REPORT ON THE IMPLEMENTATION OF THE 2018 PLAN FOR NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT AND ON THE 2019 DRAFT PLAN FOR NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT
Delivered at the Second Session of the Thirteenth National People's Congress on March 5, 2019
National Development and Reform Commission
The National Development and Reform Commission has been entrusted by the State Council to deliver this report on the implementation of the 2018 plan and on the 2019 draft plan for national economic and social development to the Second Session of the 13th National People's Congress (NPC) for your deliberation. It also invites comments from the members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).
I. Implementation of the 2018 Plan for National Economic and Social Development
In 2018, we were confronted with a complex and volatile environment internationally and formidable tasks in promoting reform, development, and stability at home. Under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core and the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, all regions and departments fully implemented the guiding principles of the 19th CPC National Congress and the second and third plenary sessions of the 19th CPC Central Committee. We strengthened our consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment; increased our confidence in the path, theory, system, and culture of socialism with Chinese characteristics; and resolutely upheld General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and resolutely upheld the Party Central Committee's authority and its centralized, unified leadership.
In accordance with the decisions of the CPC Central Committee and the State Council, we pursued coordinated implementation of the five-sphere integrated plan and the four-pronged comprehensive strategy. We stayed committed to the underlying principle of pursuing progress while ensuring stability, followed the new development philosophy, fulfilled the requirement for high-quality development, and took supply-side structural reform as our main task. We implemented the Report on the Work of the Government and the 2018 Plan for National Economic and Social Development approved at the First Session of the 13th NPC, and adopted the suggestions from the review of the 2018 Plan by the NPC Financial and Economic Affairs Committee, as well as those put forth at the 13th NPC Standing Committee's Seventh Session regarding the midterm assessment report on the implementation of the 13th Five-Year Plan (2016-2020).
We focused on promoting market-oriented reforms and high-standard opening up, worked hard to develop a modernized economy, and delivered solid progress in the critical battles against potential risk, poverty, and pollution. We responded effectively to major changes in the external environment, and took coordinated steps to achieve steady growth, advance reform, make structural adjustments, improve living standards, and guard against risk. We worked to ensure stability in employment, financial operations, foreign trade, foreign investment, domestic investment, and expectations. The economy maintained general stability and registered good progress, the main targets and tasks in economic and social development for the year were accomplished, and implementation of the 2018 Plan was successful overall.
1. We employed new and improved methods of macro regulation and ensured major economic indicators stayed within an appropriate range.
We gave better play to the guiding role of national development plans to ensure continuity and stability between macroeconomic policies. We refrained from resorting to a deluge of strong stimulus policies. Instead, we strengthened targeted, precision, and well-timed regulation on the basis of range-based regulation. We took proactive measures to carry out anticipatory adjustments and fine-tuning, strengthened coordination between macroeconomic policies, and better managed expectations. We appropriately handled economic and trade friction between China and the US. With these efforts, we were able to maintain stable and sound economic development.
1) Macro-regulation targets were achieved.
China's gross domestic product (GDP) reached 90.03 trillion yuan, an increase of 6.6%, which was in line with the projected target. We implemented a more proactive employment policy, and established a sound emergency response mechanism to keep employment stable. More jobs were created through innovation and business startups. A total of 13.61 million urban jobs were added over the year, and the survey-based urban unemployment rate was kept at a relatively low level of about 5%. For prices we strengthened monitoring, analysis, early warning, and regulation, and ensured market supply and price levels remained stable. The consumer price index (CPI) registered a moderate rise of 2.1% for the year. A basic equilibrium was kept in the balance of payments and foreign exchange reserves were stable at over US$ 3 trillion.
2) Fiscal and financial indicators were stable.
We implemented a proactive fiscal policy with greater intensity and enhanced its performance. Further steps were taken to cut taxes and fees, and efforts to improve the composition of government spending continued, to ensure funding for major areas such as the improvement of living standards. Revenue in the general public budget was 18.34 trillion yuan, an increase of 6.2%; expenditure totaled 22.09 trillion yuan, an increase of 8.7%; and the fiscal deficit was 2.38 trillion yuan, the same as the budgeted figure. In monetary policy, a prudent and neutral stance was maintained, and we used policies of differentiated reserve ratios and differentiated credit to guide more funding toward private enterprises and small and micro businesses in the real economy. The national financing guaranty fund was put into operation. At the end of 2018, growth in the balance of the M2 money supply was 8.1%.
3) Investment in areas of weakness continued to increase.
We enabled investment from the central government budget to play a leading role in improving the supply structure. We established a mechanism to strengthen coordination in shoring up infrastructure weaknesses, added to the major project reserve, and coordinated the planning and construction of major infrastructure projects. The length of in-service railways exceeded 131,000 kilometers, including more than 29,000 kilometers of high-speed rail lines. The total length of expressways now stands at 143,000 kilometers. To encourage sustainable and healthy private investment, we rolled out a number of attractive projects in sectors like rail, civil aviation, oil and natural gas, and telecommunications, and the public-private partnership (PPP) model was extended to more areas in a well-regulated and orderly way. Total fixed-asset investment (excluding rural households) increased by 5.9%, which includes an 8.7% increase in private investment. There were continuous improvements in the composition of investment, with investment in high-tech manufacturing and equipment manufacturing growing 16.1% and 11.1% respectively.
4) Strong improvements in the quality and scale of consumption were achieved.
The Guidelines on Improving Consumption-Promoting Systems and Mechanisms to Unleash the Potential of Personal Consumption were implemented, along with a three-year action plan. The campaign to create a worry-free atmosphere for consumers yielded further progress and helped improve the consumption environment. We lowered import tariffs on medicines, automobiles, and some non-durable consumer goods, and improved government subsidy policies for promoting the use of new-energy vehicles (NEVs). We improved the supply system for new types of information products at a faster pace and maintained rapid growth in information consumption. We unveiled and put in motion the Implementation Plan on Making Hainan an International Hotspot for Tourism and Shopping and the Action Plan on Improving and Upgrading Rural Tourism (2018-2020). Trials to boost cultural consumption among urban and rural residents continued, over 1,000 key state tourist sites cut their ticket prices, and a national training program was launched in the domestic services sector, thus further unleashing the potential for consumption in relevant areas. Total annual retail sales of consumer goods rose 9%. With a contribution of 76.2% of growth, consumption is playing a much bigger role in driving the economy.
2. We steadily advanced supply-side structural reform and made strong progress toward high-quality development.
We focused on top-level planning to promote high-quality development. We implemented the Guidelines on Promoting High-Quality Development, and took gradual steps toward establishing an institutional system for high-quality development. We continued to make solid progress in supply-side structural reform. With the focus on cutting ineffective supply, fostering new growth drivers, and reducing costs in the real economy, we saw yet further improvements in the composition of supply and sustained increases in the quality and efficiency of development.
1) Solid progress was achieved in cutting overcapacity.
Our efforts to cut overcapacity through structural adjustments and improvements continued. We cut production capacity by over 35 million metric tons of crude steel and 270 million metric tons of coal, thus achieving the targets for steel and coal overcapacity cuts in the 13th Five-Year Plan two years ahead of schedule. A large number of small, poorly-managed, and heavily-polluting enterprises were closed down, and a relatively high rate of industrial capacity utilization was maintained. Further progress was made in handling the debts of "zombie enterprises" and enterprises with excess capacity, and proper steps were taken to help workers displaced due to overcapacity cuts, ensuring they were resettled to new positions or found new employment in a smooth and orderly fashion.
2) New strides were taken in revitalizing the real economy.
As progress continued in building China into a manufacturer of quality, the total value-added of industry broke the 30-trillion-yuan mark. We promulgated the Guidelines on Promoting the Demonstration and Application of Newly-Developed Major Technological Equipment, and stepped up efforts to make breakthroughs in a number of core and key technologies. We moved forward with the implementation of the Three-Year Action Plan on Enhancing Core Competitiveness in the Manufacturing Sector (2018-2020) and the Action Plan on Developing the Industrial Internet (2018-2020). We promoted the in-depth integration of the internet, big data, and artificial intelligence (AI) into the real economy, and carried out demonstration projects for integrated applications of the industrial internet plus smart manufacturing. Breakthroughs were made at a faster pace in core technologies in key areas such as rail transit, high-end medical appliances, and industrial robots, and these have been successfully applied to industry. We carried out a new round of technology transformation and upgrading projects, and accelerated technology transformations in major areas such as high-end equipment, smart manufacturing, and new materials. Further strides were taken in the strategy to make China a country strong on quality, and our work on strengthening quality, standards, and brands was intensified. We issued the Plan on the Layout and Development of National Logistics Hubs. In the services sector, we continued implementing the guidelines on innovation-driven development, carried out dedicated campaigns to raise quality, and conducted trials of integrated reform.
3) Work on bringing down costs continued.
We stepped up efforts to reduce taxes and fees, helping ease the burden on enterprises and individuals by about 1.3 trillion yuan for the year. The rates of value added tax (VAT) were lowered from 17% to 16% in manufacturing and some other industries, and from 11% to 10% in industries such as transportation, postal services, construction, and basic telecommunications services and on goods such as agricultural products. The annual sales threshold for small-scale taxpayers was raised. The policy of a 75% tax deduction for research and development (R&D) expenses was extended to cover all enterprises. Financial institutions' credit line threshold for VAT exemption rose to 10 million yuan. We reduced or abolished a range of government administrative fees and government-managed funds. We continued the policy of reducing businesses' contributions to social insurance schemes and the housing provident fund, and overhauled and standardized business service fees. We took strong steps to lower energy and logistics costs, and continued to raise the proportion of market-based electricity transactions. The target to cut the price of electricity for general industrial and commercial businesses by an average of 10% was surpassed. Purchase tax on trailers was halved, and the policy of differentiated tolls was extended to cover more expressways.
3. We made solid progress in the critical battles against potential risk, poverty, and pollution, and yielded positive results in key tasks.
We formulated an action plan for winning the three critical battles, for which implementation has proceeded as planned and in accordance with laws and regulations. We scored notable achievements in improving financial governance, hit our poverty alleviation targets for the year, and secured fresh progress in improving the environment.
1) Major risks were manageable on the whole.
We have curbed excessively rapid growth of the macro-leverage ratio and maintained general stability in the financial market. The RMB exchange rate has remained generally stable at an appropriate level. Market restraints have been gradually enhanced, and the concept of prudent business operations has taken stronger root. Further improvements were made in financial regulation mechanisms, and initial success was achieved in addressing acute problems in the financial sector. We moved forward with reforms to improve the management system for foreign-debt registration and effectively guarded against foreign debt risks. The growth of commodity housing prices in major cities was basically brought under control, and the policy of providing monetary compensation to people displaced by the rebuilding of run-down urban areas was improved according to local circumstances.
2) Targeted poverty alleviation registered strong progress.
We stepped up support and assistance to particular groups affected by poverty and to extremely poor areas, including the three regions and three prefectures. We made solid progress in relocating people from inhospitable areas and implementing work-relief programs. We stepped up initiatives to alleviate poverty through the development of local industries, employment, education, healthcare services, culture, tourism, and the internet, as well as the provision of ecological conservation subsidies and financial support. These efforts have enabled poor areas to boost their capacity for self-sufficient development. Over the year, 13.86 million people in rural areas were lifted out of poverty, our target of relocating 2.8 million people from inhospitable areas was achieved, and we helped 3.88 million people in poverty find jobs.
3) Major progress was made in the critical battle against pollution.
Putting into practice Xi Jinping's thinking on promoting ecological progress and the principles from the national conference on ecological and environmental protection, we improved top-level planning for strengthening ecological and environmental protection across the board. Follow-up environmental inspections were carried out by the central government as planned, the river chief and lake chief systems came into effect nationwide, and trials of the national park system registered steady progress.
We launched campaigns to protect our blue skies, clear waters, and clean lands across the country and began implementing the Three-Year Action Plan for Keeping Our Skies Blue. The annual average concentrations of fine particulate matter (PM2.5) decreased by 10.4% in the cities at and above prefecture level that fell short of the national standards, and further steps were taken to address water and soil pollution. Total emissions of major pollutants and carbon dioxide emissions per unit of GDP continued to fall.
We took resolute measures to block illegal waste imports, and achieved a reduction of 46.5% in solid waste imports on the previous year. Work on the sorted treatment of waste made rapid progress. We completed the first steps in setting standards for enforcing ecological-conservation red lines in 15 provinces, autonomous regions, and municipalities, including Beijing, Tianjin, and Hebei, and basically completed plans for 16 others including Shanxi. We formulated the guidelines on deepening reforms for coordinated administrative law enforcement to protect ecosystems and the environment.
We made steady progress in major ecological conservation and restoration projects. We returned more than 825,333 hectares of marginal farmland to forest or grassland, and undertook projects to return 2.47 million hectares of grazing land to grassland, which involved constructing grassland fencing and improving the condition of degraded grasslands. We did more to protect coastal wetlands and strictly controlled and regulated coastal reclamation activities. Progress was made in establishing market-based mechanisms for diversified ecological compensation and the Guidelines on Innovating and Improving Pricing Mechanisms for Promoting Green Development were issued for implementation.
We steadily moved forward with the work to adopt clean energy sources for winter heating in northern China, and achieved progress in building systems for natural gas production, supply, reserve, and sale. We continued working to cut coal consumption and to replace coal with alternative energy in key areas, and launched trials on trading energy consumption rights. The total volume targets for upgrading coal-burning power plants nationwide to achieve ultra-low emissions and energy efficiency were completed two years ahead of schedule. We made moves to strengthen the development and regulation of the long-term mechanism for absorbing clean energy into power grids, and delivered a reduction in both the amount and ratio of idle power and a decrease of 3.1% in energy consumption per unit of GDP. Steady progress was made in establishing a national market for trading carbon emission rights.
On the international stage, China worked to bring about positive results at the United Nations Climate Change Conference in Poland, and made an important contribution to ensuring the adoption of the Paris Agreement's implementation guidelines.
4. We fully implemented the innovation-driven development strategy and continued to unlock new enthusiasm for innovation and business startups.
