at least

5.6%, carbon dioxide emissions by at least 6%, sulfur dioxide emissions by 5.8%, chemical

oxygen demand by 3.1 %, ammonia nitrogen by 3.6%, nitrogen oxide emissions by 1 0.9%, and

water consumption per 10,000 yuan of value-added of industry by 3.9%.

1) Efforts to promote ecological conservation rontinued to intensify. We promulgated and

implemented both the guidelines on accelerating ecological advancement and the integrated

reform plan for promoting ecological progress, and continued to ensure the smooth

development of pilot demonstration zones for promoting ecological progress. Environmental

policies relating to functional zones, the national plan for marine functional zones, and the

revised national plan for ecosystem service- zones were published and implemented. We

expanded the scope of a new round of projects to return marginal farmland to forest or

grassland and afforested 6.32 million hectares of land, and the national vegetation fractional

coverage of grasslands reached 54%. Efforts were intensified to prevent the expansion of

15

stony deserts and protect wetlands, and integrated measures were taken to bring soil erosion

under control on an additional 5.4 million hectares of land

2) Further progress was made in energy conservation and emissions reduction. A ceiling on total coal

consumption was imposed in each major air-polluting city, and the action plan to promote

energy conservation and reduce emissions through the upgrading of coal-fired power plants

was fully implemented. The pilot demonstration projects to commission a third party to treat

pollution, encourage the trading in of old equipment and parts for remanufactured ones, and

implement a system for extended producer responsibility were all carried out in an orderly

manner. We promoted both the construction of green buildings and the comprehensive

utilization of crop straw.

3) An all-out iffort was made to address pollution. The average intensity of fine particulate matter

(PM2 ,) dropped by 14.1% in the 74 cities where the new ambient air quality standards were first

applied last year. More efforts were made to prevent and control water pollution in major water

basins and to protect the ecosystems of lakes; as a result, the proportion of surface water with

a water quality rating of Grade HI or higher has risen to 66%. The pilot demonstration project

to treat and restore contaminated soil was launched, and progress was made in trials for the

environmental monitoring of contaminated sites.

4) Fresh achievements were made in responding to climate change. The first round of pilot projects

for low-carbon cities (towns) were launched, and trials for trading carbon emissions rights were

carried out in Beijing, Tianjin, Shanghai, Chongqing, Guangdong, Hubei, and Shenzhen. Our

participation and constructive role at the United Nations Climate Change conference in Paris

allowed us to put forward China's approach to climate gqvernance and make a contribution

toward the adoption of the Paris Climate Agreement.

7. We put greater emphasis on ensuring and improving living standards and made consistent progress in

improving people's qualifY '!f life. Multiple methods were used to increase investment, strengthen

points of weakness, and help those most in need, thereby helping to weave a strong social

safety net.

1) The implementation '!f targeted measures to reduce pover!J gathered pace. We launched a number

of projects to alleviate poverty, such as relocating people from inhospitable areas, supporting

the development of local industries, promoting education and helping to increase health

standards in poor areas, and providing support for people seeking employment. The number

of people living in poverty in rural areas was reduced by 14.42 million. Greater efforts were

made to support the development of the old revolutionary base areas and the revitalization of

the former Central Soviet areas including southern Jiangxi. We strengthened support from the

central government and pairing assistance programs for underdeveloped localities, and took

further steps to promote both the economic and social development and the long-term peace

and stability of Xinjiang, Tibet, and Tibetan ethnic areas in Sichuan, Yunnan, Gansu and

Qinghai.

2) Personal income increased steadi!J. Per capita disposable personal income increased by 7.4%

in real terms. Rural per capita net income exceeded 10,000 yuan and registered a 7.5% increase

in real terms, making it the sixth consecutive year in which the increase in rural per capita net

income has surpassed the growth rate of both GDP and urban per capita disposable income.

The ratio of urban income to rural income per capita dropped to 2.73:1.

16

3) Steady progress was made in the area of social security. The number of people covered by basic

old-age insurance has reached 858 million. The rate of participation for basic medical insurance

stood at over 95% and pension benefits for enterprise retirees continued to rise. The minimum

basic pension benefit for rural and non-wo:rking urban residents rose from 55 yuan to 70 yuan

per month. The annual government subsidy for basic medical insurance covering rural and

non-working urban residents was increased from 320 yuan to 380 yuan per person. Work to

establish a standardized system to provide basic necessities for people experiencing extreme

difficulties began. The system for granting living allowances to people with disabilities who are

facing financial difficulties and a caring subsidy to people with serious disabilities was put in

place in 20 provinces and provincial-level municipalities, with over eight million people

benefiting from the system.

4) Better public services were provided. We continued to improve the basic conditions of badly

built and poorly operated schools providing compulsory education in poor areas, launched the

plan to strengthen the workforce of teachers in rural areas, and opened up more channels

through which students from poor rural areas enter key colleges and universities. The retention

rate of nine-year compulsory education reached 93%, while the gross enrollment ratio for

senior secondary education reached 87%. We improved the system for community-level

medical care services, the prevention and control system for major diseases, and the work to

train general practitioners. The per capita government expenditures on basic public health

services increased to 40 yuan, with the number of categories of basic public health services

increasing to 12. We issued and implemented the national standards to gnide the provision of

basic public cultoml services, and increased support to improve prefecture-level facilities for

public cultoml services. Significant progress was made in catalyzing innovative development in

the sports industry.

Box :13: Provision of Pnblic Services

on ... .,nu:lll and supportiwoz ~ to#~'~ ·t-:ic~ C!)lltdl,!1oos · JS;f . · . . 'sch~ ,!!H2; ,;-oztk.m~

!mpv~!:!lt!i t<''!Jie <s~l edtM:!!.lii:>nllJistat'!!,·· • . imJ:>rm<ing 39,946 co,;,~ty-kvel deal and. health ~

service agencies, 82 prefecture-level hospitals, 89 medical service agencies for children, l'oblic Health 548 institutions for preventing and coo trolling major ruseases, and 102 clinical training

bases for general practitioners, while also focusing on 199 programs to mooitor food safety risks.

~t~~:;,R=:ltr.~1!1 Tourism

Support was given to develop the lofrastructure of 698 major tourist sites, helping to

improve tourist facilities and increase the capacity to provide services and hospitality.

·· .. · ~~P~ftek(~~0~enl:les.~9fi>~,fiofess~, suffering jX<1'ii!iJ;PJ1.9:",~ }oss'qf,)b,jisi<# ox:~.ap~hili~ .

