Key takeaways of 2023 China government work report
With the term of Premier Li Keqiang coming to a close and new central government leadership to be decided, China has entered a political season this March.
With the term of Premier Li Keqiang coming to a close and new central government leadership to be decided, China has entered a political season this March. Looking ahead, this country still faces many difficulties and challenges.
What are the key recommendations from the outgoing Li? What are the priority tasks for the national legislators and political advisors to deliberate and discuss?
This quick review of the government work report delivered by Premier Li Keqiang at the annual meeting of the national legislature sheds light on the answers that are significant to China and the world at large.
Other targets include:
growth in personal income that is generally in step with economic growth
steady increases in both the volume and quality of imports and exports
a basic equilibrium in the balance of payments
continued reductions in energy consumption per unit of GDP and in the discharge of major pollutants, with priority on controlling fossil fuel consumption
steady improvements in the quality of the eco-environment
While recognizing its achievements, China is keenly aware that it is still a large, developing country. It remains in the primary stage of socialism with prominent imbalances and inadequacies in its development.
Many difficulties and challenges still confront the country, including as follows:
"Uncertainties in the external environment are on the rise. Global inflation remains high, global economic and trade growth is losing steam, and external attempts to suppress and contain China are escalating. At home, the foundation for stable growth needs to be consolidated, insufficient demand remains a pronounced problem, and the expectations of private investors and businesses are unstable."
"MSMEs and self-employed individuals face multiple difficulties in business and production operations. The task of maintaining employment stability is challenging, and the budgetary imbalances of some local governments are substantial. There are many risks and hidden dangers in the real estate market. The operating risks of some small and medium financial institutions have been exposed."
"There are still many institutional barriers hindering development. Our capacity for scientific and technological innovation needs to be further improved. We still have a long way to go in protecting the environment. There are still major weak links in urban and rural infrastructure for disaster prevention and mitigation and other purposes. Weak links also persist in areas important to the people’s lives."
"Pointless formalities and bureaucratism remain acute issues. Some local governments have used one-size-fits-all approaches or taken excessive measures when implementing policies. Some officials fail to fulfill their duties, act arbitrarily, or have a narrow focus in work. Some are detached from reality, go against the public will, or disregard the legitimate rights and interests of the people. Corruption remains a common problem in some fields, sectors, and localities. Regarding government work, the people have expressed some views and suggestions which deserve our full attention."
SUMMARY OF POLICY MANEUVER
To cope with the challenges, the report calls for prioritizing economic stability and pursuing progress while ensuring stability.
Specific measures are as follows:
"Policies should be kept consistent and targeted, and they should be carried out in more coordinated way to create synergy for high-quality development. We should enhance the intensity and effectiveness of our proactive fiscal policy. A deficit-to-GDP ratio of 3 percent has been projected for this year. We should improve preferential tax and fee policies, and extend and further refine policies on tax and fee cuts, tax rebates, and tax deferrals as the situation requires. We should see that at the primary level, basic living needs are met, salary payments are ensured, and normal government functioning is maintained."
"We should do more to implement a prudent monetary policy in a targeted way. The M2 money supply and aggregate financing should increase generally in step with nominal economic growth to provide support for the real economy. The RMB exchange rate should be kept generally stable at an adaptive, balanced level."
"In adopting industrial policies, we should give consideration to both development and security imperatives. We should promote the transformation and upgrading of traditional industries, cultivate and strengthen strategic emerging industries, and take forceful steps to shore up weak links in industrial chains."
"Scientific and technological policies should aim at building up our country’s strength and self-reliance in science and technology. The new system for mobilizing resources nationwide should be improved, we should better leverage the role of the government in pooling resources to make key technological breakthroughs, and enterprises should be the principal actors in innovation."
"Social policies should meet basic living needs. To effectively ensure people’s basic wellbeing, we should take concrete measures to fully implement the employment-first policy and place a higher priority on promoting the employment of young people, particularly college graduates."
The report outlines eight aspects demanding unremitting efforts.They are as follows:
Expanding domestic demand
"We should give priority to the recovery and expansion of consumption. The incomes of urban and rural residents should be boosted through multiple channels. We should stabilize spending on big-ticket items and promote recovery in consumption of consumer services. We should see that government investment and policy incentives effectively drive investment society-wide.
It is proposed that 3.8 trillion yuan be allocated for special-purpose bonds for local governments this year. Implementation of major projects set out in the 14th Five-year Plan will be sped up. Urban renewal projects should also be launched.
We should promote complementary development between regions and see that each region fully leverages its strengths. We should encourage and attract more private capital into major state projects and projects aimed at addressing areas of weakness in order to stimulate private investment."