We bolstered the role of innovation as the primary driver of development. Substantive breakthroughs were made in reforming the management system for science and technology, and efficiency was greatly enhanced in the national innovation system. High-tech industries and strategic emerging industries recorded rapid growth, the Internet Plus action plan was further implemented, and much progress was made toward fostering new growth drivers. Innovation and business startups have been elevated to yet higher levels, and new strides have been made in building China into a country of innovators.
1) Our scientific and technological strength and innovation capacity continued to increase.
China's spending on R&D reached 2.18% of GDP, and the contribution of scientific and technological advances to economic growth hit 58.5%. Basic research was further strengthened with a number of firsts being achieved: Chinese scientists demonstrated a toffoli gate in a semiconductor three-qubit system, found evidence for Majorana bound states in an iron-based superconductor, and created a single-chromosome eukaryote. We also saw a constant stream of major scientific and technological advances throughout the year: The Chang'e-4 lunar probe successfully landed on the far side of the moon; China's second homemade aircraft carrier took to the seas for its trial voyage; our homemade large amphibious aircraft completed its first overwater flight; the BeiDou Navigation Satellite System began providing services to the world; and China's 5G system equipment has reached the pre-commercial level.
We ensured faster and better-quality infrastructure construction in major science and technology, civil-space, information, and other fields, and continued improving the management mechanisms and assessment and incentive systems for scientific research. Pilot reforms for comprehensive innovation have made further progress—123 out of 169 preliminary trials were completed and a second batch of 23 reform measures are currently being replicated and applied on a broader scale. Efforts to see Beijing and Shanghai become global science and technology innovation centers picked up pace, plans on building Guangdong-Hong Kong-Macao Greater Bay Area into an international center for science and technology innovation were issued for implementation, and construction on the three comprehensive national science centers in Beijing's Huairou, Shanghai's Zhangjiang, and Anhui's Hefei advanced smoothly. The Implementation Plan for the Innovation-Driven Development Strategy of Hainan Province was released.
Our state-level new areas, development zones, 20 national innovation demonstration zones, and 168 national new- and high-tech development zones played a stronger role in leading development, and good progress was made in the construction of national technological innovation centers for high-speed trains and NEVs. We unveiled the Guidelines on Building National Industrial Innovation Centers, and stepped up the building of the three national industrial innovation centers for advanced computing, advanced memory technology, and bio-breeding. We continued to enhance the role of enterprises as the principal entities in technological innovation, and certified a further 111 state-level enterprise technology centers.
2) Business startups and innovation initiatives were intensified.
The Guidelines on Promoting High-Quality Development of Innovation and Business Startups and Upgrading the National Business Startups and Innovation Initiative was promulgated. We continued to carry out the Three-Year Action Plan for Developing Business Startups and Innovation Platforms in Manufacturing, and confirmed 150 demonstration projects to pilot these platforms. Over 6,500 maker spaces have served 400,000 entrepreneurial teams, and helped generate over 1.4 million jobs; 1,824 rural maker spaces have filled 49,000 places on training courses and incubated 23,000 enterprises. We encouraged more robust development of business startups and innovation demonstration centers and similar demonstration hubs for small and micro businesses, and set up a sound national information service portal for related policies. We successfully held the 2018 National Entrepreneurship and Innovation Week and the Innovating China Tour. The National Venture Capital Guide Fund for Emerging Industries operated effectively, helping more than 1,200 new enterprises receive investment. The number of newly registered businesses in 2018 grew by 10.3%, with an average of 18,400 new businesses daily.
3) Emerging industries enjoyed vigorous development.
The National Development Plan for Strategic Emerging Industries during the 13th Five-Year Plan Period was fully implemented. We promoted the development of strategic industry clusters, and moved faster to advance major projects on the "Internet Plus" model, next-generation information infrastructure, innovation-driven AI development, bio-tech industry, and civil-space infrastructure. The value-added of large high-tech manufacturing enterprises grew 11.7%, much higher than that of large industrial enterprises as a whole. The E-Commerce Law was promulgated, and a number of policies were issued over the course of the year to guide and regulate the development of new forms of business, such as the digital economy and the sharing economy. Accommodative and prudential regulation over new industries and new forms of business was further improved, allowing for the emergence of a stream of new hot innovations such as smart retail and capacity sharing. The online retail sales of goods grew by 25.4%, accounting for 18.4% of total retail sales of consumer goods, an increase of 3.4 percentage points from the previous year. We accelerated the building of eight national comprehensive experimental zones for big data in the Beijing-Tianjin-Hebei region, Guizhou, and other areas.
4) The military-civilian integration strategy was implemented to good effect.
Construction began on demonstration zones to promote innovation in military-civilian integration (MCI). Key special MCI projects on science and technology and the platform for military-civilian collaborative innovation in science and technology were launched. Smooth progress was made in major MCI demonstration projects, and strong steps were taken to develop the national MCI information platform. The national MCI industrial investment fund for defense-related science, technology, and industry was put into operation, along with the national-level MCI industrial investment fund. We also broadened investment and financing channels for military-civilian integration, by offering support for qualified MCI enterprises to issue corporate bonds. The third China Dual-Use Technology and Application Contest and the fourth Exhibition of MCI High-Tech Equipment Outcomes were successfully held.
5. We pursued deeper reform and greater opening up and unlocked more drivers of economic and social development.
Reform of the State Council's institutions progressed as per the arrangements in the Plan on Deepening Reform of Party and State Institutions. A vast array of activities were held to celebrate the 40th anniversary of China's reform and opening up, and a host of major measures to promote reform and opening up were implemented.
1) The business environment consistently improved.
Reforms to streamline administration, delegate powers, improve regulation, and upgrade services continued apace. Fully implementing the Negative List for Market Access, we issued the 2018 version, and took steps to ensure industries, sectors, and commercial activities not on the list could be fairly accessed by all types of market entities in accordance with law. We also abolished a number of items subject to administrative approval including those for automobile investment projects. The time taken to set up a business has been dramatically shortened to within 8.5 working days in cities at and above sub-provincial level and provincial capitals.
The reform separating out the business license from certificates required for starting a business was rolled out nationwide, and the national reform to merge 24 types of certification into one certificate was fully implemented. Reform of the industrial production licensing system picked up speed, and the number of product categories has been cut from 38 to 24. Trial reforms on the approval system for construction projects were started in Beijing and 14 other cities, as well as in Zhejiang Province. In the World Bank's Ease of Doing Business ranking (2019), China jumped from 78th to 46th place. We also piloted a business environment evaluation suited to China's conditions in 22 cities, marking the first step toward establishing China's own business environment evaluation system.
Progress was made in promoting the oversight model using randomly selected inspectors to inspect randomly selected entities and requiring the prompt release of results, and full coverage of daily oversight in market regulation was basically realized. We continued building the social credit system. We introduced targeted measures in 19 key sectors against acts in bad faith, including telecom fraud, tax evasion, and tax fraud. The mechanisms of joint incentives for acts of good faith and joint punishment for acts of bad faith produced initial results.
We launched reforms to see that people need only log in to one website or visit one place and make one trip to access a government service. We formulated lists of responsibilities on data sharing for departments under the State Council, and basically established a national unified system of platforms for sharing and exchanging data. This system has so far facilitated data exchanges of 36 billion in number. We worked hard to provide more convenient approval services, and made solid progress in the "less certificates, more convenience" initiative and the campaign to free up 100 bottlenecks preventing people from accessing government services.
2) Reform of state capital and SOEs picked up pace.
The reform to introduce mixed ownership to SOEs moved forward in an active and steady manner. We issued the policies for deepening pilot reforms on mixed ownership, and carried out pilot mixed-ownership reforms sequentially in 50 SOEs in three groups, yielding important results. The Guidelines on Reforming the Salary-Setting Mechanism for SOEs and the Guidelines on Promoting Pilot Reforms in State Capital Investment and Management Companies were published. A system anchored by the Guidelines on Deepening Reform of SOEs as well as other supplementary policies was put in place. The Guidelines on Strengthening Constraints on SOEs' Debt-to-Asset Ratios were promulgated, marking the initial step in setting up a constraint mechanism for SOEs' debt-to-asset ratios. The modern SOE system with Chinese characteristics was further improved, and faster progress was made in establishing a corporate governance structure with effective checks and balances and flexible and efficient market-based operating mechanisms.
3) The private sector received stronger support.
We strengthened the protection of property rights and intellectual property rights (IPR). We set up a robust mechanism to ensure coordinated property rights protection, conducted a review of all regulations and normative documents relating to property rights protection, and carried out extensive campaigns to address failures within government institutions to act in good faith in this area. The Plan for the Internet Plus IPR Protection was unveiled. In line with our efforts to promote entrepreneurship, we repealed the Provisional Regulations for Private Enterprises. We worked to improve the transmission mechanism of monetary policy, and encouraged financial institutions to provide more credit to the real economy and to manufacturing firms, private enterprises, and small and micro businesses in particular. We set up instruments to support private enterprises in debt financing and help them find market-based solutions to financing problems.
4) The reform of the fiscal, tax, and financial systems registered steady progress.
We continued reforms to divide fiscal powers and expenditure responsibilities between central and local governments on a sector by sector basis, and made consistent improvements to performance-based budgetary management. In the area of tax, further progress was made in VAT reform. We revised the Law on Individual Income Tax and its implementation regulations, raised the income tax threshold, introduced six special deductible items, and improved the structure of tax rates. The environmental protection tax came into force.
We published policies on improving regulation of systemically important financial institutions, on strengthening oversight over nonfinancial firms' investment in financial institutions, and on improving the management of state-owned financial capital. The orderly development of private banks was promoted, with approval being granted for the establishment of 17 private banks.
5) The Belt and Road Initiative made new advances.
A symposium was held to mark the fifth anniversary of the Belt and Road Initiative (BRI). During the symposium the BRI's future trajectory was outlined with a view to ensuring it continues building momentum and producing concrete outcomes. Focusing on key areas and key countries, we worked to build on the collective desire for cooperation and promoted the coordination of development plans. To date, a total of 171 inter-governmental cooperation documents have been signed with over 150 countries and international organizations.
We steadily increased international industrial-capacity cooperation. The positive effect of industrial concentration in overseas economic and trade cooperation zones was much more noticeable, and third-market cooperation documents were signed with over ten countries, including France, Japan, and Singapore. There was substantial progress in key BRI projects like the China-Laos and China-Thailand rail lines and the China-UAE Industrial Park. Construction is fully underway on the Jakarta-Bandung high-speed line and making smooth progress on key port projects like Gwadar in Pakistan. We made important improvements to the quality and efficiency of the China-Europe freight train services. The services have so far registered over 13,000 trips, and have seen a 20-percentage-point increase in the number of return journeys to China. Marked progress was made in aviation connectivity among BRI countries, with the opening of 106 new air routes.
The BRI International Science Organizations Alliance was established to promote collaboration on building technology transfer platforms between China and ASEAN, Arab states, and countries in south Asia, central Asia, and central and eastern Europe, and to co-establish science and technology parks with the Philippines, Indonesia, and six other countries. We successfully hosted the Beijing Summit of the Forum on China-Africa Cooperation, which produced many positive outcomes. Work on the Digital Silk Road progressed steadily with the signing of cooperation MOUs with 16 countries, and faster moves were made to promote Silk Road E-Commerce across the globe with the signing of cooperation agreements with 17 countries.
6) China made solid progress in developing as a trader of quality.
We successfully hosted the first China International Import Expo, an event which has shown to the world China's determination to continue opening its market and promote economic globalization. We stepped up negotiations on the Regional Comprehensive Economic Partnership, signed an upgraded free trade agreement (FTA) with Singapore, and completed FTA negotiations with Mauritius. With this, China has further strengthened its bilateral and multilateral economic and trade cooperation, and signed a total of 17 FTAs with 25 countries and regions.
We adopted 53 measures to deepen reform and promote innovation in pilot free trade zones, and applied 30 practices developed from trial reforms in pilot free trade zones across the country. We began work on building China (Hainan) Pilot Free Trade Zone, and carried out exploratory work on setting up free trade ports with Chinese features. We built more integrated experimental zones for cross-border e-commerce, improved retail import supervision and taxation policies on cross-border e-commerce, and expanded the scope of trials on market procurement trade. These steps have helped support the vigorous development of new forms and models of trade such as cross-border e-commerce and market procurement trade. We lowered China's overall tariff level from 9.8% to 7.5% and worked to balance China's foreign trade by actively expanding imports. The diversity of China's market grew continuously. The total value of imported and exported goods for the year stood at 30.51 trillion yuan, an increase of 9.7%.
7) The foreign investment environment was continuously improved.
Restrictions on market access were relaxed across the board. Two editions of the 2018 negative list for foreign investment were published, one for the whole country and the other for pilot free trade zones. The number of special administrative measures applying in each case has been reduced to 48 and 45 respectively. Steady progress was made in opening up the financial sector. We instituted a nationwide policy of allowing foreign-invested enterprises to complete business filing procedures and business registration in one go. We took active steps to promote equal treatment of domestic and foreign enterprises in terms of industrial policy, science and technology policy, government procurement, license applications, and standards-setting. Reform and innovation-driven development in development zones were stepped up, and the business environment for foreign investors continued to improve. China attracted around US$ 135 billion in foreign direct investment over the year, an increase of 3%.
8) Development of outward investment was steady and orderly.
The Management Provisions for Outward Investment by Enterprises and the Interim Measures for Reporting on the Registration (Approval) of Outward Investment were put into force. We enhanced unified supervision over outward investment at all stages and further improved the sectorial composition of outward investments, with the bulk flowing into leasing, business services, and manufacturing. To enhance the awareness of enterprises about compliance, we published the Guide on Compliance Management for Enterprises' Overseas Operations. We provided guidance to see the sound development of outward investment and financing funds, thus expanding the channels through which enterprises can seek financing for their "go-global" efforts. Non-financial outward direct investment reached US$ 120.5 billion in 2018.
6. We put strong focus on implementing the rural revitalization strategy and moved faster to foster new growth drivers for agricultural and rural development.