17

Servic''" for J>e<mle with

or

bed-s per thous:ru1d

Support was given to 335 programs to build provincial- and prefecture-level rehabilitation facilities and county-level care facilities for people with disabilities.

Su!>port was to 615 cmmtv-le'vel

smface a.rea of venues now

stadiu.._m. co:nstru.ction prc,jectl;.

oves: 1 "S square n.tetets

5) The construc!Wn o/ government-subsidized housing progressed smoothfy. We supported

government-subsidized housing projects, such as the rebuilding of run-down areas, by

increasing central government's budgetary investments and special funding in this area,

allocating special development funds, and secuting financing through corporate debt issuance.

Over the last year, construction began on 7.83 million government-subsidized housing units in

urban areas and construction on 7. 72 million units was basically completed.

In assessing performance in relation to meeting the targets projected in the plan, overall

targets for national economic and social development, such as the economic growth rate, the

consumer price index, the balance of payments, and employment levels, remained within the

proper range; those targets reflecting economic structure and quality were further improved;

targets regarding social development and people's wellbeing maintained positive momentum;

and targets related to resource conservation and environmental protection were implemented

satisfactorily. Overall, planned targets were well met.

All18 obligatory targets have been achieved as planned. Of the 41 anticipatory targets, the

performance of 35 was in line with or better than expectations, 5 fell short of the projected

figures, and there is one target for which a figure is still not available due to an adjustment of

the statistical standards. It should be noted that the anticipatory targets are neither mandatory

nor predicted; they are development objectives that the government hopes to achieve and a

reflection of the anticipated direction of national development and policy orientation. The

actual performance of these targets is objectively decided by the market, and may be higher or

lower than the projected figures. The reasons for the discrepancies between the projected

figures for some anticipatory targets and the actual performance are as follows: First, in order

to reflect the orientation of macro-control policies toward boosting domestic demand, the

targets of total retail sales of consumer goods and fixed-asset investment were set slightly

higher than the estimated figures. These were targets for us to work toward over the course of

the whole year, and as a result, there was a minor difference between the actual performance

and the projected figures. The actual increase in the total retail sales of consumer goods

basically met the projected target in real terms, but was lower than the target set at the

beginning of the year in nominal terms because of imported deflation, the decline in the prices

of some domestically manufactured goods, and the limited increase in the prices of agricultural

products. In the face of a sluggish international market and insufficient domestic demand, total

fixed-asset investment also fell short of the projected figure set at the beginning of 2015. This

was due to serious overcapacity in some manufacturing industries; excess supply in the real

estate markets of third- and fourth-tier cities; and a sustained fall in the prices of goods for

18

investment as well as other factors. Second, unique factors resulted in the target for spending

on R&D being lower than the projected figure. This was due to the increasing downward

pressw:e on economic growth and the continued decline in the profits of enterprises in 2015.

In addition, the figure for spending on R&D as a percentage of GDP in 2014 was adjusted

statistically from 2.09% at the beginning of the year to 2.05% at the end of the year. These

factors meant that the 2015 target for R&D spending as a percentage of GDP was not

achieved. Third, changes in the international economic environment caused the yearly figures

for some targets to be lower than the projected figures. Under the influence of a slowdown in

the growth of world trade and a slump in energy prices on the international market, the growth

of total import and export volume was slower than projected. A sharp drop in the prices of

major commodities on the global market and the slackening demand for natw:al gas on the

domestic market also meant that natw:al gas output for last year fell short of the projected

target. Finally, the Ministry of Public Security is adjusting the statistical standards for

calculating the population using household registration, and therefore the figures for the

percentage of the population registered as urban residents in 2014 and 2015 are presently void;

valid figures will be published after adjustment.

In brief; facing complex situations both at home and abroad, the achievements that China

has made thus far in economic and social development have not come easily. They are the

result of the correct leadership of the Party Central Committee and the State Council, and the

concerted efforts of all regions and departments and the people of all our ethnic groups.

Through five years of hard work, the major targets set out in the Twelfth Five-Year Plan for

National Economic and Social Development have been successfully completed.

At the same time, we should also be keenly aware that the world economy is still

undergoing profound adjustment, the divergence of economies is pronounced, growth of the

global economy and ttade are sluggish, geopolitical risks are on the rise, the foundation for

economic recovery is still weak, and external instabilities and uncertainties are increasing. In

this current period of development, China must simultaneously manage the slowdown in

economic growth, make difficult structw:al adjustments, and absorb the effects of previous

economic stimulus policies. As the adverse effects of a sustained slowdown in economic

growth continue to persist and deep-seated and longatanding problems, especially structural

problems, become more serious, the conditions for China's development may become even

more complex and the difficulties even more formidable.

First, the downward pressure on China's economy is still mounting. The slowdown in the growth of

demand is continuing. With international demand remaining weak, the situation in relation to

foreign trade has become more challenging and complex. Affected by the persistently low

prices of manufactured goods and the rising costs of labor and other factors of production,

growth in investment is slow, particularly in the area of manufactw:ing. As downward pressure

on China's economy begins to affect employment and personal income, it may also spread to

and affect private consumption.

Second, the difficulties faced l!J the real economy are building. Having been pressed by insufficient

demand as well as a rise in overall costs, the ability of enterprises in some industries to make a

profit has decreased, and with losses in some industries increasing the number of enterprises

facing difficulty is also rising. This has resulted in layoffs and hidden unemployment within

19

some enterprises and industries.

Third, structural problems are becoming more prominent. Weak effective demand has been

coincident with insufficient effective supply, and the transition from the old to the new drivers

of growth has been unbalanced. The delayed adjustment of the supply system has resulted in

supply-side structural problems becoming more pronounced, and effective supply has not yet

adapted to aggregate demand or to changes in the structure of demand, while structural

overcapacity is still a significant problem.

Fourth, ecological and environmental problems are still grafJIJ. Air pollution remains serious, with the

frequent occurrence of heavy smog in some cities and areas. The quality of the water

environment is relatively poor and the over-abstraction of groundwater is severe in some

regions; while other regions face an arduous task in bringing soil pollution under control. The

construction of environmental infrastructure lags behind.

Fijth, challenges and risks in other areas are accumulating and intertwining. The growth of

government revenue is slowing down; the imbalance between revenue and expenditures is

becoming more pronounced; and there are risks and hidden dangers in local government debt.