Accelerating the modernization of the industrial system
"We should, with a focus on key industrial chains in the manufacturing sector, pool quality resources and make concerted efforts to achieve breakthroughs in core technologies in key fields.
We should redouble efforts to explore and develop important energy and mineral resources, discover more reserves, and boost production. We should speed up the digitalization of traditional industries and SMEs to make them higher-end, smarter, and more eco-friendly. R&D and application of cutting-edge technologies should be accelerated. We should improve the modern logistics system. We should strive to develop the digital economy, step up regular oversight, and support the development of the platform economy."
Unswervingly consolidating and developing the public sector and unswervingly encouraging, supporting, and guiding the development of the non-public sector
"We should deepen reform of state-owned capital and SOEs and enhance the core competitiveness of SOEs. We should continue with a category-based approach to reform and see that SOEs fulfill both their economic and social responsibilities and that they improve their modern corporate governance with distinctive Chinese features.
We should, in accordance with the law, protect the property rights of private enterprises and the rights and interests of entrepreneurs. We should encourage and support the private sector and private businesses in growing and expanding and support MSMEs and self-employed individuals in business development.
We should cultivate a cordial and clean relationship between government and business and create an environment in which enterprises under all forms of ownership can compete and grow on a level playing field. Effective measures and policies should be rolled out to boost market expectations and confidence."
Intensifying efforts to attract and utilize foreign investment
"We should expand market access and continue to open up the modern services sector. We should ensure national treatment for foreign-funded companies.
We should take active steps to see China join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and accede to other high-standard economic and trade agreements, and steadily expand institutional opening up by proactively adopting relevant rules, regulations, management, and standards. We should continue to leverage the role of imports and exports in driving economic growth. We should improve services for foreign-funded companies and facilitate the launch of landmark foreign-funded projects.
With a vast and open market, China is sure to provide even greater business opportunities for foreign companies in China."
Effectively preventing and defusing major economic and financial risks
"We need to deepen reform of the financial system, improve financial regulation, and see that all those involved assume their full responsibilities to guard against regional and systemic financial risks. We should ensure effective risk prevention and mitigation in high-quality, leading real estate enterprises, help them improve debt-to-asset ratios, and prevent unregulated expansion in the real estate market to promote stable development of the real estate sector.
To prevent and defuse local government debt risks, we should improve the mix of debt maturities, reduce the burden of interest payments, and prevent a build-up of new debts while working to reduce existing ones."
Stabilizing grain output and advancing rural revitalization
"We should keep total grain acreage at a stable level, promote the production of oilseed crops, and launch a new drive to increase grain production capacity by 50 million metric tons. We should improve contingency plans for ensuring the provision of agricultural supplies at stable prices. We should ramp up the development of high-standard cropland, facilities for irrigation and water conservancy, and other agricultural infrastructure. We should invigorate the seed industry and support the development of agricultural science, technology, and equipment.
Rural industries with local features should be fostered to create more channels for increasing rural incomes. Our achievements in poverty alleviation should be consolidated and expanded to prevent large-scale relapse into poverty. Rural development initiatives should be advanced. We must meticulously and effectively carry out work related to the extension of rural land contracts for an additional 30 years."
Continuing the transition to green development
"Pollution prevention and control should be intensified. We should improve urban-rural environmental infrastructure and continue to implement major projects for protecting and restoring key ecosystems. We should promote R&D for the clean and efficient use of coal and move faster to develop a new energy system."
We should improve policies for green development, develop the circular economy, promote efficient and intensive use of resources, advance energy conservation and carbon reduction in key areas, and continue working to keep our skies blue, waters clear, and lands clean."
Meeting people’s basic living needs and developing social programs
"We should improve the housing support system, support people in buying their first homes or improving their housing situation, and help resolve the housing problems of new urban residents and young people.
We should promote high-quality, balanced development and urban-rural integration of compulsory education, intensify efforts to develop vocational education, and continue to explore new ground in higher education. We should see that more quality medical resources are channeled toward the community level and more evenly distributed among regions.
We need to improve elderly care services and refine supporting policies on childbirth. We should protect the legitimate rights and interests of women, children, the elderly, and people with disabilities. We should see that service members and their families, ex-service members, and other entitled groups receive the benefits and subsidies they are entitled to.
We should develop cultural programs and the cultural sector. We should work to make social governance more effective. Workplace safety supervision should be strengthened, and disaster prevention, mitigation, and relief efforts should be bolstered.
We should fully apply a holistic approach to national security and advance the Peaceful China Initiative to a higher level."
The report also stresses that China has entered a phase of regular Covid response that should be well-conceived, more targeted and more effective. The elderly, children and people with underlying medical conditions should be better protected while the development of new drugs and the supply of medicines should be ensured.
Good summary. Very useful! Thank you.