III. Tasks for 2019
This year, in pursuing economic and social development, we will face weighty tasks, many challenges, and high demands. We must have clear priorities and address crucial issues to deliver a solid performance across the board.
1. We will continue to develop new and improved approaches to macro regulation and keep the main economic indicators within an appropriate range.
We will keep using market-oriented reform thinking and approaches to resolve problems in development; make good use of countercyclical macro policy regulation; add to and use flexibly financial, monetary, and employment policy instruments; make regulation more forward-looking, targeted, and effective; and create the conditions for ensuring a stable economic performance.
We will implement larger-scale tax cuts.
We will introduce both general-benefit and structural tax cuts, focusing primarily on reducing tax burdens in manufacturing and on small and micro businesses.
VAT reform will be deepened: we will reduce the current rate of 16 percent in manufacturing and other industries to 13 percent, and lower the rate in the transportation, construction, and other industries from 10 to 9 percent, thus ensuring that tax burdens in our main industries are meaningfully reduced; keep the lowest bracket rate unchanged at 6 percent, while adopting supporting measures, like increased tax deductions for producer and consumer services, to see that in all industries tax burdens only go down, not up; and continue making progress toward cutting the number of VAT brackets from three to two and simplifying the VAT system. We will ensure that the general-benefit tax cut policies issued at the start of the year for small and micro businesses are put into effect. Our moves to cut tax on this occasion aim at an accommodative effect to strengthen the basis for sustained growth while also considering the need to ensure fiscal sustainability; are a major measure to lighten the burden on businesses and boost market dynamism; are an important reform to improve the tax system and achieve better income distribution; and are the result of a major decision taken at the macro policy level in support of the efforts to ensure stable economic growth, employment, and structural adjustments.
We will significantly reduce enterprise contributions to social insurance schemes.
We will lower the share borne by employers for urban workers’ basic aged-care insurance, and localities may cut contributions down to 16 percent. The social insurance premium collection methods currently in operation will be kept unchanged. No locality should take any measure that increases the burden on small and micro enterprises when reforming their collection systems, or require, on their own, that longstanding arrears be paid off in a lump sum. The current policy of reducing premiums for unemployment insurance and work injury compensation insurance will continue. This year, premium payments, particularly for small and micro businesses, must be substantively reduced.
We will speed up reforms in the provincial-level management of aged-care insurance funds, continue to increase the proportion of enterprise workers’ basic pension funds under central government allocation, and replenish social security funds through the injection of state capital. We must reduce burdens on enterprises, but also ensure that employees’ social security benefits remain unchanged and aged-care pensions increase as appropriate and are paid on time and in full, so that social security funds are sustainable and both enterprises and employees benefit.
We will ensure tax and fee cuts are fully implemented.
Tax cuts and fee reductions get right to the spot in tackling the pains and difficulties currently troubling market entities; as a policy option, they are both fair and efficient. This year, we will reduce the tax burdens on and social insurance contributions of enterprises by nearly 2 trillion yuan. This will create big pressure on government budgets at all levels. To support this lightening of the burden on enterprises, governments at all levels must tighten their belts and find workable means of raising funds.
The central government needs to increase revenue and reduce expenditures. Profits turned in by designated state-owned financial institutions and enterprises directly under the central government should be increased; general expenditures should be cut by over 5 percent, spending on official overseas visits, official vehicles, and official hospitality should be cut by another 3 percent, and all funds that have long stayed unused will be taken back.
Local governments also need to dig deep, take big steps to improve the mix of spending, and put various funds and assets to good use through multiple avenues.
We will let market entities, especially small and micro businesses, feel the weight of their burden being meaningfully lightened, honoring our promise to enterprises and society, and seeing that no matter the number of difficulties, this important job gets done and gets done well.
We will work hard to alleviate the difficulties faced by enterprises in accessing affordable financing.
We will reform and refine monetary and credit supply mechanisms, and employ as needed a combination of quantitative and pricing approaches, like required reserve ratios and interest rates, to guide financial institutions in increasing credit supply and bringing down the cost of borrowing, ensure targeted and efficient support for the real economy, and avoid funds circulating within the financial sector without entering the real economy or being diverted out of the real economy.
More targeted cuts will be made to required reserve ratios for medium and small banks; the additional funds thus released will be lent to private enterprises and small and micro businesses.
We will support large commercial banks in replenishing capital through multiple channels, strengthen their capacity to supply credit, and encourage them to increase medium- and long-term loans and credit loans to the manufacturing sector. This year, loans to be granted to small and micro businesses by large state-owned commercial banks will increase by over 30 percent.