The amount and ratio of non-performing loans reported by banks have increased; the debt

ratios of enterprises are also rising; illegal fund-raising is becoming more frequent; and hidden

financial risks are mounting. At the same time, there are also new problems to be addressed in

relation to workplace safety and the people's well-being.

We must attach great importance to these issues, carry out a full evaluation of the

difficulties and challenges that have arisen as a result of downward pressure on the economy,

and become more aware of potential dangers and the bottom line. We need to maintain out

strategic focus while taking timely steps to undertake early warning initiatives, formulate

contingency plans, and exercise anticipatory regulation; such measures will ensure that we can

respond effectively to these problems and resolve them.

H. Guiding the New Normal. and

Applying the New Development Phll.osopby in 2016

This is the first year of the decisive stage in finishing building a moderately prosperous

society in all respects and it is also an important year for surmounting the difficulties we face in

the push toward structural reform. Effectively carrying out our economic work for this year is

hugely important to ensuring that we can finish building a moderately prosperous society in all

respects within the 13th Five-Year Plan Period (2016-2020).

1. General Requirements

We need to fully implement the guiding principles of the 18th National Party Congress and

the third, fourth, and fifth plenary sessions of the 18th CPC Central Committee; follow the

guidance of Deng Xiaoping Theory, the Theory of T!u:ee Represents, and the Scientific

Oudook on Development; and fully put into practice the guidelines from General Secretary Xi

Jinping's major political addresses. We need to strengthen and improve the Party's leadership

over economic work; coordinate China's domestic and international efforts; act in accordance

with the overall plan for promoting all-round socislist economic, political, cultural, social, and

20

ecological development and the Four-Pronged Comprehensive Strategy*; and keep firmly in

mind and put into practice the philosophy of innovative, coordinated, green, open, and shared

development. We need to adapt ourselves to the new normal in China's economic development;

adhere to the reform and opening up policy as well as the general principle of seeking progress

while keeping performance stable; and continue to ensure steady economic growth, make

structural adjustments, improve the standard of living, and guard against risks. We need to

follow the general guidelines of keeping macro policies stable, industrial policies targeted, micro

policies flexible, and reform policies practical, while also making sure social policies meet

people's basic needs. The economy needs to continue operating within an appropriate range.

We must be strategically prepared for a prolonged struggle, and tactically well prepared so that

the challenges we may face can be overcome. We will intensify structural reform--as we

increase aggregate demand by an appropriate degree, we will also work to cut overcapacity and

excess inventory, deleverage, reduce costs, and strengthen points of weakness in order to

improve the quality and efficiency of the supply system. Moreover, we will increase the

effectiveness of investment, accelerate the fostering of new driving forces for development,

upgrade and improve traditional comparative advantages, and strengthen the drivers for

sustainable growth so that China's overall productivity improves and its economic and social

development gets off to a good start for the 13th Five-Year Plan period.

2. Major Targets

Acting in line with the general requirements listed above and taking into account both

what is necessary and what is possible, we have set forth the main targets for China's economic

and social development in 2016 as follows:

- Ensuring .rteatfy and sound economic development

GDP is projected to grow by 6.5-7%. In setting this target, we have made the following

considerations: Fir.rt, such a rate is necessary for lqying a good foundation for achieving the goal uf finishing

building a moderatefy prosperous society in a!J respects during the 13th Five-Year Plan period. To attain this

goal by 2020, the economy needs to grow at an annual average rate of above 6.5% during the

13th Five-Year Plan period. Should the economy grow slower than 6.5% this year, growth rates

for the next four years would have to be higher. This year's target of GDP growth between

6.5% and 7% will help us to gain the initiative and avoid increasing pressure for higher growth

rates over the next few years. Second, this rate wi!J help to effoctivefy stimulate employment. In view of

the correlation between economic growth and employment, a growth rate of between 6.5% and

7% should be able to create more than 10 million urban jobs. Third, such a rate is conducive to

guiding market expectations and boosting co'!fidence. As an elastic range of acceptable economic

growth rates, this target is in line with China's potential growth rate and market expectations,

which will allow it to play a positive role in helping to bolster confidence. At the same time, we

are also aware that China will face a more complicated development environment this year and

the slowdown in our economic growth has not yet been reversed. This means that stronger

policies and greater efforts will be required if we are to achieve the targeted growth rate.

- Making.forther progress in achieving a better-quality, mfil'e ifftcient, upgraded economy

• The Four-Pronged Comprehensive Strategy refers to making comprehensive moves to: a) finish building a moderately prosperous society in all respects; b) deepen reform; c) advance the law-based governance of China; d) strengthen Party self-conduct.

21

Both investment and consumption are projected to continue growing steadily, and the

contribution of consumption toward economic growth is also projected to continue rising. The

foundation of agriculture will be further strengthened, positive results will be achieved in

industrial transformation and upgrading, the growth of strategic emerging industries will

accelerate, and the contribution of the value-added of the service sector to GDP will continue

to increase. Scientific and technological progress is expected to play a greater role in supporting

economic growth and R&D spending as a percentage of GDP will be increased steadily.

Energy consumption and carbon dioxide emissions per unit of GDP will be reduced by at least

3.4% and 3.9% respectively, water consumption per 10,000 yuan ofGDP will fall by 5.1%; and

chemical oxygen demand is projected to fall by 2%, ammonia nitrogen by 2%, sulfur dioxide

. emissions by 3%, and nitrogen oxide emissions by 3%. For those cities at prefectural level or

above that fell short of the national standards for PM25 last year, their PM25 intensity will be cut

by 3% this year; and air quality in cities at prefectural level or above is expected to be good or

excellent for 77% of the year. The proportion of water bodies with a water quality rating of

Grade III or higher will reach 66.5%, while the proportion of those lower than Grade V will be

kept within 9.2%.

- Keeping the overall price level basicalfy stable

In setting a targeted increase of around 3% for CPI, we have taken the following into

account: First, the continued impact from last year's CPI increase will be slightfy greater than that r!f the year

bifore. According to our forecast, the contribution of the previous year's CPI increase on the

growth of CPI this year will be slightly higher than last year's 0.5%. Second, new factors will

contribute to an increase in prices. Although weak demand will make a significant price rebound

almost impossible, there will srill be additional factors dtiviug price increases: a rise in prices of

services as a result of an increase in labor costs, the possibility of cyclical price fluctuations of a

number of agricultural products, and the impact of further price reforms. Third, this tar;get will

help to guide market expectations. A target of higher price increases will be conducive to reducing

expectations of deflation.