The Strategic Plan for Rural Revitalization (2018-2022) was issued for implementation. A total of 28 provinces (autonomous regions and municipalities) have already published complimentary plans. In addition, plans for all others have been basically completed, and work on rolling separate village development plans into one single plan has continued. The institutional framework and policy system for rural revitalization have been gradually established and all major work planned for the current stage has begun.
1) The foundations of agriculture grew stronger.
Total grain output exceeded 650 million metric tons. Efficient water-saving irrigation methods were newly applied to 1.44 million hectares of land. The area of high-standard cropland was increased by over 5.33 million hectares. We have established functional zones for grain production and protective areas for the production of major agricultural products on an area of over 60 million hectares. We stepped up the initiative to upgrade the modern seed industry, ensured high standards were adopted in the building of the Nanfan National Seed Breeding Base, and sped up construction on seed and seedling breeding bases for grain and oil-bearing crops, vegetables, and fruits.
Work has begun on 133 of 172 planned major water conservancy projects, with the total investment in ongoing projects exceeding 1 trillion yuan. A total of 15.6 million hectares of land were afforested throughout the year. The Year of Agricultural Quality campaign was carried out to spur agricultural development by raising quality standards, promoting green development, and building strong brands. The percentage of major agricultural products that passed quality and safety tests remained above 97%, and the use of chemical fertilizers and pesticides both decreased.
2) Development of the primary, secondary, and tertiary industries was much more integrated in rural areas.
A total of 100 demonstration parks for rural industry integration have so far been certified, and work started on building 62 modern agricultural industrial parks and 254 towns with agricultural strengths. We continued promoting complete mechanization of the production process for major crops. We also concentrated on developing intelligent agriculture, boosting the levels of digitization in agricultural production, operations, management, and services. New industries and new forms of business in rural areas enjoyed rapid development.
3) Agricultural and rural reforms registered steady progress.
We made improvements to the policy on setting minimum purchase prices for wheat and rice and to the mechanism for combining market-based purchases with government subsidies for corn and soybeans. Well-planned steps were taken to push forward with trial reforms on rural land requisition, the marketization of rural collective land designated for business-related construction, and the system for rural land designated for housing. We stepped up work to determine, register, and certify rural home land rights and rural housing property rights, and basically completed the work to determine, register, and certify contracted rural land rights. Rights on 986.7 million hectares of contracted land have been certified, exceeding the cadastral area covered during the second round of household land contracting in rural areas. We have set up robust mechanisms for former rural residents who now hold urban residency to protect their rights on contracted rural land, use rights on rural land designated for housing, and rights to share in the proceeds from rural collective undertakings, as well as their entitlement to voluntarily transfer these rights in return for compensation. The third batch of trials to reform the rural collective property rights system began in 150 counties in 50 prefectures and cities and in 3 provinces. To date this reform has been completed by over 150,000 rural collectives nationwide and has involved more than 200 million people. Reform of collective forest tenure was furthered.
4) Work on building a beautiful and livable countryside picked up pace.
The three-year campaign to improve rural living environments got underway across the country. We steadily moved forward pilot demonstration programs to comprehensively address serious environmental problems and demonstrations to treat household wastewater in rural areas. The project to manage household refuse was extended to more rural areas and the Toilet Revolution was actively carried forward. We stepped up efforts to consolidate and build on the progress made in providing safe drinking water, and increased the availability of tap water in rural areas. More rural roads were built. We successfully concluded the projects to provide power to all electric pump sets on rural flatlands, to upgrade power grids in small towns and hub villages, and to provide three-phase power to poor villages. We carried out trials of providing universal telecommunications services and demonstration projects to extend broadband connectivity, and particularly to install 100M fiber optic networks in rural areas, and moved faster to build next-generation information infrastructure there. The orderly development of multipurpose cultural service centers in rural areas continued.
7. We took holistic steps to promote coordinated regional development and saw further improvements in spatial development patterns.
We gave play to the comparative advantages of different regions, worked on narrowing regional development disparities, and focused on promoting new urbanization. Stronger levels of coordination, connectivity, and integration were achieved in development between regions.
1) Further strides were made in promoting coordinated regional development.
The Guidelines on Establishing More Effective New Mechanisms for Coordinated Regional Development were released. To promote further development and opening up in the western region, we launched 28 major projects in transportation, energy, and other fields with a total investment of 482.5 billion yuan. In the northeast, breakthroughs were made in improving the business environment, developing the private sector, and promoting cooperative partnerships with the eastern region; steady progress was made in the transformation of old industrial cities and resource-dependent areas; efforts were continued to rebuild or relocate old industrial districts within cities and independent industrial and mining areas and to implement comprehensive solutions in areas affected by mining-induced subsidence. In the central region, we moved faster to achieve a rational distribution of advanced manufacturing, and began to implement development plans for the Han and Huai river eco-economic belts and the general plan for industrial relocation demonstration zones in southern and western Hunan. The eastern region moved faster to foster and strengthen new growth drivers; in Shandong, work began on a comprehensive experimental zone for replacing old growth drivers with new ones.
Old revolutionary base areas, areas with large ethnic minority populations, border areas, and poor areas all recorded faster development, achieving solid progress in constructing major infrastructure such as transportation, water conservancy, energy, communications, and logistics facilities. We scaled up one-to-one assistance programs, and further improved economic and social policies and measures in Xinjiang, Tibet, and the Tibetan ethnic areas in Sichuan, Yunnan, Gansu, and Qinghai provinces.
We took faster steps toward building China into a strong maritime country, with construction beginning on demonstration zones for developing the marine economy. Many functional platforms, such as state-level new areas, airport economy demonstration zones, and experimental zones for integrated, complete reform, strengthened their ability to demonstrate and offer guidance on reform practices. Steady progress was made in the construction of experimental zones for development and opening up in major border areas, giving rise to a set of practices applicable to other areas.
2) Strong progress was recorded in implementing major regional development strategies.
With the focus on relieving Beijing of functions nonessential to its role as the capital, we made marked progress in promoting the coordinated development of the Beijing-Tianjin-Hebei region. The Plan for Xiongan New Area in Hebei, the Guidelines on Supporting Xiongan New Area in Comprehensively Deepening Reform and Opening up, and the General Plan for Xiongan New Area in Hebei (2018-2035) were unveiled for implementation. We sped up the development of the administrative center of Beijing Municipality, began construction on the Beijing-Xiongan Intercity Railway, and made progress on all fronts in building Beijing Daxing International Airport and preparing for its operation.
On the Yangtze Economic Belt, the pattern of close coordination on environmental protection was consolidated. We began formulating a territorial space plan, and made solid progress in employing the three-fold approach of controlling water pollution, restoring water ecosystems, and conserving water resources and in addressing four kinds of behaviors detrimental to environmental protection on rivers and lakes. Rectification work was completed on 1,361 illegal wharves, and the cross-section water quality of the main stream of the Yangtze River improved significantly. Work on the integrated multidimensional transportation corridor was stepped up. We made good progress in planning and building a high-speed railway along the Yangtze River, accelerating work on the unfinished sections of inter-provincial expressways, constructing a deepwater channel on the Yangtze, and installing combined rail-water transportation facilities at ports along its main channel.
We unveiled the Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area, and initiated major construction projects across the board. The Hong Kong-Zhuhai-Macao Bridge was officially opened to traffic. Policies and measures to make it easier for Hong Kong and Macao residents to pursue development on the mainland came into effect and are producing positive results.
We implemented the Guidelines on Supporting Hainan in Comprehensively Deepening Reform and Opening Up. Work began on drawing up a plan for integrated regional development of the Yangtze River Delta.
3) The quality of new urbanization was enhanced.
Rural household registration holders living in urban areas can now obtain permanent urban residency with greater ease. Permanent residency policies continued to be loosened in large and medium-sized cities, and the residence card system was basically implemented in all cities. The percentage of permanent urban residents reached 59.58%, while the percentage of registered urban residents reached 43.37%, 1.06 and 1.02 percentage points above the figures at year-end 2017 respectively. A group of plans for trans-provincial city clusters were published, city clusters throughout the country showed strong development, and modern metropolitan areas grew rapidly.
8. We focused on ensuring and improving the people's wellbeing and saw they enjoyed more of the fruits of development in a fairer way.
Upholding our vision of people-centered development, we pushed for detailed and effective implementation of a whole raft of initiatives aimed at benefiting the people and addressing prominent problems of public concern.
1) Well-planned steps were taken to keep employment stable.
The Guidelines on Promoting Employment for the Present and Coming Period and the Guidelines on Implementing the Life-Long Vocational Skills Training System were promulgated. We enhanced public employment and business startup services, stepped up support for enterprises to keep employment stable, and continued the pilot projects to support rural migrant workers and others returning home to set up businesses. Programs to guide college graduates in finding jobs and starting businesses also continued. We formulated and unveiled the Guidelines on Providing Extensive Public Employment Services, and made impressive strides in instituting the Internet Plus Public Employment Services model. We introduced the Provisional Regulations on Human Resource Markets, thus opening the way for the gradual establishment of a robust HR market system.
2) Improvements were made to the social security system on a continuing basis.
The central regulation system for enterprise employees' basic old-age insurance funds formally came into operation. Mechanisms were established to set standards on benefits for rural and non-working urban residents under the basic old-age insurance scheme and to allow for regular adjustment of their basic pension benefits. Steady strides were made in bringing the tasks of collecting and managing social insurance premiums under the remit of a single agency, and regulation in this area was further improved. We continued to make progress in aligning basic medical insurance schemes for rural residents and non-working urban residents. In total, more than 942 million people are now covered by basic old-age insurance schemes, and over 1.344 billion people are covered by basic medical insurance plans.
We improved the national platform for trans-provincial settlement of medical bills through basic medical insurance accounts. We have ensured there are hospitals designated for trans-provincial settlement in all county-level administrative areas, and have seen that rural migrant workers and other workers and business owners without local residency have been incorporated into the platform. The total number of trans-provincial on-the-spot settlements has reached 1.526 million.
Smooth progress was made in the pilot program in integrating maternity insurance and basic medical insurance for urban workers. Unemployment insurance functioned more effectively in terms of ensuring basic living standards, preventing job losses, and promoting employment. Improvements were made to the policies regarding rural migrant workers' participation in workers' compensation schemes. The subsistence allowance system continued to improve as we achieved full coverage for urban and rural residents and ensured continuous improvements in allowance standards.
More was done to assist demobilized military personnel in finding employment, and living allowances were raised for demobilized personnel with illness, for war and nuclear-test veterans, and for other entitled groups. The social welfare services system was strengthened, and trials for integrated reforms in social assistance were pushed forward. Steady progress was made in the construction of government-subsidized housing in urban areas, and renovations began on 6.26 million units of housing in run-down urban areas, and an additional 1 million units of public-rented housing were allocated. The housing rental market developed rapidly in large and medium-sized cities. A total of 1.9 million dilapidated houses in rural areas were renovated.
3) Development of a system of standards for basic public services progressed quickly.
The Guidelines on Establishing a Sound System of Standards for Basic Public Services were unveiled, and all provincial-level governments released basic public service lists. Strong progress was made in the five major public service categories of modernizing education, ensuring a healthy population, elevating culture and tourism, promoting fitness among the public, and providing social services for groups that are most in need.
The retention rate of nine-year compulsory education hit 94.2%, and the gross enrollment ratio for senior secondary education reached 88.8%. Government spending on education as a percentage of GDP remained above 4%.
We made rapid progress in developing the Internet Plus Medical and Healthcare model, and stepped up the comprehensive public hospital reform. The national system of essential medicines was improved. Trials for centralizing the procurement and use of medicines made steady progress, and the time it takes to assess and approve new drugs coming into the Chinese market was cut. A zero-tariff policy was applied to all imported cancer treatment drugs, while 17 types of cancer treatment drugs were made available at much lower prices and their costs can now be reimbursed through medical insurance. More measures were quickly taken to address problems pertaining to the safety of vaccines and medicines. The number of beds in medical and healthcare institutions is predicted to have reached 6.05 per 1,000 people.
The Guidelines on the Reform to Better Protect Cultural Relics and Put Them to Better Use were published, and the protection for cultural heritage of all types markedly improved. The Plan for Protecting, Passing On, and Utilizing Grand Canal Culture was drawn up. We continued working to offer free access to more public cultural facilities, unveiled an implementation plan for the initiative to build one million kilometers of fitness walkways, and opened 82,000 new sports venues.
We strengthened social security programs to meet basic needs. A total of 9.4 million people with disabilities facing financial difficulties received living allowances, and 11.64 million people with serious disabilities received nursing care subsidies. Around 398,000 children benefited from the subsistence allowance system for orphans, and medical rehabilitation services were provided to orphaned children with disabilities around the country. Better pre- and post-natal care services were ensured, and the support and care system for women was improved. The public legal service system also continued to improve. A total of 15.23 million babies were born in 2018, bringing the total population at year end to 1.395 billion. The natural population growth rate was 3.81‰.
Overall, the main targets and tasks in economic and social development for 2018 were well accomplished. We got off to a good start in the critical battles against potential risk, poverty, and pollution, continued driving forward supply-side structural reform, and elevated the intensity of reform and opening up. Living standards continued rising; economic development was kept on a stable, sound track; overall social stability was maintained, and we took fresh strides toward completing the building of a moderately prosperous society in all respects.
Given the extreme complexity of the domestic and international contexts, these achievements were not easily attained, and it is important to fully recognize their value. They are the result of the guiding principles and strategies, well-crafted plans and arrangements, and strong leadership provided by the Party Central Committee with Comrade Xi Jinping at its core; the result of the overall vision, sound guidance, and successful practices offered by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; and the result of the strong unity, firmness of purpose, and pragmatic and persistent efforts of the Party and the Chinese people of all ethnic groups.
From an economic and social development standpoint, the major indicators, such as economic growth, employment, the CPI, and the balance of payments, all remained within an appropriate range in 2018, while there were further improvements for indicators that reflect the quality of development, such as innovation capacity, resource conservation, environmental protection, and social security.