Fees charged for banking and intermediary services will be overhauled. We will improve the internal assessment mechanisms of financial institutions, encourage more inclusive financial services, achieve a marked improvement in providing financing for medium, small, and micro enterprises, and see that there are definite reductions in overall financing costs.
We will make effective use of local government bonds.
This year, 2.15 trillion yuan of special local government bonds will be issued, an 800 billion yuan increase on last year. This is designed to both provide funding for key projects and create conditions for better forestalling and defusing local governments’ debt risks.
The scope of use for special local government bonds will be moderately expanded. We will continue the issuance of some local government bonds to replace outstanding debts in order to reduce the interest payment burdens of local governments. We will encourage the adoption of market approaches to solve the issue of maturing debts on financing platforms and make sure that projects financed by such debts are not stopped half way.
We will use multiple channels to achieve stable and expanding employment.
We will work to ensure employment for key groups such as college graduates, demobilized military personnel, and rural migrant workers; and we should give greater employment support for urban jobseekers facing difficulties in securing employment. Enterprises hiring staff from rural poor people or urban residents registered as unemployed for at least six months will be entitled to a fixed amount of tax and fee deductions for three years.
We will strengthen support for flexible employment and new forms of employment.
We will resolutely protect against and stop gender and identity discrimination in employment.
We will implement a vocational skills training initiative, and allocate 100 billion yuan from the surplus in unemployment insurance funds to provide training for over 15 million people upgrading their skills or switching jobs or industries.
Stepping up the development of modern vocational education is a strategic move that will not only ease current employment pressure, but also help to address the shortage of highly-skilled personnel. We will reform and improve the ways that vocational colleges conduct examinations and enrollment, encourage more high school graduates, demobilized military personnel, laid-off workers, and rural migrant workers to apply, and this year achieve a large-scale expansion of one million in student enrollments.
We will expand the coverage of scholarships and grants for vocational college students and raise the level of financial assistance, and speed up work to align vocational technical grade certificates with academic credentials. We will reform the operating mechanisms of vocational colleges and raise the quality of vocational education.
The central government will greatly increase fiscal support for vocational colleges, and local governments should also strengthen their support. A state scholarship for secondary vocational education will be established. We will support enterprises and private actors in providing vocational education. Through major reforms and the development of modern vocational education, we will move faster to train the different types of technicians and skilled workers urgently needed in China’s development, enabling more young people to gain professional skills and realize their potential and producing a vast range of talent ready to shine bright.
2. We will work to energize market entities and improve the business environment.
There are hundreds of millions of market entities in China, and the number continues to grow. The key to promoting stable economic growth lies in maintaining and increasing their level of activity. We must push forward with reforms that delegate power, improve regulation, and upgrade services, bring down government-imposed transaction costs, and make every effort to create an enabling environment for development.
We will cut government approvals and improve services to create a favorable environment for investment and business startups.
Market allocation is the most efficient form of resource allocation. We will further shorten the negative list on market entry and promote across-the-board implementation of the policy of “entry unless on the list.” The government must act with resolve to hand matters it shouldn’t manage over to the market, and make maximum reductions to its direct allocation of resources. Every requirement for government approval that should be canceled will be canceled. When approval is required, the procedures and steps involved will be simplified. This will leave companies to spend more time doing business and less time chasing approvals.
This year, all permits required of businesses will be separated from the business license to make it quicker and easier for companies to get a license and start operating as soon as possible; and we will put an end to the phenomenon of “letting firms in but not letting them do business.” Reform of the system for construction project approval will be introduced nationwide, and the time of approval needed at every stage of a project will be significantly shortened.
We will encourage online approvals and services, and work faster to make it possible for such services to be accessed via one website and processed remotely, so that more matters can be handled without the need to be physically present. For matters that do require presence in person, they should be processed at a single window, within a specified time, and without the need for a second visit. We will continue to pursue the Cut Certification to Create Convenience reform initiative, and see that businesses and the public are not saddled with running from pillar to post for certificates.
We will establish a government service evaluation system, and let businesses and the public judge if our service is up to scratch. Delivering good services is what a government is meant to do; failure to do so means failing in its duties.
We will conduct impartial regulation to promote fair competition.
Fair competition is at the heart of a market economy, and impartial regulation is a safeguard for fair competition. We will reform and improve the fair competition review and impartial regulation systems, and move faster to do away with all regulations and practices that impede the functioning of a unified market and fair competition.