- Continuing to improve living standards

More than 10 million new urban jobs are expected to be created this year, and the

registered urban unemployment rate will be kept within 4.5%. This will help to ensure that

employment remains stable and will also provide leeway to address overcapacity, catty out

enterprise mergers and reorganizations, and respond to the issue of hidden unemployment.

Personal income will increase in step with economic growth and the income gap between

urban and rural residents will continue to narrow. The number of rural residents liviug in

poverty will be reduced by over 1 0 million and the percentage of the population registered as

urban residents will increase by more than 1.3 percentage points. In order to ensure continuous

improvement of the social security system, the overall management of social insurance

accounts will be turned over to higher-level authorities, coverage will continue to be expanded,

and the level of benefits will be increased appropriately. The coverage and equitable delivery of

education, health care, culture, and other basic public services will continue to expand.

- Keeping the equilibrium in the balance of pqyments

The growth rate in the export of goods from China is projected to be faster than that of

world trade, the volume of imports is expected to expand, and the proportion of trade in

22

services in relation to the total volwne of foreign trade will continue to increase. Foreign

investment utilized by China will keep rising, and outbound direct investment is expected to

grow rapidly.

3. Orientation of Macroeconomic Policies

Clear requirements were put forth at the Central Economic Work Conference held in

Beijing last December for adapting to and guiding the new normal in economic development.

In particular, the conference examined how the new normal should be viewed and handled,

and in light of this, three approaches we must follow and ten areas of effort we need to

highlight were emphasized. The new philosophy of innovative, coordinated, green, open, and

shared development, put forward in the CPC Central Committee's Recommendations for the

13th Five-Year Plan for Economic and Social Development, will serve as a guide for economic

and social development during the 13th Five-Year Plan period and beyond. To achieve the

targets for economic and social development in 2016, we must keep fumly in mind the

requirements for guiding the new normal in the economy and put into practice the new

development philosophy. We need to channel greater energy into supply-side structutal reform

while increasing aggregate demand by an appropriate degree. We need to implement the

general philosophy of keeping macro policies stable, industrial policies targeted, micro policies

flexible, and reform policies practical, while also making sure social policies meet people's basic

needs; at the same time, we need to make sure all policies are well coordinated and work

together to create synergy.

- KBeping macro policies stable

We will ensure continuity m and make improvements to macroeconormc policies,

strengthen range-based, targeted, and well-timed regulation, increase support for the real

economy, and make sure the economy operates within an appropriate range. On the one hand, we will increase the intensity rf our proactive focal poliry. The government deficit

for 2016 is projected to be 2.18 trillion yuan nationwide, which represents a year-on-year

increase of 560 billion yuan and a deficit-to-GDP ratio of 3%. Of this amount, the central

government deficit will be 1.4 trillion yuan, and the remaining 780 billion yuan will come from

the local government deficit. First, a scaled-up deficit in the short term will allow us to increase

government spending and central budgetary investment by an appropriate amount, and more

importantly to make up for the decrease in government revenue caused by tax and fee

reductions, thus ensuring the government can fully meet all of its spending responsibilities.

Second, we will optimize the structure of budgetary expenditures, make innovations in the way

budgetary funds are used, put surplus budgetary funds to better use, and increase or reduce

budgetary expenditures as necessary. Third, an appropriate increase will be allowed in the

issuance of special bonds by local governments mainly to support land reserve, transportation,

water conservancy, urban infrastructure, and other projects that will yield a certain degree of

revenue. Local governments will continue to issue bonds to replace outstanding debts.

On the other hand, we will appropriatefy increase the flexibility rf our pmdent monetary poliry. We will

maintain reasonably ample liquidity and allow an appropriate increase in the aggregate financing of the economy. TheM, money supply is projected to grow by around 13% in 2016, roughly

the same as last year. First, we will lower financing costs for the real economy, ensure the

23

financial sector serves the real economy more efficiently, and help solve the problem of

financing being difficult and costly to obtain. Second, with the aim of expanding the issuance

of bonds and equities as well as other financing channels, we will develop project revenue

bonds, high-yield bonds, convertibles, extendable bonds, perpetual notes, and other hybrid

securities. We will also raise the proportion of direct financing. Third, we will improve the

market-based RMB exchange rate regime and continue to implement a managed floating

exchange rate system, thereby allowing the RMB exchange rate to float more freely while also

ensuring basic stability is maintained and the rate remains at an appropriate and balanced level

We will exert effective control over abnormal cross-border flow of capital.

While effectively implementing fiscal and monetary policies, we will coordinate the use of

and increase compatibility between policies on industrial development, regional development,

investment, consumption, and prices and strengthen counter-cyclical adjustments so as to

create a stable macro environment for econoruic development and structural reform.

- Keeping industrial policies tafJ!,eted

The direction of structural reform needs to be accurately determined; we need to stimulate

increases in demand by making innovations on the supply side, and encourage the emergence

of new areas of growth. First, we will continue to pursue innovation-driven development. In

order to increase incentives for innovation and promote its practical application, we will

implement action plans to encourage the commoditization and application of scientific and

technological advances and catty out the intellecmal property rights strategy, reform the system

of property rights on scientific and technological advances, carry out preferential tax policies on

equity and option rights, and improve the methods for distributing dividends and giving rewards. We will give full play to the role of entrepreneurship and innovation initiatives and the

Internet Plus in pooling the wisdom and strength of the general public. Second, we will focus

on invigorating existing resources. We will accelerate technological transformation and

upgrading, revitalize existing industries and enterprises, take our industries to a new level,

redouble efforts to develop the real economy, and encourage small and medium-sized

enterprises to develop on the basis of innovation and transformation. Third, we will move

faster to promote green development. We will encourage exploration and experimentation in

promoting ecological progress and improve related institutions, and work hard to put in place

an industrial system and spatial planuing that are eco-friendly to spur on the development of

green production and promote a green lifestyle.

