Report on the Work of the Government (4)

 

    3. Promoting economic adjustment and changing the pattern of development.

    We will continue to boost domestic demand, adjust the balance of investment and consumption, and promote the shift from the pattern of economic growth that relies mainly on investment and exports to one that relies on a balanced combination of consumption, investment and exports. It is essential to appropriately control the scale of fixed asset investment and improve the investment structure. We will maintain strict control over the availability of land, credit and market access, and pay particular attention to strengthening and standardizing supervision of new projects to ensure they meet all the conditions for launching. Haphazard investment and unneeded development projects in energy intensive and highly polluting industries and industries with excess production capacity will be resolutely stopped, and market access will be tightened and capital requirements will be increased for industries whose development is discouraged. Work on illegal projects will be resolutely stopped. We will increase support for weak links and key areas in economic and social development and give more support to the central and western regions. We must tighten control over the amount of land used for development projects, especially for industrial purposes, and hold the total amount of land used this year to last year's level. We must respond to new conditions and situations by improving guidance, regulation and oversight for all types of investment activities in the country.

    We will continue to promote independent innovation as the central link in efforts to change the pattern of development. We need to diligently implement the Outline of the National Program for Long- and Medium-Term Scientific and Technological Development and fully launch and implement key national projects, including those to develop large aircraft, control pollution in bodies of water, and develop large-scale oil and gas fields and coal seam gas operations. We will carry out plans for basic research, high-tech research, and research to provide scientific and technological support for development. We will work to make major breakthroughs in key technologies for producing vehicles powered by new energy sources, developing high-speed railway transport and saving water in industries. We will promote development of the national innovation system, focusing on building a number of national laboratories, national engineering centers, and platforms to support enterprise innovation and enterprise technology centers to strengthen China's science and technology infrastructure. We will deepen reform of the management system for science and technology and coordinate and improve resource distribution. The central government will spend 113.4 billion yuan on science and technology in 2008, a year-on-year increase of 13.4 billion yuan. We will improve and implement the policy to support independent innovation, get enterprises to fully play their role as the main parties responsible for technological innovation, and encourage and guide them to increase investment in R&D. We will integrate the efforts of enterprises, universities and research institutes and develop innovative enterprises. Government procurement of products produced through independent innovation will be increased. Trials in the use of venture capital will be expanded. We will implement the intellectual property rights strategy. We will expand scientific and technological cooperation with other countries.

    We will promote improvement and upgrading of the industrial structure. We will keep to the new path of industrialization with Chinese characteristics and promote integration of IT application with industrialization. We will work to develop new- and high-technology industries, reinvigorate the equipment manufacturing industry, upgrade traditional industries and accelerate the development of service industries, particularly modern services. We will continue the major projects to apply high technologies in the production of new-type displays, broadband communications and network equipment, and biomedicine. We will get national new and high technology development zones to fully play their role in pooling resources, guiding development and boosting development in surrounding areas. We will promote domestic R&D and production of important equipment and key spare parts and components, with the focus on key areas such as large clean and highly efficient power generating units, high-grade digital machine tools and basic manufacturing equipment. We will give higher priority to geological work to improve prospecting for and exploitation of natural resources. We will strongly develop the modern energy and raw materials industries and better integrate the transportation system.

    We will promote balanced development among regions. We will extensively promote the large-scale development of the western region, and launch a number of key projects and support the development of key areas on a priority basis. We will continue to protect natural forests, prevent and control desertification, and reverse and prevent the development of stony deserts, and will implement a follow-up policy to consolidate progress made in converting retired farmland to forests. We will implement the plan to reinvigorate northeast China, and support the development of advanced equipment manufacturing and modern agriculture and the economic transformation of areas depending on resources that are now exhausted. We will formulate and implement a plan to boost development of the central region and implement and improve relevant policies. We will encourage the eastern region to lead the country in development and improve its international competitiveness. We will give more support to old revolutionary areas, ethnic minority areas, border areas and poor areas to help them develop. We will adopt and implement a plan and policy for development priority zones.

    4. Increasing efforts to conserve energy, reduce emissions and protect the environment, and ensuring product quality and safety.

    This year is crucial for meeting the obligatory targets for energy conservation and emissions reduction set forth in the Eleventh Five-Year Plan, and we must increase our sense of urgency and intensify efforts to make greater progress.