Simple regulations are easy to follow. The simpler and more transparent the rules are, the more robust and effective regulation is. At the national level, the focus is on developing unified regulatory rules and standards, while local governments should concentrate most of their energy on conducting impartial regulation.
We will continue interdepartmental oversight conducted through the random selection of both inspectors and inspection targets and the prompt release of results. We will promote credit rating-based regulation and the Internet Plus Regulation reform initiative, develop better ways of enforcing laws on environmental protection, fire prevention, tax collection, and market oversight, and see that law breakers are punished in accordance with law and the law-abiding are let be.
We will deepen the reform of coordinated law enforcement by government departments, overhaul government penalties and punitive measures, and address overlap and duplication in enforcement. Regulators themselves must also be subject to strong oversight and follow rules. There can be no tolerance for selective or arbitrary law enforcement or for making things difficult for businesses and people.
We will, in accordance with law, crack down on violations of law such as the production and sale of counterfeit and substandard goods, and make the price to pay for law breakers too dear to afford. We will use impartial regulation to ensure a fair, efficient, and dynamic market.
We will carry out reforms to promote reductions in business-related charges.
We will deepen market-oriented reforms in the electric power sector, overhaul surcharges on electricity prices, lower electricity costs in manufacturing, and cut the average electricity price for general industrial and commercial businesses by another 10 percent.
We will advance the reform of the toll roads system, move to cut tolls on highways and bridges, and put a stop to unjustified requirements for approval as well as arbitrary charges and fines on passenger and freight transport vehicles. Within two years, we will remove almost all expressway toll booths at provincial borders and make nonstop, swift collection a reality. This will cut traffic congestion and make road transport more convenient. A number of railway and port charges will be abolished or lowered.
We will launch an initiative to address the collection of charges by intermediary organizations. We will continue reviewing and standardizing government levied charges. We will speed up the development of a comprehensive listing system for the collection of fees and charges, making charge collecting open and transparent and leaving unauthorized charges no place to hide.
3. We will continue to pursue innovation-driven development and foster new growth drivers.
We will make full use of our country’s combined strengths-its abundant human resources and talent and vast domestic market, reform and develop new mechanisms for scientific and technological R&D and industrial application, and foster professionalism, to speed up the replacement of old growth drivers with new ones.
We will work to transform and upgrade traditional industries.
To promote the development of high-quality manufacturing, we will strengthen the foundations of industry and the capacity for technological innovation, boost the integrated development of advanced manufacturing and modernized services, and work faster to make China strong in manufacturing.
We will create industrial internet platforms and expand Intelligent Plus initiatives to facilitate transformation and upgrading in manufacturing. We will support enterprises in speeding up technological transformation and equipment upgrading by extending the preferential policy of accelerated depreciation of fixed assets to the entire manufacturing sector.
We will strengthen the supporting capacity of quality infrastructure, upgrade our standards to meet advanced international ones, and improve the quality of products and services to encourage more domestic and foreign users to choose Chinese goods and services.
We will work to speed up the growth of emerging industries.
We will strengthen R&D and the application of big data and artificial intelligence technologies, foster clusters of emerging industries like next-generation information technology, high-end equipment, biomedicine, new-energy automobiles, and new materials, and expand the digital economy. We will continue accommodative and prudential regulation, support the growth of new forms and models of business, and stimulate the healthy development of the platform economy and the sharing economy. We will speed up efforts to pursue Internet Plus initiatives in all industries and sectors.
We will continue to speed up broadband and lower internet rates. We will launch demo projects to extend 1,000M broadband connectivity to urban homes, upgrade networks for distance education and telemedicine, and expand the capacity of mobile telecommunication base stations and upgrade them, to provide faster and more reliable broadband com1ections for internet users.
This year, average broadband service rates for small and medium enterprises will be lowered by another 15 percent, and average rates for mobile internet services will be further cut by more than 20 percent. Cellphone subscribers nationwide will be able to keep their numbers while switching carriers, and cellphone packages will be regulated to achieve solid fee cuts for all consumers to see.
We will increase our ability to provide scientific and technological support.
We will increase support for basic research and application-oriented basic research, step up original innovation, and work harder to achieve breakthroughs in core technologies in key fields.
We will build enterprise-led mechanisms for bringing together firms, universities, and research institutes to engage in innovation. Innovation cooperation with other countries will be expanded. We will strengthen intellectual property protection across the board, improve the system of punitive compensation for IP infringements, and promote invention and creation and their industrial application.