- Keeping micro policies flexible

We will improve the market environment, invigorate businesses, and uulock the potential

of consumers. First, with a focus on addressing the issue of the unsynchronized,

uncoordinated, and incomplete delegation of powers to lower level governments, we will

deepen reform of the government review and approval system, further relax restrictions on

market access, and impose stronger and more effective oversight, thereby ensuring more

efficient and conveuient services for entrepreneurship and innovation, business investment and

operations, and the general public. Second, in order to protect the property rights and

legitimate interests of enterprises under all types of ownership, we will implement a review

system to ensure fait competition, remove market barriers and local protectiouism, and lift

24

restrictions to ensure the free flow of commodities and factors of production, thus creating a

relaxed investment and operating environment in which enterprises under all types of

ownership can develop themselves through innovation. We will ensure that nongovernmental

investments and investments by governments and SOEs are treated equally in terms of project

review, financing services, fiscal and tax policies, and the use of laud. Third, we will enhance

ow: ability to provide effective supply and ensure it better corresponds to demand by creating

new supply and improving the quality and efficiency of supply, which will ensure that the

diversified and personalized demand of different consumer groups is fully satisfied

- Keeping reform policies practicable

We will continue to raise the quality of ow: reform plans, improve reform implementation

mechanisms, and make good use of pilot reforms, so that the results of reform are tangible and

ow: people gain au increasingly greater sense of benefit. First, we will adhere to a

problem-oriented approach. With a focus on resolving the main problems, we will channel ow:

energy into carrying out important reforms that have a bearing on the overall situation, and we

will rely on reforms to resolve the serious issues and problems that are hindering development.

We will accelerate reform related to government review and approval; investment and financing; prices; SOEs; fiscal, tax, and financial systems; and social management. Second, we will

strengthen coordination. In making reform more systemic, comprehensive, and balanced, we

will ensure that major and critical reforms are guided by effective top-level planning, while also

coordinating work on related reforms so as to create synergy. Third, we will spare no effort to

ensure that reforms are fully implemented We will work bard to address the issues of how to

make sure that reform plans are tailored to reality, how to remove obstructions created during

the adjustment of interests, and how to ensure the assumption of responsibilities for

implementing reforms. We will give full rein to the initiative of community-level organizations

and encourage local governments to explore which methods for implementing reform are best

suited to local conditions, thereby ensuring that reform implementation is accurate, thorough,

and effective.

- Making sure social policies meet peuple's basic needs

We will work bard to ensure the wellbeing of our people, giving full play to the role of the

social safety net as a stabilizer. On the one hand, we will increase the supply of public services.

Public services should be inclusive, equitable, and sustainable, and should guarantee the basic

needs of the people. We will ensure everyone bas access to basic necessities and basic public

services. On the other hand, we will improve systems to ensure there is a cushion in place for

those most in need We will provide support to economically disadvantaged families based on

their type of situation, increasing government funds for unemployment assistance and

subsistence allowances, while ensuring that those poor families who are not supported by

industry-led poverty-alleviation or employment assistance programs are covered by social

security programs.and have their basic needs met.

HI. Major Tasks for Economic and Social. Development in 2016

In 2016, with the fOcus on adapting to and guiding the new normal in econom1c

25

development and applying the new development philosophy, we will carry out wo:rk in the

following nine areas to ensw:e a good start to the 13th Five-Year Plan:

1. Making progress in mqjor tasks for suppfy-side struaural riform

We will adjust existing resow:ces so as to upgrade traditional drivers for development,

while also incorporating additional effective resow:ces so as to foster new drivers; at the same

time, we will make the supply structw:e more adaptable and flexible with a view to increasing

the impetus for sustainable growth.

1) We will activefy and steadify address overcapaci!J!. We will put greater emphasis on making use

of market forces, economic measw:es and rule oflaw 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

restructw:ing, or bankruptcy through reorganization or liquidation; and actively yet prudently

deal with enterprises that have loug been indebted, insolvent, and uncompetitive. We will

increase support through fiscal, tax, financial, and land policies to help tum around and

upgrade the steel, coal, and other industries. When addressing the issue of overcapacity, priority

will be given to ensw:ing proper arrangements are made for workers who are laid of£; and funds

for rewards and subsidies will be set up to ensw:e 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 insw:ance premiums. We will

streamline the government review and approval process as well as related procedw:es 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 resow:ce tax; and research the feasibility of streamlining

and consolidating old-age insw:ance, medical insurance, unemployment insw:ance, wo:rkers'

compensation, maternity insw:ance, 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 structw:al reform of the electricity, heat, petroleum, and

natw:al gas industries, and advance reform of the commodity distribution system.

3) We will reduce commodi!J! housing stock in a well-ordered wqy. In carrying out reform of the

housing system, we will focus on meeting the demand of new w:ban residents by appropriately

lowering transaction costs, encow:aging rural migrant workers to pw:chase 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 encow:age both individuals and investors

26

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 rw:al migrant

workers, who have adequate financial resources, to participate in the housing provident fund

scheme on a voluntary basis.

4) We wiU 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, smarteJ; 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 ow: 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

rw:al areas; develop next-generation information infrastructure, new-energy vehicle facilities,

urban underground pipeline networks, gas storage facilities, intercity transportation

infrastructure, and urban and rw:allogistics 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 rw:al 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 ow: capacity to conserve

ecosystems and improve the environment, and build ecological security shields.

5) We wiU guard against and defosc .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 econoruic 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 comprehensively oversee and regulate systeruically important

financial institutions, financial holding companies, and key financial infrastructures. We will set

up sound anticipatory mechauisms 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 mechauism 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 systeruic or regional financial risks occur. To ease the imbalance between

27

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 ente.tprises' 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 gnide 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 industty. 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 abili!JI 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; and expand and guide cultutal consumption. At the same rime 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 supp!J and unleash potential consumer demand. We will encourage and

support local governments and enterprises in intensifying their efforts to extend bwadband

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

28

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 agrunst 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.forther 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 entrepreneutship and innovation incubators, and for

launching eco-friendly initiatives.

Third, we will develop an investment plan on a rolling threejJCar 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

29

management of investment projects that are subject to government review and reporting will all be accelerated.

Fifth, we will strengthen mqjor construction prqjects 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.

200 Transportation

Projects to Help Reduce Poverty

•

•

Box 14: The 100-200-300 Transportation Program

on on initiate>:!, and a host of

lau>nche<l, vJith the focus on

s.n:ea:rt

prtJjects that

Guidelines on further ensuring transportation plays a fundamental role in

underpinning poverty-alleviation efforts will be introduced. By 2020,

approximately one million kilometers of rutal roads will have been built and

over 200 major projects for building backbone transportation corridors as a

poverty-reduction measure will have been completed.