    First, we will implement the plan to close down backward production facilities in the electricity, steel, cement, coal and papermaking industries. We will also put in place a mechanism for closing down these facilities and improve and implement support policies and measures for shutting down enterprises. In addition, we will step up efforts to develop advanced production facilities in these industries in accordance with the plan.

    Second, we will focus on energy conservation in key enterprises and construction of key projects. We need to accelerate work on the ten major energy conservation projects. We will increase the urban sewage treatment capacity and strive to reach the goal of 100% collection and treatment of sewage in 36 large cities within two years. Charges for discharging wastewater and for sewage treatment and garbage disposal will be appropriately raised. Building standards will be upgraded and strictly enforced to encourage the development of better wall materials and construction of energy-efficient buildings. We will make steady progress in reforming the urban heating system and public utilities.

    Third, we will develop and apply advanced and appropriate technologies to save, replace and reuse resources and control pollution, and carry out projects to develop and demonstrate major energy conservation and emissions reduction technologies. We will energetically develop the energy conservation service industry and the environmental protection industry. We will develop clean and renewable energy sources such as wind power and solar energy.

    Fourth, we will prevent and control pollution in key river valleys and regions, including the Huai, Hai, Liao and Songhua rivers, Tai, Chao and Dianchi lakes, the sources and routes of the South-to-North Water Diversion Project, and the Three Gorges Reservoir area. We will implement the master plan for protecting the environment of the Bohai Sea. National standards will have stricter limits for discharge of pollutants in key river valleys.

    Fifth, we will intensify protection of rural drinking water sources, and work to control sewage and garbage pollution and industrial pollution in rural areas. We will also strengthen control of pollution from livestock and poultry farming and aquaculture as well as agricultural nonpoint source pollution.

    Sixth, we will encourage and support the development of a circular economy and promote recycling and reuse of renewable resources. We will also promote cleaner production in all industries.

    Seventh, we will strengthen efforts to protect, conserve and intensively use natural resources, including land, water, grasslands, forests and minerals, and take stern measures to combat illegal mining of mineral resources. We will effectively protect marine resources, use them wisely, and develop the marine economy. We will intensify China's basic research efforts in meteorology, earthquake science, and surveying and mapping to strengthen these areas.

    Eighth, we will implement the national plan to respond to climate change to strengthen China's ability to respond to climate change.

    Ninth, we will improve the mechanism for rewarding those who conserve energy and resources and protect the environment and punishing those who waste energy and resources and harm the environment. We will also employ statistical and monitoring systems for conserving energy and reducing emissions, and improve the auditing and supervision systems, increase law enforcement efforts, and tighten the accountability system for energy conservation and emissions reduction.

    Tenth, we will enhance public awareness of the importance of a culture of conservation and encourage the entire nation to participate in building a resource-conserving and environmentally friendly society. Resource conservation and environmental protection must continue from generation to generation to make our mountains greener, waters cleaner and skies bluer.

    We will intensify efforts to ensure product quality and safety.

    First, we will accelerate efforts to formulate or update national standards for product quality and safety. This year, we will complete the formulation or updating of more than 7,700 national standards for the safety of food products, drugs and other consumer goods to put in place a sound system of standards for product safety. All requirements and testing methods for the safety and quality of food and other consumer goods will comply with international standards. China's exports will meet both international standards and the laws and regulations on technical standards of the importing countries.

    Second, we will improve legal guarantees for product quality and safety. We need to promptly enact or revise laws and regulations pertaining to product quality and safety, and improve the mechanism for effectively coordinating administrative law enforcement and criminal justice to increase punishment for enterprises that violate such laws and regulations. Third, we will improve the oversight and control systems for product quality and safety. We will follow to the letter the regulations for issuing production permits and mandatory certificates and for registration and record keeping to strictly control market access. We will raise the requirements for production permits and tighten market access for products related to people's health and safety. We need to strengthen quality and safety oversight for essential products such as food and drugs, and strictly control the quality of exports and imports. We will diligently follow the accountability system for product quality and safety. It is imperative that the people feel confident about the safety of food and other consumer goods and that our exports have a good reputation. 