Of the 19 indicators with obligatory annual targets, 18 met their targets, while there was a discrepancy between the projected target for water consumption per 10,000 yuan of GDP and the actual performance. The target for 2018 was a 5.2% decrease; however, according to preliminary statistics, the actual decrease was 5.1%, 0.1 percentage point lower than the targeted figure. The main reasons for this are as follows: Due to a drop in annual precipitation in 2018, China's total surface water resources decreased by 80 billion cubic meters, and more water was drawn from rivers used for agricultural irrigation in some drought-affected regions. As water ecosystems in northern China were replenished with water from the South-to-North Water Diversion Project, China's water consumption for ecological purposes increased significantly compared with 2017. All these factors resulted in the above 0.1-percentage-point discrepancy.
Out of the 46 indicators with anticipatory targets, 44 either met or surpassed targets. The actual growth of aggregate financing in the economy and per capita disposable income of urban residents fell somewhat short of the targets.
The growth of aggregate financing for 2018 was targeted to be roughly in line with the previous year's actual growth rate. With growth in real terms of 13.4% at the end of 2017, the 9.8% figure at the end of 2018 was short of expectations. The reasons for this are as follows: To create a favorable monetary and financial environment for supply-side structural reform, we took measures to regulate the hidden debts of local governments and to appropriately control the flow of funds to the real estate sector, to enterprises that failed environmental impact assessments, and to industries with overcapacity. We also sought to prevent funds from being diverted out of the real economy and from circulating solely within the financial sector. At the same time, we continued ensuring stable financing support for the real economy. The growth of aggregate financing for the year fell short of the anticipatory target, but it was still basically in keeping with GDP growth in nominal terms.
Urban per capita disposable income in 2018 was targeted to stay largely in step with economic growth. GDP growth in 2018 was 6.6%, and urban per capita disposable income increased by 5.6% in real terms, lower than the anticipatory target. This can be attributed to the increasing downward pressure on the economy, more difficulties in the real economy, especially for small and micro enterprises, a decline in the profits of enterprises in some sectors, and slower growth of salary-based incomes.
Recognizing our achievements, we are also keenly aware that although the performance of the economy is stable and improving, this stability is punctuated by changes, some of which give cause for concern.
From an international standpoint, we are facing major changes that are deepening and evolving at a faster pace, and the sources of disruption and risk are increasing. These factors make for a complicated and grave external environment for China. Continued recovery of the global economy can be expected. But protectionism and unilateralism are intensifying, the spillover effects of monetary policy adjustments by major developed economies are becoming more evident, and some emerging economies are facing greater risks. The prices of major commodities are fluctuating sharply, geopolitical risks are building, and world economic and trade growth are slackening.
Domestically, there are also unfavorable factors. First, China's economy still faces downward pressure. Slowing domestic demand growth is making it harder to sustain steady investment growth in the three major areas of infrastructure, manufacturing, and real estate development. We also face challenges in ensuring steady growth in consumer spending due to the many difficulties in increasing personal income, and softer growth in traditional forms of consumption like purchases of automobiles.
Second, the foundation of agriculture and rural infrastructure remain weak. The level of agricultural technologies needs to be improved, basic public services and infrastructure construction lag behind in rural areas, and broader channels need to be developed for rural residents to increase their incomes.
Third, the real economy faces mounting difficulties. Private companies are still finding it both tough and expensive to access financing, particularly small and micro companies. There is also some reluctance to lend to private companies and there are cases of loans being withheld, withdrawn, or cancelled. Enterprise profits are being squeezed by the rising costs of energy, raw materials, labor, and land use. The business environment requires further improvement. Flaws still exist in the market mechanisms for ensuring fair competition, more protection is needed for property and intellectual property rights, and there is still work to be done in building a new type of cordial and clean relationship between government and business.
Fourth, points of weakness affecting high-quality development need to be addressed. We produce a low number of major original scientific and technological outputs, rely too much on others for key and core technologies in certain fields, and perform poorly in putting scientific and technological achievements into practical application. Our industrial structure needs further improvement, and stronger growth drivers need to be fostered. In certain localities, energy and resource constraints are tightening and ecological and environmental problems are still grave.
Fifth, regional disparities continue to grow. Some localities in the central and western regions face grave difficulties in making structural adjustments, while other areas do not hold enough appeal to keep factors of production, leading to a serious outflow of talent and other high-quality factors. These issues have the potential to exacerbate the development problems of these areas.
Sixth, potential risks in key areas are grave. External uncertainties have the potential to intensify the inflow of risks into China through trade, cross-border capital flows, and commodity markets. Meanwhile, risks at home in the stock, bond, and foreign exchange markets, in internet finance, and in real estate cannot be overlooked.
Seventh, there are many problems and challenges affecting the people's wellbeing. Structural employment problems have emerged in some provinces, and the factors hindering personal income growth are increasing. There is insufficient supply in education, healthcare, elderly, and other public services, and the problem of population aging is becoming more serious.
Shortcomings can also be identified in our own work. Some of our policies are not as forward-looking, targeted, or effective as they need to be, and they fail to fully take into account the adjustments they impose on enterprises. Coordination between some government departments needs to be strengthened to ensure effective implementation of reform measures and policies and to see that special plans and projects are launched promptly. And some localities tend to implement policies in an oversimplified or one-size-fits-all fashion.
These are issues that we must take very seriously. In responding to them, we will raise our awareness of potential dangers, remain mindful of worst-case scenarios, focus on prominent problems, and take targeted measures that deliver solutions and effectively prevent risks from coalescing into chain reactions and causing ripple effects. We will respond to the change in the principal contradiction in Chinese society and take full advantage of the important period of strategic opportunity for China's development. We will maintain strategic focus, firm up our confidence of success, and turn challenges into opportunities and pressure into motivation, in order to spur high-quality economic development.
II. General Requirements, Main Targets, and Policy Direction for Economic and Social Development in 2019
The year 2019 marks the 70th anniversary of the founding of the People's Republic of China, and it is a crucial year for bringing the building of a moderately prosperous society in all respects to a successful completion and thus realizing our first Centenary Goal. Therefore it is of great importance that we accomplish all economic and social development work for the year.
1. General Requirements
In 2019, we must follow the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We must fully implement the guiding principles from the 19th CPC National Congress and the second and third plenary sessions of the 19th Party Central Committee, and coordinate efforts to pursue the five-sphere integrated plan and the four-pronged comprehensive strategy.
We must stay committed to the general principle of pursuing progress while ensuring stability, to the new development philosophy, and to promoting high-quality development. Keeping supply-side structural reform as our main task, we must deepen market-based reforms, expand high-standard opening up, and speed up our efforts to develop a modernized economy.
We need to ensure continued success in the critical battles against potential risk, poverty, and pollution and, with strong moves, unlock the vitality of our micro entities. We need to develop new and improved approaches to macro regulation, and take coordinated steps to achieve steady growth, advance reform, make structural adjustments, improve living standards, guard against risk, and ensure stability. We must keep major economic indicators within an appropriate range and work to ensure stability in employment, financial operations, foreign trade, foreign investment, domestic investment, and expectations.
We need to bolster market confidence, see that our people feel more satisfied, happier, and more secure, and ensure sustained, healthy economic development and overall social stability. In meeting these requirements, we will lay a decisive foundation for completing the building of a moderately prosperous society in all respects and celebrate the 70th anniversary of the founding of the People's Republic of China with outstanding achievements.
In undertaking specific work, we must keep firmly in mind the guiding principles from the Central Economic Work Conference, grasp the significance of the current important period of strategic opportunity, and remain committed to the following five missions:
First, pursuing supply-side structural reform as our main task. We need to implement more reforms and employ more approaches consistent with market principles and the rule of law. We must work hard to consolidate the gains made in the five priority tasks, to strengthen the dynamism of micro entities, to upgrade industrial chains, and to ensure unimpeded flows in the economy. These efforts would help boost the quality of our supply systems.
Second, promoting high-quality development. We should employ a complete set of indicators to provide guidance on high-quality development, move faster to develop a modernized economy, step up implementation of the innovation-driven development strategy, and extensively promote military-civilian integration. We will take concrete steps to ensure policies get implemented, and commit to persistent efforts to boost the resilience of development.
Third, developing a strong domestic market. Responding to the change in the principal contradiction facing Chinese society, we should strive for strong progress in high-quality development and deepen supply-side structural reform to keep unlocking and meeting demand in the domestic market. We also need to increase the potential for development over the medium- and long-term to promote healthy and sustainable economic development.
Fourth, fighting the battles against potential risk, poverty, and pollution. Staying focused on the overall objective of finishing building a moderately prosperous society in all respects, we need to be prepared for worst-case scenarios, identify key problems, adopt targeted policies, and tackle major difficulties to ensure all tasks are accomplished on schedule and bring a stronger sense of fulfillment to our people.
Fifth, furthering market-based reforms and expanding high-standard opening up. We need to devise a series of reform and opening up measures that are good for the near term and even better in the long run. We need to work on boosting the vitality of market entities and give full play to the enthusiasm, initiative, and creativity of all sectors of society.
While fulfilling the above missions, we also need to properly balance the following three relationships.
The first relationship is that between domestic and international imperatives. We should put a strong emphasis on responding to changes in the external environment, but more importantly, we need to focus on domestic development. We need to face challenges squarely, skillfully turn risks into opportunities, and put our own house in order by solving longstanding institutional and structural problems in a prudent and systematic fashion. The second is that between maintaining steady growth and preventing risks. We need to address challenges and defuse risks while working to keep growth steady and promote high-quality development. We need to maintain the continuity and stability of our macro policies, keep the right pace and intensity in preventing risks, and avoid the building of cumulative effects that are detrimental to keeping expectations stable, maintaining steady growth, and making structural adjustments, to ensure the economy operates within an appropriate range. The third is that between the government and the market. We need to make more use of reform and innovation to ensure the market plays the decisive role in allocating resources and the government better fulfills its role. While keeping macro policies more stable and effective, we need to further energize micro entities and boost the internal forces driving economic growth.
2. Main Targets
Keeping in mind the above general requirements and considerations, we have set the following targets for economic and social development for 2019 on the basis of what is necessary and what is possible.
Economic growth within an appropriate range
The projected target for GDP growth is 6%-6.5%. In making this projection, we have taken the following into account. First, taking a pragmatic approach, we have made a moderate adjustment to our projection on the basis of a thorough assessment of destabilizing factors and uncertainties affecting the economic performance. Further, taking account of seasonal fluctuations in economic growth, we have adopted a range-based projection to increase elasticity. Second, we need to maintain an appropriate pace of growth to meet the needs for job creation and provide the necessary macro environment for promoting high-quality development, advancing supply-side structural reform, and progressing the three critical battles. This projection also helps keep market expectations stable. Third, this target is consistent with the growth potential of the Chinese economy at present as well as our growth forecasts for the primary, secondary, and tertiary industries. Steady increases in all three industries would ensure a strong underpinning for a medium-high growth rate.
Consistent improvements in the quality and effect of development
We will work hard to build on the progress made in the five priority tasks and keep the macro leverage ratio basically stable and fiscal and financial risks under control. We have set the following targets: Per capita labor productivity will grow by 6.3%, the contribution of scientific and technological advances to economic growth will reach 59.2%, and R&D spending as a percentage of GDP will rise to 2.2%. The urban population will account for 60.6% of the total as measured by permanent urban residents and 44.4% as measured by registered urban residents.
The environment will see further improvements. PM2.5 concentrations will drop by 2% in cities at and above prefecture level that fell short of the national PM2.5 standards, energy consumption per unit of GDP will decrease by about 3%, carbon dioxide emissions per unit of GDP will fall by about 3.6%, and emissions of major pollutants will continue to decline. Increases in urban and rural personal income will be basically on par with economic growth, the social safety net will cover more people, and access to educational, health, cultural, elderly care, and other basic public services will be made more equitable.
In giving greater weight to these indicators, which reflect the quality and effect of growth and the structural adjustments of the economy, we want to primarily ensure that we are acting on the new development philosophy, putting the vision of people-centered development into practice, and following the principle of giving priority to the quality and effect of growth. These steps will ensure high-quality development is more evident in areas like supply and demand, inputs and outputs, income distribution, and the macroeconomic cycle, and that people enjoy a stronger sense of satisfaction and happiness.
Overall stability in employment
This year's target for urban job creation is above 11 million, and the targets for the survey-based and registered urban unemployment rates are about 5.5% and below 4.5%, respectively. The target for urban job creation takes into account new entrants to the workforce in 2019, and allows leeway for arrangements to be made for workers displaced due to overcapacity cuts, workers returning to the workforce after unemployment, and rural residents moving into nonfarm jobs. Given our economic fundamentals and the capacity of economic growth to create jobs, GDP growth of 6%-6.5% should enable us to achieve this year's employment target. Regarding the jobless rate, the survey-based target of about 5.5% takes account of the impact of uncertainties in the international economic environment on imports and exports and the increase in the number of college graduates this year. This target is also a reflection of our determination to keep employment stable and our policy orientation toward prioritizing employment and bolstering job security. The registered urban unemployment rate has held steady around 4% in recent years. In setting the target at below 4.5% this year, we have made allowances for seasonal data fluctuations. However, we will strive for better results over the year to keep the jobless rate at a relatively low level.
Basic stability in the overall level of prices
The CPI is projected to rise by about 3%. This target takes the following into account. The carryover effect from last year's CPI increase is expected to be 0.7 percentage point. Under the influence of new factors, such as African swine fever, food prices may rise; the upward trend in service prices may persist, and the possibility of rising prices for imported commodities also remains.
A basic equilibrium in the balance of payments
For imports and exports, we have set a target of ensuring stability while improving quality. This target takes the following into consideration. In terms of what is necessary, as risks and challenges increase, a basic equilibrium in the balance of payments and a reasonable level of foreign exchange reserves will help ensure economic and financial stability and keep market expectations stable. In terms of what is possible, we believe that the predicted continuation of global economic and trade growth and China's hosting of the second Belt and Road Forum for International Cooperation and the second China International Import Expo can help achieve a steady increase in imports and exports. We will also promote improvements in the composition and quality of trade, under the condition that the overall state of foreign trade remains stable and with consideration to the impact of unilateralism and trade protectionism on China's imports and exports, particularly the uncertainties arising from economic and trade frictions between China and the United States.