Technological innovation is in essence a human creative activity. We must fully respect and trust our scientists and researchers, and empower teams and leaders of innovation by placing more human, financial, and material resources at their disposal and giving them more power to make decisions on technology roadmaps. We will further increase the proportion of indirect funding for basic research projects, pilot the creation of ceilings in funding that enable the retention of unused funds, set no limits on the proportions of spending items, and give research teams the power to decide how to use funds.
We will work to ensure that measures to reform science and technology management systems are fully implemented, and must not allow reform policies to become hollow promises. We will work hard to cut red tape to enable researchers to concentrate on the pursuit of learning, innovation, and breakthroughs. We will strengthen research ethics, improve academic practice, take disciplinary action against academic misconduct, and guard firmly against rash action.
China has the largest pool of scientific and technological personnel in the world. If we foster a healthy research environment, we’ll be sure to see brilliant and capable people emerge in all fields and create a boundless stream of innovations.
We will do more to encourage startups and innovation nationwide.
We will encourage more private actors to engage in innovation and start businesses, expand the space for economic and social development, strengthen comprehensive services, and give play to the pathfinding role of innovation and entrepreneurship demo centers.
We will strengthen inclusive support for innovation and business startups, and implement preferential tax policies such as raising the VAT threshold from 30,000 to 100,000 yuan in monthly sales for small-scale taxpayers.
We will reform and improve financial support mechanisms, establish a science and technology innovation board that will pilot an IPO registration system, encourage the issuing of special bonds for innovation and entrepreneurship, and support the growth of venture capital investment.
We will reform and improve mechanisms for training, employing, and evaluating capable people and provide better services for students returning from overseas and foreign professionals. By combining our response to market demand with a championing of the spirit of humanity, and by bringing together and using well capable people with talents of all kinds, we will be sure to see better development in Chinese innovation, and thus do our part for the progress of human civilization.
4. We will stimulate the development of a robust domestic market and keep unlocking the potential of domestic demand.
We will fully leverage the basic role of consumption and the key role of investment, ensure steady effective domestic demand, and thus boost stable economic performance.
We will promote steady growth in consumption.
We will use a combination of measures to increase urban and rural personal incomes and boost capacity for consumption. We will fully implement the revised Individual Income Tax Law to see that approximately 80 million taxpayers to whom reductions apply get the most out of these policies. We will adapt to new changes in consumption needs, use multiple avenues to increase the supply of quality products and services, and act faster to resolve problems and difficulties blocking the entry of private investment.
The number of people in China aged 60 and above has now reached 250 million. We will take significant steps to develop elderly care, especially community elderly care services. We will provide support to institutions offering services in the community like day care, rehabilitation care, and assisted meals and assisted mobility using measures such as tax and fee cuts and exemptions, funding support, and reduced charges for water, electricity, gas, and heating. New residential areas should include facilities for community elderly care services. We will reform and refine policies for integrating medical and elderly care services, and extend trials for long-term care insurance. Only when the elderly live happily can the young have a future to look forward to.
Infant and child care is important to millions of families. In response to the new demands created by the full implementation of the two -child policy, we will move faster to develop various types of infant and child care services, encourage private actors to run childcare and early childhood education agencies, and provide better protection for the safety of our children.
We will develop and strengthen the tourism industry. To maintain steady automobile consumption, we will continue preferential policies on the purchase of new-energy vehicles. We will develop new forms and models of consumption, and promote the growth of both online and offline consumption. We will improve logistics networks in rural areas and support the development of e-commerce and express delivery services. We will strengthen the protection of consumers’ rights and interests, and ensure worry-free and convenient consumption.
We will expand effective investment as appropriate.
We will closely follow national development strategies and accelerate the implementation of a number of key projects. 800 billion yuan will be invested in railway construction, 1.8 trillion yuan will be invested in road construction and waterway projects, and work will start on a number of major water conservancy projects. We will speed up planning and construction of the Sichuan-Tibet Railway, and boost infrastructure investment for intercity transportation, logistics, utilities, disaster prevention and mitigation, and civil and general aviation. We will further develop next-generation information infrastructure. This year, 577.6 billion yuan is included in the central government budget for related investment, an increase of 40 billion yuan on last year.
We will explore new forms of project financing, lower as appropriate capital contribution requirements for infrastructure projects, make good use of developmental financial instruments, and attract more private capital into projects in key areas. We will see that policies to encourage private investment are implemented, and take systematic steps to strengthen cooperation between the government and private capital
The government must set an example in acting in good faith and honoring contracts; new officials must not be allowed to get away with ignoring obligations undertaken by predecessors. Over 50 percent of overdue payments to enterprises must be made by the end of the year, and new arrears are impermissible.