In 2016, 200,000 kilometers of rural roads will be built or upgraded and

construction on 30 backbone corridor projects will begin so as to remove

bottlenecks that are hindering rural development.

ttans!>ortaticOn infrastnKtr.Jxe

ptcljects to be carried out

prctjects will focus on bnlldtrtg l1;tg!Irsr~qual1ty

netwOrks and

tmnsjsOrtatlon ne!Vmdrs.

basic

pncml1,es w'ill be to pns.lin:!la:rry work on

34 related w 40 rehted

and 51 :related

and

f2rdlities.

3. Channeling more effort into riforms in mqjor 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.

30

1) We will intensify 1forts 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, 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 -!}stems. 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 o/ 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 31

promulgate guidelines on further improving the property rights system.

5) We will accelerate reform uf 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. 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 we will improve the

system for financial oversight and regulation.

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 supp!y rf 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 uf 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

32

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 teleco=uuications. 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 emer;ging 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.

5) We will accelerate the high-quality, dftcient 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

33

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 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 teniary 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 modem 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.

3) We will promote the sustainable tkvelopment 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 com.

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 chemozern 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

34

of cultivated land and the over-extraction of groundwater. We will establish pilot

demonstration zones for sustainable agricultural development.

4) We will make forther 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 integated 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-dtiven

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 rif the western, northeastern, central, and casflirn

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

35

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 encomage 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 dusters with suitable

conditions in exploring the further integration of urban development.

Box:i5:New for Revitalizing the Northeast and Other Old Industrial Bases

Revitalization of the

and fo.rmtilitte acti.on

Thtee-:Yeru:Action Plan for Cu!livca.linl!S E.mergir'g lr1dusud<es in the

N<><tl•teru;t atl"ld:.the Gt;idlolines for Innovation

En:trepnonell¢bip ro Jfnateas:e !l.1e Corrtpetirilre.ness of the Nurtheast-

• Accelel:l£te t.l',e est>hliishlneiilt of the Industrial :W.vesttnent Fnnil for Reviti!!izing

Development &

Opening up

Platforms

•

•

•

the the

Accelerate the development of the three new areas-Jinpu in Dalisn, Harbin, and

Changchnn.

Establish China-Germany, China-Russia, China-RoK, China-Japan, and

China-Israel cooperation platforms in the northeast.

Build the China-Mongolia Cross-Border Economic Cooperation Zone .

nrrric-:-t to revitalize 100

derr.tonstration zones and

"PI'I!•-mng in suitable areas,

for .in.du~-;trial ttansfor:mation and

Su:pptJtt the: .rttlortaticon and txansfo:rt:t'.tation of more than. 100 urban it:tdustrial

areas naitiorrwide, and take areas and in'lettende~at .rnru:tufttettoil:Jg :an.d

tOtotlprel;erl.siv-e measures to addeess the pnoblem of smkholes ill. cotU-rmnu'l':

Su-pptJrt econox:uic transfor.tmtrion !esou.rce

industria! severe or other difficulties.

36

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 ttansfer

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.

Emerging Small or

Medium-sized

Cities

Smart Cities

Box 16: The New Urbanization

complete functions aod unique features, we will move faster to expaod the overall

functioos of eligible county seats and large towns in accordance with the size of the

permanent urban population, the population density, aod the size of the economy.

~>p(?ssess!;7;t:~~~,!'~c•l"

~-···'"""' .~'~'!? c1rpa<:ity; expru:~d theil: powers, pto~. $Xefrte1<~pOr! .s<:>. that <!Wtin<::liVief<citto:es can be to develop industry i1{ awmsucltJi~ l,Jsure jU1d

.·tzlooism:;.,c:omlm!o:t<:e and 'logistics; fufo~mJitlon ~oibif; · ~··~• ; s<:ict,~.te<:lm(>logy,~~U<:ation;(Jrfolktillfure. .

We will develop a number of new-type smart cities that focus on developing smart

infrastructote, convenient public services, and refined social governance.

. w~ will . . . ~~stn1:iion of ~Q~~dly bnil\li~ aod tl!e. use, of

¢t<>;t:iendly build,mg mJttetws; a~.~ed~ptnerit of prefu),ticatecl ~·fpr • · _ ciittstroctiOfi; make .... tnmsport ~ld; ad~ the US!" of new energy supply

syitef;ru; so~\> as the generati.on <it~ using dlstrib';'~d en"'JlY resotttc,es and

shalle>w~eotl!'i:rmil energy; <Ctlcoumge an eco-tBerid!y lifestyle; ~ ~ut the urban

laodiscaplng Pfilleci; increase urbi'!' for~t ~d green .;overage; and build a nUJjlbet of exemplaty gr.,.,; cities, eco-friendlyganlen cities, and forest citieS.

37

Sponge Cities

We will improve drainage and rainwater control and regulation facilities in urban

areas by ensuring rainwater can be absorbed by the gronnd and then retained, stored, pntified, used, or drained. Support will be given to the development of

sponge-like buildings and housing areas, roads and squares, and parks and green spaces; and to the protection and restoration of natural water systems.

We of both ~'"Unf and urban m

UPisracllng old cities ond devdojJing undezg1:oru:sd

and c:ommm1ications w'1.tl:t

7. Promoting green, circular, and /ow-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 Jaster to build JUnctional 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 Z!Jnes 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 efficientfy. 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 qualiry rf 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

38

dectricity to replace less environmentally friendly forms of energy and promote the use of

dectricity 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 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-levd environmental monitoring, inspection, and law

enforcement bodies directly under the jurisdiction of provincial-levd environmental bodies.

4) We wiU promote !ow-carbon development. We will continue to push forward pilot and

demonstration programs for low-carbon devdopment, 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 constructivdy 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.

Low-Carbon Pilot

and Demonstration

Programs

" ,_,

si>'iltii~siiuth !.':(i~~go;i on.

.. c;fifuj.te Change

•

•

•

Expand the pilot program for developing low-carbon cities with the goal of

reaching 100 cities, and issue guidelines on promoting the green and

low-carbon development of cities and on the criteria for defining a

low-carbon city.

Deepen work on the pilot programs involving eight low-carbon cities

(towns), 51 national low-carbon industrial parks, and about 1,000 low-cathon

communities.

E$p]fuh three lo\y~b!'ti demonstration rones in developingcountQes, hnplefTjebt atOlmd 30 dim ate, change mitigation and adaptatipn pwgrams,

. llt1d ~ but eoppet~tiVC: ir:lining pfogn.l)is with an enro!lnlent ~j,udtW of s~· . . .