3. Main Policy Direction
In macro policy, we will strengthen counter-cyclical regulation, continue to implement a proactive fiscal policy and prudent monetary policy, and carry out anticipatory adjustments and fine-tuning as appropriate. In structural policy, we will strengthen institution building and look to reform to drive development, pushing for deeper reforms in state capital, SOE, fiscal, tax, and financial systems, land, market access, and social management. In social policy, we will guarantee the provision of social services to those most in need, implement a jobs first policy, ensure people's basic needs are met, and strengthen management in service delivery.
Implementing a stronger and more effective proactive fiscal policy
The debt-to-GDP ratio for the year is projected to be 2.8%, which is 0.2 percentage point higher than the projection last year. The government deficit is set at 2.76 trillion yuan, 380 billion yuan more than last year's budgeted figure. Furthermore, we will considerably scale up special bonds for local governments. We will impose broader cuts on taxes and fees, deepen VAT reform, substantially lower VAT rates, fully implement the revised Law on Individual Income Tax and regulations on its implementation, and markedly reduce the burden of social insurance contributions on enterprises.
We will adjust and improve the composition of government expenditures. General expenditures will be cut by over 5%, and spending on official overseas visits, official vehicles, and official hospitality will be cut by another 3%, while funding for key expenditures will be guaranteed. Government funds will be leveraged to strengthen points of weakness in a targeted way and to provide a safety net for those most in need, with more funding for poverty alleviation, agriculture, rural areas, and rural residents, and for structural adjustments, scientific and technological innovation, ecological conservation and environmental protection, and people's wellbeing. Giving better play to transfer payments, we will continue the large-scale increases in transfer payments to local governments, and reform and improve the mechanisms for ensuring basic funding for county-level governments to see that poor areas and local governments are better able to meet people's basic living needs.
Implementing a prudent monetary policy with an appropriate level of intensity
Aggregate financing and the M2 money supply in 2019 will keep pace with nominal GDP growth and be roughly in line with last year's real growth rates. This will ensure both indicators better satisfy the requirement of keeping the economy performing within an appropriate range. We will employ a combination of monetary policy tools with flexibility, maintain reasonable and ample liquidity, and keep market interest rates stable at an appropriate level. We will improve the transmission mechanism of monetary policy and ensure better coordination and support between monetary policy and financial regulation. We will move forward market-based interest rate reforms, increase the proportion of direct financing, and effectively ease problems in the real economy, especially for the manufacturing firms, small and micro businesses, and private enterprises that are finding it tough and expensive to access financing.
With a view to further improving the RMB exchange rate regime, we will increase the exchange rate's flexibility, enhance oversight over cross-border capital flows, and ensure the RMB exchange rate stays generally stable at an adaptive, equilibrium level. Working hard to keep stock, bond, and foreign exchange markets stable, we will respond swiftly to any abnormal fluctuations and guard against and defuse financial risks and hidden dangers.
Implementing a jobs first policy with all-out efforts
Ensuring stability in employment and promoting job creation will be priorities in economic and social development. We will improve pro-employment policies and give better play to the crucial role of business startups and innovation initiatives in creating jobs. We will promote the development of some labor-intensive industries and the service sector, which provides large numbers of employment opportunities, and support private enterprises and medium, small, and micro businesses in creating more jobs. We will help college graduates, demobilized military personnel, laid-off workers, and rural migrant workers find employment, and launch large-scale vocational skills training initiatives. We will give more support to flexible and new forms of employment, provide better, all-round public employment services, and strive to see that, in the course of pursuing high-quality economic development, we also achieve higher-quality, fuller employment.
Stepping up overall policy planning and coordination
We will further improve top-level design to make policies more consistent, more stable, and better coordinated and ensure we get the timing and intensity right when enacting policies. We will look to our national development plans for strategic guidance and put greater emphasis on aligning annual economic and social development plans with the 13th Five-Year Plan. We will enhance the mechanisms for coordinating fiscal, monetary, industrial, regional, and other economic policies and undertake explorations on establishing an evaluation mechanism for macroeconomic policy. With these efforts, we will avoid cases where policies are uncoordinated or lack supplementary instruments or where they adversely overlap or even clash with one another.
We must keep industrial policy inclusive and functional and see it better supports efforts to improve the structure and quality of supply. We will strengthen the fundamental position of competition policies to ensure the market plays the decisive role in resource allocation and the government better plays its role. We will step up fair competition reviews and enforcement of anti-monopoly and anti-unfair competition laws, standardize government conduct, and break administrative monopolies and local protectionism. We will refine standards for technology, environmental protection, quality, and safety, lower the market entry threshold, and improve the property rights system and the mechanisms for exiting the market. We will foster an institutional environment that facilitates fair competition, advance the development of a sound unified market nationwide, and encourage faster growth among small and medium enterprises.
Our regional policy will focus on speeding up implementation of the coordinated regional development strategy. We will tailor policies to local conditions, provide category-specific guidance, and give play to local comparative strengths. We will encourage the orderly flow of production factors and improve the mechanisms for promoting regional cooperation and integrating markets. We will pick up the pace in developing institutions, mechanisms, and policies for integrated rural and urban development. We will improve the policies on granting permanent urban residency to people from rural areas, and work to ensure basic public services in cities are accessible to rural migrant workers and their families. All these efforts will see that we unlock potential domestic demand in the course of promoting urbanization and urban and rural development.
III. Major Tasks for Economic and Social Development in 2019
In 2019, we will continue following the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and fully apply the guiding principles from the 19th CPC National Congress and the second and third plenary sessions of the 19th CPC Central Committee. In line with the decisions and plans of the CPC Central Committee and the State Council, the principles of the Central Economic Work Conference, and the requirements of the Report on the Work of the Government, we will focus our work on the following eight areas.
1. Deepening supply-side structural reform
We will follow a policy of consolidating the gains in the five priority tasks, strengthening the dynamism of micro entities, upgrading industrial chains, and ensure unimpeded flows in the economy. On this basis we will work with enterprises to effectively resolve their difficulties and firm up the foundation for developing the real economy.
1) We will pursue high-quality development of manufacturing.
We will formulate an implementation plan for promoting high-quality development of the manufacturing sector, and foster advanced manufacturing clusters. We will continue cutting overcapacity through structural adjustments and improve the mechanisms for sharing among all involved the responsibilities for making cuts and bearing the resulting losses. We will steadily promote competition so that only the fittest enterprises survive, and move faster to deal with "zombie enterprises." Implementation plans on phasing out overcapacity will be introduced.
We will adopt a joined-up approach to lowering enterprise leverage ratios, merging and reorganizing enterprises, and integrating industries. Appropriate measures will be taken to assist workers displaced due to overcapacity cuts.
2) We will promote integration of advanced manufacturing and modern services.
We will set out the guidelines to more deeply embed next-generation IT into the manufacturing sector, and work for greater levels of integration and mutual reinforcement between industrial internet innovations and intelligent manufacturing and e-commerce. Traditional industries will be encouraged to make a faster shift to digital, internet-based, and smart-tech models; and integrated development of the manufacturing and logistics sectors will be promoted. We will formulate an action plan for high-quality development of the service sector, and move forward with trials on comprehensive service-sector reforms.
3) We will further cut the costs of enterprises.
We will introduce both general-benefit and structural tax cuts, and tax relief will be available for all small and micro businesses and sci-tech startups. We will start revising the catalog of corporate income tax credits for environmental protection, energy and water conservation, and the comprehensive use of resources.
We will overhaul and standardize business service fees. We will make good use of the national financing guaranty fund, and make good use of the rewards and subsidies mechanism to reduce small and micro businesses' financing guarantee costs. We will press ahead with sharing public credit and financial credit information, and create credit-based financing models for small and micro businesses and for agriculture, rural areas, and rural residents.
In transportation, we will vigorously develop containerization, continue multimodal transportation demonstration projects, and strive to solve the "last-kilometer" problem in combined highway, railway, and water transportation services. These efforts will deliver substantial cuts in logistics costs.
4) We will boost support for private enterprises.
There will be no irresolution about consolidating and developing the public sector and no irresolution about encouraging, supporting, and guiding non-public sector development. The non-public sector will receive all the encouragement, support, and guidance it needs to thrive, and vigorous efforts will be made to create an environment characterized by fair market competition and law-based institutions.
We will continue boosting protection for property rights and strengthen government integrity-building. As part of this, we will take targeted action to address failures to act in good faith on property rights protection in government administration, and local authorities will have assistance in resolving property rights disputes that have elicited a strong reaction from enterprises and the public.
Robust mechanisms will be put in place to include business owners and executives in formulating enterprise-related policies. We will keep working to build a new type of cordial and clean relationship between government and business, and take steps to ensure the full implementation of policies on encouraging and protecting entrepreneurship. We will also issue guidelines on supporting reform and development in private enterprises.
Private enterprises will see their rights and interests being protected in accordance with law, and vigorous steps will be taken to protect the personal safety and property of business owners and executives so they can do business with peace of mind. We will take further action to deal with the problem of defaults on payments to private enterprises and small and medium businesses. We will continue to overhaul and standardize security deposits in the construction industry.
We will harness the advantages of all types of financial institutions, improve the credit rating system for private enterprises, and encourage banks to lend to them on medium- and long-term basis. We will develop new types of bonds, allow more competitive enterprises to issue bonds, support private businesses in accessing bond financing, and make explorations on creating tools to support private businesses in obtaining equity financing. Through these multiple channels, we will help solve the problems of private enterprises finding it tough and costly to obtain financing.
We will develop new incentives for good-faith actors, explore ways to expand the Good Credit Plus services initiative, and ensure more beneficial and easily accessible services for individuals and enterprises with good credit scores. Targeted measures will be adopted to address the problem of excluding and restricting private enterprises from public bidding.
5) We will deepen supply-side structural reform in agriculture.
We will keep a firm focus on grain production. We will ensure full implementation of the food security responsibility system for provincial governors, push forward quality grain programs, and ensure total grain acreage remains steady at 110 million hectares.
We will complete the work of delimiting grain-producing functional zones and protected production areas for major agricultural products, and improve farmland irrigation and water conservancy; and the area of high-quality cropland will be increased by at least 5.33 million hectares. We will improve the crop mix, encouraging farmers to grow crops that are in short supply, are environmentally friendly, and are of high-quality, and promoting a shift in the focus of agriculture from increasing output to raising quality. Trials of crop rotation and fallow land will be carried out steadily. We will implement a strategic plan for quality-driven reinvigoration of agriculture, and put in place supplementary policies and assessment, review, and work systems. Continuing the push toward the green development of agriculture, we will support the building of pilot zones for this express purpose.
We will step up reform and innovation in agricultural science and technology, make a big push to develop the modern seed industry, promote the application of advanced, practical technologies, launch programs to protect agricultural products using geographical indications, and push ahead with complete agricultural mechanization.
We will move faster to build a rural industrial system, further promote the integrated development of rural primary, secondary, and tertiary industries, and strengthen county economies. This will see rural areas being encouraged to take new approaches in developing their distinctive local industries and new types of services. We will support the development of areas growing quality, distinctive local agricultural products, modern agriculture industrial parks, and towns with agricultural strengths. We will cultivate and support national leading enterprises in agricultural industrialization, foster new agribusiness models such as family farms and farmer cooperatives, and accelerate the development of new industries and new forms of business in rural areas.
We will refine policies on minimum purchase prices for rice and wheat and on corn and soybean production subsides, further increase the subsidies for soybeans, and employ a variety of ways to expand the area of land under soybean cultivation. We will expand trial reforms of policy-backed agricultural insurance, and develop new and better rural financial services.
There will be no let-up in our efforts to successfully prevent and control African swine fever and ensure production and supply of livestock and poultry products. The reserve system for important agricultural supplies such as chemical fertilizers and pesticides will be improved.
We will move faster to establish a new type of support and protection policy framework for agriculture in line with international rules.
2. Developing a strong domestic market
To fulfill the requirement of managing our own affairs well and the task of meeting the people's ever-growing needs for a better life, we will work to vigorously develop the domestic market, promote beneficial circulation in the economy, and ensure a dynamic equilibrium of supply and demand.
1) We will accelerate transformation and upgrading of traditional industries.
Guidelines on accelerating transformation and upgrading of traditional industries and developing a dynamic domestic market will be formulated, and the catalog of industrial structural adjustments will be revised. Efforts will be made to increase the support of innovation, land, human resources, and other factors of production and to ensure the medium- and long-term funding needed for manufacturing enterprises to upgrade their technologies and transform their business models. We will strongly support the development of major technological equipment to shore up areas of weakness, and promote the demonstration and application of newly-developed equipment. We will support the efforts to improve quality and build brands, attach greater importance to standards, and strive to bolster product quality. We will upgrade major industrial bases, and cultivate modern industrial clusters. We will organize a new round of technology transformation and upgrading projects, and harness new technologies like the internet, big data, and AI and advanced, applicable green methods, technologies, and equipment to transform traditional industries and promote their safe, green, intensive, and efficient development.
2) We will foster emerging industries.
We will optimize the oversight mechanism for new forms and new models of business and promote deeper cooperation between government, banks, and enterprises in developing emerging industries. We will prioritize and strongly develop a number of clusters of strategic emerging industries in key fields such as next-generation IT, high-end equipment, biotechnology, and new materials. We will move faster to set up a policy framework for the digital economy, formulate an Internet Plus action plan for the new era, and carry out major digital economy and Internet Plus projects. We will set up leading zones for new AI applications and continue developing integrated experimental zones for big data.
We will move quickly to launch commercial 5G operations and expand deployment of Internet Protocol version six (IPv6), and strengthen the development and integrated application of new types of infrastructure in AI, the industrial internet, and the Internet of Things. We will commence research and planning on a National Broadband Internet Agenda for the new era and step up construction of next-generation information infrastructure.
Research will be conducted on formulating a bio-economy development strategy and a package of policies for developing the biotech industry. We will take further action to boost growth of the biotech industry and to promote integrated development of biotechnology and information technology. Further steps will be taken to develop the general aviation industry.
3) We will focus on key areas and promote effective investment.
We will draw up an implementation plan for high-quality infrastructure development, and promote the implementation of measures on sustaining efforts to strengthen areas of weakness in infrastructure. A total of 577.6 billion yuan from the central government budget will be allocated for investment this year, 40 billion more than last year. Adjustments will be made to optimize the composition of investments from the central government budget. The bulk of investments will go to support agriculture, rural areas, and rural residents; major infrastructure, innovation-driven development, and structural adjustments; government-subsidized housing, social programs, and social governance; and energy saving, environmental protection, and ecological conservation. We will work harder to ensure funding for ongoing projects; and to avoid projects being only half-finished, local governments will be encouraged to make good use of available fiscal funds, which should be used primarily for infrastructure projects already under way.
We will ensure stronger long-term mechanisms for attracting private investment into key areas, with greater encouragement for private enterprises to get involved in major national strategies and state projects to strengthen areas of weakness. We will encourage the participation of private capital through PPP projects in various forms such as mixed ownership and joint bidding consortiums.
We will press ahead with the planning and development of major projects such as the Chengdu-Lhasa railway, high-speed railway along the Yangtze River, a north-to-south coal line, trans-regional power transmission routes, and hydropower projects in southwest China. We will support major city clusters in moving faster to plan and build intercity, municipal, and suburban rail services—included in this are the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, the Shandong Peninsula, and the Beibu Bay area. Follow-up projects for the Three Gorges Reservoir area will be advanced. We will speed up preliminary work for major projects such as a new channel for the Three Georges water transportation hub and the project to expand the navigational capacity of the Gezhouba Dam. Plans will be made to build new land-sea transit routes for the western region, and faster progress will be achieved in building a national network of natural gas pipelines.
We will continue projects to build, relocate, rebuild, and expand hub airports, and construct regional airports and general-purpose airports in a well-planned way. We will speed up construction of Beijing Daxing International Airport and operational preparations to ensure its opening at the end of this September. We will advance the construction of comprehensive passenger transportation hubs and logistics hubs, draw up an implementation plan for developing a national network of logistics hubs, support the building of port logistics railways, and solve the "last-kilometer" problem in transportation connectivity.
4) We will foster new growth areas in consumption for the benefit of the people.
We will work on drawing up a three-year action plan for increasing personal income. We will ensure implementation of the policy on raising the personal income tax threshold and introducing six special deductible items, and carry out trials on increasing the incomes of urban and rural residents. We will move forward with plans on providing incentives to increase incomes for key groups such as skilled personnel, new-type professional farmers, and R&D personnel, and improve the performance-based salary system for public institution employees. These actions will help further improve people's ability to consume.
We will formulate measures for boosting spending on automobiles, home appliances, and other popular products, and keep channels between urban and rural markets free-flowing. We will launch a series of online shopping promotions to boost brand and quality consumption, and unlock the consumption potential of online shopping and tourism in rural areas. To promote improvements in the quality of our products and services, we will implement a strategy to make China strong on quality. We will launch a three-year campaign against counterfeit and substandard goods to ensure a clean market environment for consumers. We will intensify efforts to ensure that products sold domestically are produced on the same production lines, meet the same standards, and are of the same quality as exported ones, and improve the system for quality traceability of important goods. We will upgrade pedestrian malls in major cities, and encourage consumers to purchase high-end goods and services at home instead of overseas. We will support efforts to make applied electronic products smarter, and work on further expanding and upgrading consumption of information goods and services. To encourage green consumption, we will introduce new incentive policies and tighten market oversight.
We will speed up development of specific service sectors, including education, childcare, elderly care, housekeeping, healthcare, culture, and tourism. We will expand the diversity of products and services in culture and tourism, and promote the development of new forms of business and models of consumption. We will formulate an action plan to develop the health industry, and build more facilities to encourage sports-related spending. We will ensure implementation of the paid vacation system. Policies and measures will be introduced to improve care services for the elderly. Pilot and demonstration projects will be carried out to set standards for domestic services, and training will be boosted for domestic-service personnel.
We will continue working to make Hainan an international hotspot for tourism and shopping, to grow Pingtan as an international tourism island, and to develop Hengqin as an international leisure and tourism resort. We will organize the implementation of the Action Plan (2018-2020) for Redeveloping and Upgrading Tourism Infrastructure in the Three Regions and Three Prefectures and Other Areas Affected by Extreme Poverty. We will improve the infrastructure and public service facilities at major tourist attractions, installing rapid transit services, walkways, and parking lots. We will set standards for the sound development of theme parks, and support cruiser liner and recreational vehicle-based spending. Research will be conducted to formulate guidelines on developing the winter economy in northeast China. Joint review and approval of privately-run hospitals will be carried out by related government departments.
5) We will keep market expectations stable.
We will actively work to enhance explanations of major policies, adopt new approaches in policy communication, and ensure all types of market entities have a correct understanding of our policies. We will take timely and appropriate measures to defuse major risks and potential dangers that may affect market expectations, pay close attention to trends in society, respond to people's concerns promptly, and take stronger measures to deal with major and serious emergencies. We will gather, publish, and analyze data for China's fourth economic census.
We will closely monitor and analyze changes in supply and demand and the prices of major commodities, ensure market supply and price stability, strengthen regulation of the production, supply, storage, marketing, and transportation of goods, and crack down on speculative hoarding, price gouging, and other illegal activities.
3. Securing progress in the critical battles against potential risk, poverty, and pollution
Aiming at the most pronounced problems, we will rely on collective efforts, category-based approaches, and targeted policies to accomplish key tasks, tackle tough challenges, and achieve solid results.
1) We will further advance the battle against major risks.
We will firmly apply a holistic approach to national security. We will improve the systems and mechanisms for safeguarding national economic security, strengthen the monitoring, assessment, and early warning of major risks, and make sure no systemic risks arise. Sticking with the basic approach of structural deleveraging, and setting a proper pace and intensity, we will work for the early implementation of contracted projects for market-based debt-to-equity swaps, impose stronger constraints on the debt-to-asset ratios of SOEs, and establish systems for monitoring and sending early warnings on enterprise debt risks.
Oversight over capital flow in the stock, bond, and foreign exchange markets and the handling of related risks will be strengthened to prevent abnormal fluctuations and resonance in the financial market. Basic capital market systems will be improved, oversight over internet finance will be strengthened, and orderly steps will be taken to defuse shadow banking risks. Working to remedy the weak points in the regulation system, we will unveil, at the earliest possible date, measures for regulating financial holding companies. We will see that local government debt risks are handled properly. We will firmly check increases in hidden local government debt, take orderly steps to deal with existing debt, and support the market-oriented transformation of financing platform companies.
In line with the principle that houses are for living in, not for speculation, we will take prudent steps to establish a long-term mechanism to facilitate the stable and healthy development of the real estate market, and take measures to see that municipal governments fulfill their primary responsibility in this respect. We will keep land prices, housing prices, and expectations stable, and resolutely prevent and defuse risks in the housing market. We will encourage both the rental and purchase of housing, improve the housing market and housing support systems, and work hard to help medium- and low-income urban residents and new urban residents solve their housing problems. We will reform the housing provident fund system, and work faster to develop the housing rental market, particularly the long-term rental market, in large and medium-sized cities that have net population inflows.
2) We will make good strides in the battle against poverty.
We will firmly move forward with the three-year initiative for winning the battle against poverty, with a focus on supporting particular groups affected by poverty and areas classified as extremely poor, such as the aforementioned three regions and three prefectures. Priority will be given to resolving the key problems in our efforts to ensure adequate food and clothing and access to education, basic medical services, and housing for the rural poor population.
We will step up efforts to reduce poverty by developing local industries, boosting employment, education, healthcare, and social security, and providing ecological-conservation subsidies, and take action to tackle poverty resulting from disability. The responsibility system for poverty elimination will be effectively enforced, and evaluation, oversight, and assessment mechanisms will be improved. We will make explorations on establishing long-term mechanisms for people to steadily make their way out and stay out of poverty, thereby reducing and preventing cases of people slipping back into impoverishment. Counties that have eliminated poverty will be encouraged to consolidate their progress and promote local development through the rural revitalization strategy. We will explore solutions for new issues such as the lack of support polices for those with incomes slightly above the poverty line. This year, the rural poor population is targeted to fall by at least ten million, and work on projects to relocate poor populations from inhospitable areas during the 13th Five-Year Plan period will be basically completed.
3) We will make solid progress in the battle against pollution.
We will hold our ground and consolidate the progress made in coordinating high-quality economic growth and high-standard ecological and environmental protection. We will not relax restrictions or slacken efforts, much less allow a return to the ways of the past.
We will put greater energy and investment into the seven campaigns to keep our skies blue, control pollution caused by diesel trucks, improve black, malodorous water bodies in cities, carry out protection and restoration in the Yangtze River basin, improve the water environment of the Bohai Sea region, control pollution in agriculture and rural areas, and protect water sources. We will work to achieve major scientific and technological breakthroughs in pollution prevention and control. We will reform and innovate environmental governance methods, draw up guidelines on establishing an environmental governance system in which government leads, enterprises are the main actors, and social organizations and the public participate, and ensure that enterprises shoulder the primary responsibility for pollution prevention and control and the responsibility for environmental protection. We will strengthen inspections on ecological and environmental protection, and help enterprises develop their own environmental improvement solutions.
We will encourage upgrading in the steel industry to achieve ultra-low emissions, steadily advance efforts to upgrade coal-burning power plants to achieve ultra-low emissions and energy conservation, and promote efficient, clean, and high-quality development of coal-fired power plants. We will adjust and optimize the mix of freight transportation modes, increasing the proportion of rail and water transportation for coal, ore, coke, and other bulk goods.
We will continue the three-year initiative to treat urban sewage more effectively and efficiently, advance the sorting of urban household waste across the country, and draw up guidelines on taking stronger steps to prevent and control plastic pollution. We will run trials on a "no waste cities" initiative, and take action to prevent and address pollution caused by used lead storage batteries.
We will make a major push to promote conservation and efficient use of energy, and urge key localities to cut coal consumption by replacing it with alternative energy and by using coal in a cleaner and more efficient way. We will effectively promote clean energy sources for winter heating across northern China, and concentrate resources to ensure cleaner use of coal in non-industrial sectors in the Beijing-Tianjin-Hebei region and surrounding areas and the Fenwei Plain region.
We will improve natural gas production, supply, reserve, and sale systems, and take orderly steps to replace coal with gas in areas where gas supply is sufficient for such replacement. We will support the use of clean energy in multiple ways, raise the share of renewable energy in total energy consumption, and establish a long-term mechanism to absorb electricity generated from renewable energy sources into power grids.
We will redouble our efforts to protect and restore ecosystems. We will address the spread of desertification and stony deserts, work harder to protect biodiversity, and continue efforts to return marginal farmland to forests, grasslands, and wetlands. We will conduct extensive surveys and set standards for ecological red lines, and build an oversight and management platform for these lines. Diversified trans-regional ecological compensation mechanisms will be improved. We will make progress in large-scale afforestation, improve the quality of ecosystems in forests, grasslands, and wetlands, and deepen reform on the national parks system. We will achieve extensive roll-out of the river chief and lake chief systems, and continue to advance the comprehensive governance of the water environment in key river basins. Control and oversight will be tightened over coastal reclamation activities.
We will further develop and refine our legal and policy systems to promote green production and consumption, and put forward guidelines on building a sound economic structure that facilitates green, low-carbon, and circular development. We will promote the construction of resource recycling centers. We will carry out the national water conservation campaign and ensure water resources are better managed and more efficiently utilized. We will encourage the construction of eco-friendly buildings and the use of eco-friendly express delivery packaging. We will move faster to set up a system for market-oriented green technology innovation and release the Catalog of Green Industries (2019). We will promote green and efficient refrigeration, reform and improve economic policies concerning environmental protections, refine the cap-and-trade system for emissions, and develop green finance. We will promote contracted energy and water-conservation management models and third-party treatment of environmental pollution, make rapid advances in green manufacturing, and boost the growth of green industries in relation to energy conservation and environmental protection. Initiatives will be carried out to promote eco-friendly lifestyles.
We will execute the national strategy for responding to climate change, move faster to improve national carbon market institutions, and actively participate in global climate governance.
4. Moving faster to build China into a country of innovators
We will implement the innovation-driven development strategy, take the business startups and innovation initiative to the next level, and promote military-civilian collaboration in innovation, to comprehensively raise our innovation capacity and efficiency.
1) We will improve national innovation systems.
Research and planning will be carried out for a new round of pilot reforms on comprehensive innovation. We will keep advancing reform of the science and technology management system, with particular emphasis on implementing policies on granting greater autonomy to research institutes and researchers. To see scientific advances being applied more quickly, we will pursue reform of the systems for assessing the scientific, technological, and economic value of science and technology innovations. We will establish a robust science and technology personnel evaluation and incentive system based on innovation, quality, and contribution. We will draw up plans on a new round of national scientific and technological development over the medium and long term. Investment in basic research will maintain steady growth, and efforts will be accelerated to implement major national science and technology programs and major projects for the Sci-Tech Innovation 2030 Agenda.
We will work to establish open, coordinated, and efficient platforms for research on generic technologies, and move faster to improve collaborative innovation mechanisms for bringing together enterprises, academia, and research institutes, which are demand-oriented and give enterprises the leading role. Private enterprises will receive strong support in pursuing original innovation. There will be support for leading enterprises, including private high-tech enterprises, to initiate major technology projects, and efforts will be made to achieve better integration and sharing of innovation resources among companies, research institutes, and universities. We will step up cooperation to see technological breakthroughs in projects designed to strengthen China's industrial foundation, and promote demonstrations for technology applications throughout the industrial chain.
We will move swiftly to carry out overall planning for the development of national laboratories, and reorganize the system of national key laboratories. Major science and technology projects will be better organized and managed. We will step up the development of national industrial innovation centers, support the building of a new group of national demonstration zones for independent innovation, and make plans for building several national manufacturing innovation centers in key sectors. We will speed up the development of the Beijing-Tianjin-Hebei region as a collaborative innovation community, support Beijing and Shanghai in developing into science and technology innovation centers, and support the construction of comprehensive national science centers in Huairou in Beijing, Zhangjiang in Shanghai, and Hefei in Anhui. We will see that scientific and technological innovation underpins the strategies on the development of the Yangtze Economic Belt and regional integration in the Yangtze River Delta. We will conduct research on and provide strong support to the initiative to develop the Guangdong-Hong Kong-Macao Greater Bay Area into an international science and technology innovation center, and make plans for building a national comprehensive science center in the area.