39

8. Improving the performance uf the open economy

In ptttsuing 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 succesfol implementation uf the Silk Rnad Economic Belt and the 21st Century

Maritime Silk &ad 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 resow:ce 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-Ew:ope

freight train routes, simplify customs clearance procedw:es along the lines, and expedite the

building of international logistics gateways. We will steadily construct strategic maritime hubs.

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

frnancial policies, set up outbound RMB cooperative funds and bilateral and multilateral

industrial-capacity cooperation funds, and encourage cooperation between frnancial 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 acfjustment uf 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 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 exlnbition

centers. We will promote the integrated development of trade in goods and in services and

vigorously support the export of services in frnance, insurance, logistics, and maintenance. We

will adopt a more active import policy to support the import of advanced technology and

40

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 e.lfectivefy. 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 stifegnard 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 poverry 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.

~~non •. ffum:.

Box 18: Key Poverty Alleviation Programs

l'e9ple living i? in,li()spitable conditiOns who have registered for g<>Veroment poverty assistance i:o-'!llb~ ~;,q and proVided with housing; we will ensure that the necessary

41

Industry-led

Poverty

Alleviation

Work-Relief

Through

Infrastructure

Projects

Health Care

set ye:a:r_

In order to eradicate poverty in local areas, all resources available in poor regions will be

utilized to support the development of industries, such as speciallzed farming and

forestry, rural sightseeing, and solar power. This yea!; we have set the target of lifting more than six million people out of poverty through industry-led initiatives.

>~v '"0 vnqLI:ior;al skills ru:td and

We will increase investment in work-relief projects, with a priority on supporting the

maintenru:tce of mountains, rivers, farmlands, forests, and roads and the improvement of

the environment in small water hasins in poor regions. Over 600 million yuan will be

appropriated to fund these projects.

th<: b!lruu:ed clistciburiiJn of education resources thr:onght>ut

:imp:tove and wot'kfur•ce

We will implement prefercnril!l policies for poor rural residents in relation to the basic

medical insurance and all those eligible will be brought under the scheme to provide

assistance for major disease treatment. We will establish stable and sustained one-to-one

partnerships between national Grade III hospitals and hospitals in poor counties, and

continue to standardize the medical and healfh care service networks for counties,

townships, and villages.

2) We will provide empft?yment support to help meet the people} 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 kry 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 insutance under unified national management We will

formulate methods for diverting a portion of state capital into social security fimds. We will

comprehensively advance the integration of the basic medical insurance schemes for rural and

42

non-worlring urban residents, .mise 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 insutance 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 gtoups 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 sociery become more inwl1111d in providing public seroices and more

people benqit from them. We will establish a national list of basic public services, carry out the

national project to upgtade 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 progtam 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 modem vocational

education system and launch programs to integrate vocational education with industry. 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 undergtaduate 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 gtowth 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 integtation of the migrant population in cities. To

promote socialist cultural and ethical progtess, we will accelerate cultural reform and

development; encourage philosophy and the social sciences tD flourish; and develop literature,

att, the press, publishing, radio, television, film, and atcbives. We will develop new types of

Chinese-style think tanks. We will accelerate the development of sports such as soccer and

43

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 fi:ttther 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.

44

No.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

Tables and Figures

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

Targets Type Unit Projected Actual Figures Figures

I. Economic Development

GDP Anticipatmy % Up 7 approx. Up6.9

Primary Industry - % Up3.7 Up3.9

Secondary Industry - % Up7.0 Up6.0

Including: Industrial sector - % Up6.9 Up5.9

Tertiary Industry Anticipatoty % Up7.8 Up8.3

Output of Major Industrial and Agticultwal Products

Food Crop Anticipatoty Million

Over550.00 621.44 metric tons

Cotton -""' Million 5.50 5.61 metric tons

Meat Anticipatoiy Million

87.70 86.25 metric """

Raw coal Anticipatory Billion

3.87 3.75 metric tons

Crude oil Anticipatoty Million

213.00 214.56 metric tons

Natw:al gas Anticipatory BillionM3 140.0 134.6

Electricity Anticipatory Trillion kWh 5.8500 5.8106

Domestic Demand

Total fixed-asset investment Anticipatory % Up 15.0 Up9.8

Total retail sales of consumer Anticipatory

goods % Up 13.0 Up 10.7

External Economy

45

Perfrumance

lnpropo<nnge

In P"'i"" """"

lnpropo<nnge

lnpropo<nnge

In P"'i"" """"

Bette< than projocred

Bette< than projected

fu projocred

As projected

Bette< than proj<cred

Lowe< than projocred

As projected

Lowe< than projected

Lowe< than projected

15 Total import and export volume Anticipatory % Up 6.0 approx. Down8.0 Lower than

(US$) (USI) projected

16 Foreign direct investment Anticipatory Billion US$ 120.0 126.3 Better than projected

17 Long- and medium-term forcign

Anticipatory Billion US$ 48.0 48.0# As projected debt

18 Outbound direct investment .,_., Billion US$ 113.0 118.0 Better than projected

Price Levels

19 CP! (2014;100) Anticipatory 103.0 approx. 101.4 In proper range

Fiscal & Financial

20 Government revenue Anticipatory % Up7.3 UpS~ Basically as projected

21 Government expenditures Anticipatory % Up 10.6 Up 132 Better than projected

22 Deficit Anticipatory Trillion yuan -1.6200 -1.6200 As projected

23 Mz money supply growth Anticipatory % 12 approx. 13.3 Basically as projected

ll. Social Development and People's Wellbeing

Population and Public Health

24 ·-AY ear-end national population Obligatory Billion Within 137673 1.37462 Accomplished

25 Natural population growlb Obligatory %o Within 6.5 4.96 Accomplished

26 Percentage of permanent urban Anticipatory % 55.77 56.10 --residents projected

27 Percentage of registered urban

Anticipatory % 37.9 Under review residents

28 Number of hospital and health

Anticipatory 5.00 5.00# As projected clinic beds per 1,000 people

29 Number of service facilities for Anticipatory 4,060 4,024 As projected

people with disabilities

Percentage of the rural Achieving the Achieved the

30 population with access to safe Anticipatory % target in the target in the As projected 12th Five-Year 12th Five-Year

drinking water Plan PI"'

Education and Scientific and Technological Innovation

46

31 "t.rRetention :mte of nine-year 0"'"'""' compulsory education % 93.0 93.0 Accomplished

32 Gross enrollment .ratio for senior

Anticipatory % 87.0 87.0 .A. project«! secondary education

33 Regular undergtaduate

Anticipatory Million 7.00 7.378 .A. project«!