2) We will promote high-quality innovation and business startups.
We will work quickly to implement major projects under the upgraded edition of the business startups and innovation initiative. To further improve the environment for making innovations and starting businesses, we will ensure the implementation of all policies on supporting business startups, refine our public service systems, develop all types of supportive platforms like business incubation centers, and also build platforms for exhibitions, exchanges, and resource sharing.
We will take comprehensive measures to strengthen IPR protection, establish service systems covering intellectual property trade and assessment, and improve the punitive damages system for IPR infringements.
We will further enhance policies to support venture capital, and encourage the issuance of special bonds by financial institutions for funding innovation and business startups and special bonds for funding innovation and business incubation. We will promote the efficient operation of the National Venture Capital Guide Fund for Emerging Industries, and build venture capital alliances for emerging industries. We will ensure this year's National Entrepreneurship and Innovation Week is a success.
3) We will make steady progress in deepening military-civilian integration.
We will push ahead with major MCI demonstration projects and the construction of MCI innovation demonstration zones. We will promote military-civilian integration in industries to give full play to its important role in cultivating strong drivers of economic growth.
We will take strong, wide-ranging measures in undertaking trials to enforce national defense requirements for economic projects, with a view to achieving shared benefits and applications through joint efforts of both sectors. MCI systems and mechanisms will be improved, so that barriers blocking civilian participation in military programs are eliminated, and more military technologies are put to civilian uses. We will improve mechanisms for training personnel competent for both military and civilian jobs and ensure channels are open for personnel movement between military and civilian sectors. We will continue to support the enhancement of production capacity in the defense industry, and improve plans for national economic mobilization.
Steps will be taken to promote comprehensive legislation on military-civilian integration. Pilot reforms on mixed ownership in military industry enterprises will be deepened. We will support commercialization and application of military technological advances in the civilian sector, and vice versa. We will integrate and expand the functions of the national MCI public service platform.
5. Consistently deepening reform in key areas
Fully implementing the guiding principles of General Secretary Xi Jinping's speech at the meeting marking the 40th anniversary of reform and opening up, we will continue to bolster the leading role of reform, and carry out deeper and more concrete economic structural reform with a focus on energizing micro entities.
1) We will deepen reforms to streamline administration, delegate powers, improve regulation, and upgrade services.
To bring about a marked improvement in the national business environment, we will act quickly to enhance China's business environment assessment system, refine assessment and analysis systems, and begin pilot business environment assessments in municipalities directly under the central government, cities specifically designated in the state plan, some provincial capitals, and some prefecture-level cities. This will also help reduce government-imposed transaction costs.
We will continue promoting full implementation of the market access negative list system. We will establish a dynamic mechanism for adjusting the list, make further improvements to the system for publishing list-related information, and make sure all sectors not restricted by the list are accessible.
We will once again abolish a slew of administrative approval items, promptly overhaul all stealth approval and permit procedures, and reduce and standardize administrative penalty items. We will further cut the time it takes to approve a construction project, and cut the steps, the time, and the costs involved in starting businesses, registering trademarks and property, getting electricity, and trading across borders. We will further overhaul and standardize all types of intermediary services needed for obtaining government approval, and move forward across the board with untying industry associations and chambers of commerce from the government. All these efforts will help create an enabling environment for businesses that is consistent with the rule of law and international practices.
We will deepen institutional reforms in the business sector, implement the reform to separate out the business license from certificates required for starting a business across the country, advance the reforms on making it easier to cancel market entities, and scale back the time required for patent review and trademark registration.
We will move faster to improve the new-type oversight mechanism, which is centered on oversight of credibility, supplemented by oversight of major areas, and based on the model using randomly selected inspectors to inspect randomly selected entities and requiring the prompt release of results. In terms of market regulation, we will promote the adoption of the above-mentioned model across departments, and step up law enforcement to combat monopolistic pricing and unfair competition. A big push will be made to continue rolling out the Internet Plus Government Services model, and quickly build a digital government. We will move quickly to set up a national unified online government service platform to see that all government services are accessible online and trans-regionally. Management provisions for government information systems will be unveiled, and a robust list-based management mechanism for government information systems will be established.
2) We will promote state capital and SOE reforms.
We will steadily implement the guidelines and supplementary documents on deepening reform of SOEs and promote extensive application of successful outcomes from pilot reforms. We will draw up plans on reforming the system for authorized operations of state capital, deepen comprehensive reform, establish a system of professional managers, and strive to foster world-class enterprises. We will push ahead with trial reforms on mixed ownership in key fields, improve supplementary policies on employee equity stakes and other issues, accelerate reforms in general sectors of competition, and encourage private enterprises to actively participate in SOE reform.
We will remain committed to strengthening, expanding, and increasing the returns on state capital, and press ahead with the strategic reorganization of the state-owned sector of the economy to improve its layout. To more quickly shift the focus of oversight from enterprises to capital, we will establish a number of state capital investment companies through reorganizations as well as a number of state capital management companies, and see that better results are achieved in the trial reforms on state capital investment and management companies. We will conduct research on expanding the scope of the state capital operations budget, and raise the proportion of funds allocated from this budget to the general public budget. We will continue the work of transferring a portion of state capital into social security funds in tranches. We will push forward the reform on improving the salary-setting mechanisms of SOEs.
3) We will deepen reform in key industries.
We will carry out structural reform of the petroleum and natural gas industries, and establish a national oil and gas pipeline corporation so as to separate transportation and marketing. We will lift restrictions on access to petroleum and natural gas exploration and exploitation, and actively encourage private investors to step up exploration and exploitation activities.
We will promote further reform of the electricity industry, and support independent and procedure-based operations by electricity trading agencies. We will move swiftly in making electricity transactions market-based, steadily establish pilot markets for spot trading of electricity, and expand trial reforms on raising the number of electricity distributors. We will make further strides in reforming electricity transmission and distribution pricing during the second regulatory period, which will be based on cost monitoring, review, and investigation.
We will make more progress in price reforms in key sectors such as petroleum, natural gas, and transportation, and further structural reforms of postal services and the tobacco industry.
4) We will optimize the market-based mechanisms for allocating factors of production.
We will formulate guidelines on improving market-based allocation of factors of production, and improve systems for accessing, regulating, and exiting the market. We will do more to develop human resources markets and to promote free and orderly flows of human resources. To refine investment and financing systems and mechanisms, we will work faster to guide the transformation of investment and financing services, continue to standardize and streamline investment approval procedures, and deepen the reform to introduce a business-invested project commitment system.
To expand the paid use of state-owned land, we will push ahead the pilot reform for allowing the market to allocate land designated for industrial purposes, promote the sale of such land through various means in the primary market and the orderly transfer of its use rights in the secondary market, and move forward with the marketization of rural collective land designated for business-related construction.
We will proceed with the integration and sharing of trading platforms for public resources. We will promote market-based allocation of technologies, and make explorations on reform of the system for property rights of scientific and technological outputs produced on the job. We will push ahead with market-based allocation of data and information, and improve the system for personal information authorization and big data trading.
5) We will deepen the fiscal, tax, and financial reforms.
We will draw up reform plans for appropriately dividing fiscal authority and spending responsibilities between the central and local governments in such fields as emergency rescue and natural resources. We will improve local tax systems, reform the practice of revenue sharing between the central and local governments, and implement performance-based budgetary management across the board. We will deepen VAT reform, and phase in a system to refund end-of-tax-period VAT credits.
We will set up a Science and Technology Innovation Board at Shanghai Stock Exchange and launch trials for a registration-based IPO system. For listed companies, we will improve the share repurchase system and refine the cash dividend mechanism and delisting system.
We will improve the regulatory framework underpinned by monetary and macro-prudential policies, and bring more financial activities, markets, institutions, and infrastructure into the macro-prudential policy framework. Improvements will be made to the systems for unified monitoring and management of foreign debt and cross-border capital. Reforms will be carried out to refine the local financial regulatory system, and steps will be taken to crack down on illegal financial institutions and activities.
6. Pursuing higher-level opening up
We will step up cooperation under the Belt and Road Initiative, and pursue high-standard, all-round opening up in more sectors and in a more thorough fashion.
1) We will promote international cooperation under the BRI.
We will ensure the success of the second Belt and Road Forum for International Cooperation to be held this year. We will seek coordination between China's development plans and those of other countries along the BRI routes. Focusing on major projects, including infrastructure construction, and industrial-capacity cooperation, we will address key problems such as those related to financial support, investment environments, risk management, and security, strengthen cultural exchanges and cooperation on personnel training, and ensure cooperation produces more results. We will promote greater cooperation on the development of the Digital Silk Road and advance cooperation between China and ASEAN on creating a smart cities network.
We will build high-quality overseas platforms such as economic and trade cooperation zones and industrial-capacity cooperation parks and zones. We will promote high-quality development of China-Europe freight train services, and work to promote Silk Road E-Commerce across the globe. We will take substantive strides with France, Germany, Japan, Singapore, and other countries on third-market cooperation and innovation cooperation, and we will vigorously promote cooperation with Pacific island countries on the economy, trade, and tourism.
To accelerate their development and opening up, we will see that border areas move forward with the construction of key experimental development and opening up zones and cross-border economic cooperation zones. We will support Northeast China to develop itself as a major window for northward opening up and a hub for cooperation with Northeast Asia.
2) We will work for steady growth in foreign trade.
We will further reduce the customs clearance time, lower compliance costs for imports and exports, and take strong steps to promote international mutual accreditation of and cooperation on Authorized Economic Operator (AEO) programs in order to further facilitate trade. We will provide greater support for policies on export credit insurance financing and export tax rebate pledged financing. We will work to diversify export markets.
We will ensure the success of the second China International Import Expo this year, and increase imports of advanced technology and equipment, key parts and components, energy and resources in short supply, and agricultural products. These actions will help promote the balanced development of foreign trade. Working to optimize the import and export mix, we will consolidate traditional competitive edges, and move faster to foster our overall competitive strength with technology, standards, brands, quality, and services as core strengths. We will create new ways of promoting trade in services, step up work to transform and upgrade outsourcing services, develop cross-border e-commerce, and strive to see foreign trade develop in a quality- and performance-oriented way.
3) We will work harder to attract foreign investment.
We will enact the Foreign Investment Law, shorten the negative list for foreign investment, and thoroughly review and remove restrictions on market access for foreign investment to sectors which are not on the list. We will steadily open the financial sector, attract greater inflows of long-term funding, and give play to the effective role of long-term international capital. We will draw up a catalog of industries for foreign investment, attract investment in a broader range of sectors, and encourage multinational companies to invest in China and set up production and R&D centers.
We will improve the service mechanisms for foreign-invested projects, and work to implement a number of key, large projects that can play a strongly demonstrative role. We will refine the system for conducting security reviews of foreign investments. Steady progress will be made in reforming the foreign-debt registration system to ensure a higher level of supervision and management.
We will promote innovations and upgrading in all types of development zones, including state-level economic development zones and high-tech development zones, to give better play to their role of leading development. Reform measures will be devised to support pilot free trade zones in opening wider and pursuing innovation-driven development. We will see an expansion of the China (Shanghai) Pilot Free Trade Zone, and support the nationwide application of entry and exit policies developed in pilot free trade zones and pilot reform zones for comprehensive innovation. We will fully implement policies and measures on supporting Hainan in furthering its reform and opening up on every front, work for the high-quality development of China (Hainan) Pilot Free Trade Zone, and make explorations on setting up free trade ports with Chinese features.
4) We will promote the steady and sound development of outward investment.
We will accelerate the work on formulating the Regulations on Outward Investment, and improve services for and regulation of outward investment. We will promote stronger compliance management among enterprises to ensure their overseas operations are run in a standardized and orderly manner, and give joint incentives to those that act in good faith and take joint punitive actions against those that act in bad faith. We will enhance the building of public service platforms for companies that "go global," and establish a unified, inter-departmental information collection and sharing system. We will work to strengthen the prevention and control system for security risks and raise our overall capacity to safeguard Chinese security and respond to risks overseas.
5) We will play an active role in the reform and improvement of international trade rules.
China will be proactive about developing global partnerships, make full use of international platforms to enhance policy coordination, and expand converging interests with other countries. We will actively take part in reform of the WTO, firmly uphold the multilateral trading regime, play a positive role in the formulation of multilateral trade rules, and promote the establishment of a fair, reasonable, and transparent system of international trade rules.
We will keep cooperation oriented toward supporting the liberalization and facilitation of trade and investment. We will act on the consensus reached by the Chinese and US presidents in Argentina, and take appropriate steps to advance the China-US trade talks. We will work to realize the adoption of the Regional Comprehensive Economic Partnership Agreement as soon as possible, and accelerate negotiations on investment agreements with the European Union and on establishing the China-Japan-RoK Free Trade Area.
7. Promoting coordinated urban-rural and regional development
Targeting the problems of unbalanced and inadequate development, we will ensure effective implementation of the strategies of rural revitalization and coordinated regional development, improve the quality of new urbanization, and narrow the disparities in development between rural and urban areas and between regions.
1) We will continue with the rural revitalization strategy.
Following the general principle of prioritizing agricultural and rural development, we will make good strides in completing the tasks in the Strategic Agenda for Rural Revitalization (2018-2022). We will accelerate the work on formulating village development plans, promote the upgrading of infrastructure and public services in rural areas, refine the diversified investment mechanism, and work toward integrated planning and connectivity for road, water, power, gas, and information infrastructure in urban and rural areas. Public services will cover more villages, and social programs will cover all rural areas. More support will be given to projects to build on the progress made in ensuring safe drinking water in rural areas. We will ensure good results in the three-year campaign to improve rural living environments, putting a focus on advancing the Toilet Revolution, and working to efficiently treat household waste and sewage, promote the sorting and recycling of rural waste, and make our villages beautiful. We will step up efforts to comprehensively tackle soil erosion in rural areas and ensure small water basins are ecologically clean.
We will improve the infrastructure networks for logistics that cover counties, townships, and villages, speed up the building of backbone logistics networks and cold-chain logistics facilities for agricultural products, and promote the sharing of major municipal facilities between urban and rural areas. We will launch projects to improve village infrastructure, and build or upgrade 200,000 kilometers of rural roads.
We will deepen rural reforms on all fronts. We will push ahead reform on the rural land requisition system, advance the reform on rural land designated for housing in a steady, prudent manner, and continue the determination, registration, and certification of integrated housing ownership and land-use rights for rural collective land designated for construction and for rural land designated for housing. We will work quickly to put to good use idle land designated for housing and vacant dwellings, further reform the rural collective property rights system, and advance the reform of state farms on reclaimed land.
2) We will make solid progress in people-centered new urbanization.
We will set up robust institutions, mechanisms, and policy systems to promote integrated urban-rural development. Working toward the goal of granting urban residency to 100 million people, we will move faster to reform the household registration system, and allow permanent residents renting accommodation to register under the public residency category in cities.
We will accelerate the building of institutions and mechanisms for integrated growth in city clusters, and boost the role of principal cities in driving the development of surrounding areas by enhancing transportation connectivity and improving the layout of industries.
We will make consistent efforts to improve urban environments. We will move forward work on relocating and renovating old urban industrial areas and hazardous chemical plants located in densely-populated districts, and upgrade old residential quarters in an orderly way. We will encourage the installation of elevators in old residential buildings, and support efforts to develop a barrier-free environment for people with disabilities. We will actively foster new types of smart cities, and develop utility tunnels, sponge cities, and urban drainage and rainwater control facilities. We will encourage the well-regulated and well-ordered development of towns with distinctive features, and put in place diversified and sustainable funding mechanisms for urbanization.
3) We will make progress in coordinated regional development.
We will formulate new policies and measures for development and opening up in the western region and work to create a new pattern of large-scale development in the region. Marked improvements will be made to the region's ecological environment as well as its environments for doing business, opening up, and innovating.
We will support northeast China in deepening reform and innovation and pursuing high-quality development and move faster to enact policies and measures to enhance the local business environment, reform SOEs, and boost the private sector.
We will support the central region to harness local strengths in consolidating the foundation of the manufacturing sector and accommodating industries relocated from other parts of China and abroad in an effective and orderly manner. We will support the central and western regions and northeast China in building demonstration zones for the transfer and commercialization of advances in science and technology.
We will push forward implementation of the development plan for the Huai River Eco-Economic Belt. We will give stronger support to see faster development in old revolutionary base areas, areas with large ethnic minority populations, border areas, and poor areas, boost development and improve living standards in border regions, and promote economic transformation and development in resource-dependent areas.
We will promote high-quality development of state-level new areas, and actively work to support the construction of airport economy demonstration zones, innovation demonstration zones, and other platforms.
We will formulate policies and plans on coordinating land and marine development and building China into a strong maritime country, and ensure high-quality development of the maritime economy.
4) We will continue implementing major national strategies for regional development.
Pursuing coordinated development of the Beijing-Tianjin-Hebei region, we will continue relieving Beijing of functions non-essential to its role as China's capital in a proactive, prudent, and orderly manner; formulate development plans on the Xiongan New Area and supplementary guidelines on its reform and opening up; move forward with infrastructure projects on transportation, ecology, and public services; continue the construction of Beijing's administrative center in Tongzhou; and effectively develop zones for water source conservation and ecosystem and environment support for the capital.
We will advance the development of the Yangtze Economic Belt. In line with a holistic approach to the conservation of mountain, water, forest, farmland, lake, and grassland ecosystems, we will take solid steps to employ the three-fold approach of controlling water pollution, restoring water ecosystems, and conserving water resources, and the "4+1" project on treating urban sewage and garbage and curbing pollution from the chemicals industry, ships, agricultural non-point sources, and tailing sites. We will give play to the advantages of railways, highways, and water transportation in developing an integrated transportation system. In addition, we will upgrade the integrated development of the Yangtze River Delta to a national strategy and formulate a development plan to this end.
We will draw up plans on industrial development, infrastructure, and ecological conservation and environmental protection for the Guangdong-Hong Kong-Macao Greater Bay Area, and support the development of Shenzhen's Qianhai, Guangzhou's Nansha, and Zhuhai's Hengqin as platforms for cooperation between Guangdong, Hong Kong, and Macao.
8. Ensuring and improving people's wellbeing
Acting on the people-centered philosophy of development, we will ensure people's basic needs are met, do well the job of improving living standards, and introduce social policies that are more inclusive and sustainable.
1) We will put employment first.
We will step up monitoring of the employment situation in major enterprises involved in the trade with the US, and set up sound contingency plans and take solid steps to support affected enterprises in keeping employment stable. We will carry out solid work on increasing employment for key groups such as college graduates, demobilized military personnel, and rural migrant workers, and provide stronger employment support for all types of urban residents having difficulty finding employment.
We will continue the initiatives to help college graduates find jobs, guide them in starting businesses, and encourage them to work at community level. A three-year program will be launched to provide internships for 1 million unemployed young people. We will increase support for flexible and new forms of employment, promote the establishment of business incubators across the country, and continue the pilot and demonstration programs on supporting rural migrant workers and others returning home to start businesses.
We will improve the vocational skills training system, and move faster to roll out a system for life-long training. Sound professional development mechanisms for skilled workers will be set up. We will begin work on implementing the action plan on building a basic platform for public vocational training, and move quickly to construct training centers for integrating vocational education with industry. We will keep working to foster a craftsmanship spirit, and introduce a new corporate apprenticeship model. We will promote specialized training programs to help migrant workers improve their skills.
We will continue implementing the time-limited policy of reducing unemployment insurance premiums, substantially expand the scope of expenditures from unemployment insurance funds to ensure employment, and fully enforce the policy of refunding unemployment insurance premiums to help enterprises maintain stable employment. To implement vocational skills training initiatives, 100 billion yuan will be allocated from the balance of unemployment insurance funds for no less than 15 million places on training courses to improve vocational skills and provide reemployment training. We will support enterprises facing difficulties in providing on-the-job training, and give better training in professional skills and business startup to unemployed workers.
All types of enterprises that hire staff who are from rural poor populations or on the urban unemployment register for a minimum period of six months, will be eligible for fixed tax and fee deductions for three years. We will increase support to people with disabilities and others having difficulty finding jobs, and eliminate the phenomenon of zero-employment families.
2) We will improve the system and policies for social security.
We will fully establish a multi-tiered social security system, and set up a social insurance public services platform, which is accessible through the national government service portal. We will work on establishing a mechanism for rational adjustments to basic pension benefits for retirees. We will make progress toward ensuring all people in poverty are covered under the basic old-age insurance scheme. We will implement the central regulation system for enterprise employees' basic old-age insurance funds, move faster to improve unified management of old-age insurance funds at the provincial level, and take steps to ensure reductions in social insurance premiums.
We will take comprehensive moves to establish unified basic medical insurance and major disease insurance systems for rural and non-working urban residents. We will carry out trials for long-term care insurance schemes. We will tighten supervision over and management of medical insurance funds, and further improve the mechanism for trans-provincial on-the-spot settlement of medical bills via medical insurance accounts.
We will improve the system of subsistence allowances for rural residents, and modify the methods for determining eligibility. We will improve the unemployment insurance system, and work to resolve the problem of work-related injury insurance for people without fixed employers working in new forms of business. We will provide assistance and basic necessities to people in extreme poverty, increase temporary assistance, and improve assistance provision methods and the related review and approval procedures, and continue the practice of increasing social security assistance and benefit payments in step with price increases.
We will continue the renovation of dilapidated rural houses and run-down urban areas, and continue to develop public rental housing in a well-regulated manner.
3) We will work hard to address inadequacies in public services, shore up points of weakness, and boost service quality.
We will formulate national standards for basic public services, promote greater cohesion in the standards and norms of different regions and sectors, and carry out an action plan to address inadequacies in public services, shore up points of weakness, and improve service quality.
We will issue the guidelines on promoting development of care services for children under three and ensure more effective supply of childcare. Top priority will be given to education. We will support efforts to make high-quality, public-interest preschool educational resources more broadly available, and support both public and privately-run kindergartens. While ensuring sound development of public kindergartens, we will encourage private entities to operate more public-interest kindergartens, and move quickly to set sound standards for accrediting private public-interest kindergartens, as well as subsidies and supportive policies for such kindergartens.
We will continue pushing for integrated development of compulsory education in urban and rural areas, intensify efforts to universalize senior secondary education, and endeavor to put an end to big class sizes in urban primary and secondary schools. We will continue to improve the basic conditions of schools in poor areas, increase support for early education for children in poor rural areas, work on reducing the drop-out rate in rural and poor areas, and foster a stronger workforce of teachers in rural education.
We will support the development of privately-run schools in accordance with the law. We will promote bilingual education in areas with large ethnic minority populations in a systematic and steady manner. In our efforts to develop modern vocational education, we will reform the enrolment procedures, operational mechanisms, and teaching methods of vocational colleges, support enterprises and private actors' participation in running vocational schools, and speed up work to align vocational technical grade certificates with academic credentials. We will accelerate the development of world-class universities and disciplines, and encourage universities to pursue intensive development. We will ensure progress in initiatives to modernize Chinese education.
In 2019, the retention rate of nine-year compulsory education is expected to reach 94.6%, the gross enrollment ratio for senior secondary education is expected to reach 89.4%, the number of students enrolled in vocational colleges will grow by 1 million, and regular institutions of higher learning are projected to enroll 8.7 million undergraduate students and 933,000 graduate students.
Reform of the medical and health care system will be deepened. We will make a concerted push to establish the five systems of tiered diagnosis and treatment, modern hospital management, universal health insurance, medicine supplies, and comprehensive healthcare oversight. We will develop Internet Plus Healthcare models, and quickly establish a telemedicine service system. We will make steady progress in planning and building regional medical centers, and build up the ranks of rural doctors. We will step up prevention and treatment of major diseases, and continue the projects on enhancing China's ability to diagnose and treat difficult and complicated diseases and on preserving and making new advances in traditional Chinese medicine. R&D on pediatric medications will advance at a faster pace, and the supply of medicines for rare diseases will be better guaranteed. Reform of medical insurance payouts will be furthered, and their composition will be improved. With the emphasis on prevention, we will enhance our capacity to provide public health services and to prevent and treat occupational and endemic diseases. Effective measures will be taken to prevent and control myopia among teenagers; and supplementary childbirth policies will be improved. We will redouble our efforts to improve the long-term mechanism for supervision over vaccines and drugs, and intensify work on strengthening professional ethics and work practices and addressing failures to act in good faith in the healthcare sector. We will take actions to develop model private hospitals, and formulate an action plan on promoting high-quality development of the health industry. We will step up public education on physical and mental health and the management of personal health.
We will take stronger steps to develop urban and rural elderly care facilities, encourage the investment of private and foreign capital in elderly care services, and make a big push to develop elderly care services, particularly at the community level. We will ensure the provision of social services to those most in need, and upgrade service facilities for the elderly, people with disabilities, children living in difficulties, children remaining in rural areas while their parents work in cities, people with mental illness, and other vulnerable groups. We will do more to protect the rights and interests of women, minors, people with disabilities, and other groups. The medium- and long-term plan on population aging will be issued for implementation.
We will develop the Grand Canal cultural belt, and move ahead with major cultural projects such as the restoration and conservation of the Palace Museum, the National Art Museum of China, the China National Arts and Crafts Museum, and the National Library's national archive of strategically important documents. We will do more to see that fine traditional Chinese culture is preserved and carried forward. We will carry out reforms to ensure that China's cultural relics are effectively protected and put to proper use, and step up the protection and restoration of historical and cultural heritage sites. We will see that philosophy and the social sciences flourish, and develop new types of distinctively Chinese think tanks. We will foster a love of reading in our people.
We will support the implementation of phase three of the national general plan for the development of symbolic sites important in early CPC history. We will move forward with the construction of venues for the 2022 Winter Olympics and other sports facilities. We will ensure the success of the International Horticultural Exhibition 2019, Beijing.
We will strictly enforce the accountability system for workplace safety, improve safety-related oversight institutions, and enhance food, drug, and traffic safety.
We will give more support to Hong Kong and Macao in integrating themselves into the overall development of the country, and accelerate the planning and development of the Guangdong-Hong Kong-Macao Greater Bay Area. We will carry out policies and measures to make it easier for Hong Kong and Macao residents to apply for mainland residence permits and to pursue development on the mainland. Roaming rates in the Guangdong-Hong Kong-Macao area will be cut. We will support Hong Kong and Macao in participating in national high-quality economic development and in the new round of high-standard opening up, and strive to see them develop into important regions for China's two-way opening up.
We will support Hong Kong in its efforts to raise its standing as an international financial, shipping, and trade center, promote Hong Kong's cooperation with the mainland in science and technology, and support Hong Kong in developing itself as an international center for innovation in science and technology.
We will support Macao in building itself into a world tourism and leisure center, in serving as a platform for business and trade cooperation between China and Lusophone countries, in building itself as a hub for scientific and industrial development of traditional Chinese medicine, and in developing itself as an exchange and cooperation base where Chinese culture is prevalent and diverse cultures coexist.
We will expand cross-Straits exchanges and cooperation, deepen integrated development between the two sides of the Straits, and continue to implement the 31 measures designed to boost cross-Straits economic and cultural exchanges and cooperation. We will bring forward more policies and measures to benefit our Taiwan compatriots and create conditions for them and their businesses to achieve better development on the mainland.
Accomplishing the work for economic and social development in 2019 is both a demanding and important task. We will unite even closer around the CPC Central Committee with Comrade Xi Jinping at its core, hold high the great banner of socialism with Chinese characteristics, and follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. In line with the CPC Central Committee and the State Council's decisions and plans, we will consciously accept the oversight of the NPC, and seek comments and suggestions from the CPPCC National Committee.
Let us shoulder our responsibilities, fulfill our duties, be self-reliant and hard-working, carry out reform and innovation, tackle tough issues, and promote steady, sound, and sustainable economic and social development, so as to celebrate the 70th anniversary of the People's Republic of China with outstanding achievements.