enrollment students

34 Gmduate enrollment Anticipatory Million

0.797 0.773# .A. p«>j<cted students

35 Spending no R&D as a

Anticipatory % 220 2.10 Lowe< than

percentage of GDP projocted

36 Number of invention patents per

Antic:ipatol:y 5.60 6.3 Be- than 10,000 people projected

Employment and Income

37 Urban jobs newly created -""Y Million Owr10.00 13.12 Bette< than p«>j<cted

38 Registered urban unemployment

Anticipatoty % Within45 4.05 Bette< than

rate p«>j<cted

39 Personal pet capita disposable Anticipatory % Up 7.0 approx. Up7.4 Bette< than

income projocted

40 Rural per capita net income -""Y % Up 7.0 opprox. Up75 Bette< than projocted

41 Urban pet capita disposable Anticipatory % Up 7.0 approx. Up6.6 &s;a~~y ..

income projected

Social Security

'ttNumber of urban :residents 42 covered by the basic old-<~g< Obligatory Million 370.00 376.92 Accomplished

insurance system Number of rural residents

43 covered by the new type of Anticipatory Million 475.00 481.41 Bette< than

rural old-age insurance system projected

trConstruction on uzban 44 government-subsidized housing Obligarory Million units 7.40 7.83 ~hed

units newlv started

III. Resource Conservation and Environmental Protection

45 'trShare of non-fossil fuels in Obligatoxy primacy energy consumption

% 11.4 12.0# Accomplished

Metric ton of

46 'tf Energy consumption per unit of Obligatory •tandam Down at least Down5.6% Accomplished

GDP ooal/10,000 3.1% yuan

47 *Carbon dioxide emissions per Obligatory Metric ton/ Down at least Down at least Accomplished

unitofGDP 10,000yuan 3.1% 6.0%#

48 'RWater consumption per 10,000 Obligatory w 60.8 58.3 Accomplished yuan of value-added of industry

47

49 Land newly designated for

Oblig><""J' 1,000

530.0 530.0# Accomplished construction ho=

50 Including. rural land Obligatory 1,000

436.7 436.7# Accomplished ho=

51 Including: cultivated land Obligatory 1,000

2%.7 2%.7# Accomplished hocta=

52 Increase in total farmland Oblig;ltory 1,000

300.0 300.0# Accomplished hectares

53 Land reclaimed from the sea Obligatory 1,000 23.0 18.0# Accomplished

ho=

54 'ti'Sulfur dioxide emissions Obligatory 10,000 Down3JY'IIl

Down5.8% Accomplished metric tons approx.

55 '¢<Chemical oxygen demand Obligatory 10,000 Down20%

Down3.1% Accomplished metric tons approx.

56 -A-Ammonia nitrogen Obligatmy 10,000 Down2.0%,

Down3.6% Accomplished metric tons '!'pro~

57 ·tl'Nitrogen oxide emissions Obligatory 10,000 Down5.00/o

Down 10.9% Accomplished metric tons approx.

58 Percentage of urban sewage

Anticipatory % 90.7 91.0 Better than

treated projected

59 PeKentage of urban household

Anticipatory % 91.0 92.5 Better than

waste safely handled projected

Notes: 1. The 2015 Plan for National Economic and Social Development lists a total of 59 targets, of which 41 are anticipatory

and 18 are obligatory. The 12 targets marked with '¢< are obligatory targets set forth in the Twelfth Five-year Plan for National Economic and Social Development of the People's Republic of China.

2. Anticipatory targets are development objectives that the goveroment hopes to achieve and figures it expects to reach; however they are not compulsory targets, nor are they predicted figures. They are realized through the actions of market entities~ as a result, the actual figures may be higher or lower than projected. Obligatory targets are mandatory and binding; they represent the government's macro regulatory intentions, and must be achieved.

3. The performance of obligatory targets is assessed on the basis of whether or not they have been accomplished. The assessment of the performance of some anticipatory targets reflects the orientation toward range-based regulation, so targets such as GDP growth rates and prices are assessed on the basis of whether or not they are within the appropriate range; the performance of other anticipatory targets is assessed on the basis of its standing in relation to the projected figures, i.e. lower than projected, basically as projected, as projected, and better than projected.

4. The figures marked with # are estimated figures for 2015; the actual figures will be confirmed following the final review and adjustments by relevant departments.

48

Percent 60

50

40

30

20

46.1

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

45.5 46.9 48.1 ol:

50.5 ...&.

:--=-= 44.3

i 45.0

---m;...... ___ ._ 43.7 42.7 - - - Ill

40.5

9.5 9.5 9.4 9.2 9.0

10 ·---------~---------~---------~----------+

0 2011 2012 2013 2014 2015

-·Primruy Industry - Secondruy Industry -ot-Tertiruy Industry

Source: National Bureau of Statistics

3. Urban Jobs Newly Created

Million Jobs

14

13

12

II

10 2011 2012 2013 2014 2015

Source: Ministry of Human Resources and Social Security

49

Billions ofUS$

150

120

90

60

30

0 2011

4. Non-Financial Inward and Outward Foreign Direct Investment

119.6

2012 2013 2014

126.3

2015

iJ Inward FDI in Non-Financial Sectors Ill Outward FDI in Non-Financial Sectors

Source: :Ministry of Commerce

5. Grain Output

Millions ofMetric Tons

640 621

600

560

520

480

440

400 2003 2005 2007 2009 2011 2013 2015

Source: National Buxeau of Statistics

50

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

Percent

0

-I

-2 -2.0

-3 -3.6 -3.7

-4

-5

-6

-7 2011 2012 2013 2014

Sow:ce: National Bureau of Statistics

Yuan

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

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

31,195

26,467

24,127

2011 2012 2013 2014 2015

CJUrban Per Capita Disposable Income EZ!Rural Per Capita Disposable Income

._Ratio of Urban Income to Rural income

Source: National Bmeau of Statistics

51

2015

Percent

4.20

3.90

3.60

3.30

3.00

2.70

2.40

2.10

1.80

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

Urban Government-subsidized Housing Projects Renovation of

Year (million units) Dilapidated Rnral

Basically Houses Started

Completed (million)

2011 4.32 10A3 2.70

2012 6.01 7.81 5.60

2013 5.44 6.66 2.66

2014 5.11 7.40 2.66

2015 7.72 7.83 4.32

2011-2015 (12th

Five-year Plan Period) 28.60 40.13 17.94

Source: Ministry of Housing and Urban-Rural Development

52