   5. Deepening economic reform and opening wider to the outside world.

    It has been 30 years since China introduced the reform and opening up policy, which has brought about great historic changes to the country. However, China is still in the primary stage of socialism and will remain so for a long time to come. To further promote unfettered development of the productive forces, promote greater social fairness and justice, and attain the magnificent goals of building a moderately prosperous society in all respects and modernizing China, we must continue to unswervingly implement the reform and opening up policy. We will concentrate on the following areas this year.

    We will advance the reform of SOEs and improve their ownership structure. We will continue to adjust state-owned assets and reorganize SOEs. We need to deepen the reform to convert SOEs into stockholding corporations. We will improve corporate governance, carry out policy-mandated closures and bankruptcies, separate SOEs' secondary businesses from their core businesses, and convert the former into independent companies. We will expand the experiment of setting up a budget system for managing state capital. We will deepen the reform of monopoly industries by introducing competition and strengthening government regulation and public oversight of them. We need to strictly standardize procedures for transforming SOEs into stock companies and for transferring ownership of state-owned assets to prevent their erosion. We will protect the legitimate rights and interests of workers. We will advance the reform of collectively owned enterprises and develop diverse forms of collective and cooperative economic operations. We will conscientiously implement the policies for encouraging, supporting and guiding the development of individual-proprietorship businesses and private companies in the nonpublic sector of the economy. In particular, we will help them solve problems related to market access and financial support.

    We will deepen reform of the fiscal and taxation systems and accelerate improvement in the public finance system. We will reform the budget system and tighten budgetary management and oversight. We need to improve and standardize the system of transfer payments, raise the volume and proportion of general transfer payments and increase spending on public services. We will energetically push ahead with the reform of fiscal systems at and below the provincial level. The new Law on Corporate Income Tax will be comprehensively enforced. We will reform the system of resource taxes and fees, and improve the compensation systems for use of resources and for damage caused to the ecosystem. We will carry forward the trial VAT reform and formulate a plan to carry out the reform nationwide.

    We will speed up reform of the financial system and strengthen financial oversight. We will continue deepening reform of the banking industry, focusing on the introduction of a shareholding system in the Agriculture Bank of China and the reform of the China Development Bank. A deposit insurance system will be set up. We will accelerate rural financial reform and strengthen the role of the Agriculture Bank of China, the Agricultural Development Bank of China and the China Postal Savings Bank in serving agriculture, rural areas and farmers. We will continue to deepen the reform of rural credit cooperatives and actively promote the development of new types of financial institutions in rural areas. We will improve the structure of the capital market, promote steady and sound development of the stock markets, strive to improve the performance of listed companies, and maintain an open, fair and equitable market environment. We will establish a market for growth enterprises, accelerate development of the bond market and steadily develop the futures market. We will deepen reform of the insurance industry, vigorously extend the scope of agricultural insurance, and successfully carry out trials of policy-supported agricultural insurance. We will take stern measures to combat violations of financial laws and regulations and guard against and defuse financial risks to maintain financial stability and security.

    We will expand the breadth and depth of China's openness and make its economy more open. We will accelerate change in the pattern of foreign trade growth, improve the mix of exports, encourage the export of products with Chinese intellectual property rights and trademarks, and raise the quality, grade and added value of exports while maintaining steady export growth. We need to increase export of services and encourage foreign businesses to outsource services to China. We will energetically increase imports, with the focus on advanced technology and equipment, important raw materials, and key spare parts and components. We will improve the mix of industries using foreign investment and their geographic distribution, and steadily make service industries more open. We will limit or ban foreign investment in projects that are energy intensive or highly polluting, limit or ban foreign investment in some areas of resource exploitation, and correct illegal practices for attracting foreign investment. We will make innovations in the way we make investments and engage in cooperation overseas, and improve and implement policies and measures to support Chinese enterprises wishing to "go global." We will strengthen bilateral, multilateral and regional economic cooperation. We will continue to promote talks on free trade zones and honor the treaties we have signed. We are committed to an equitable international trade order.

    In carrying out reform and opening up, we will accelerate the development of a modern market system, energetically develop modern logistics, intensify efforts to ensure orderly markets and promote the development of a credit system for individuals. 

    6. Paying closer attention to social development to ensure the wellbeing of the people and improve their lives.

    We will continue to give priority to developing education.

    First, we will make free compulsory education universally available in both urban and rural areas. We will continue increasing regular expenditures for rural compulsory education and raise the level of budgetary allocations. We will appropriately increase living allowances for poor rural students residing on campus. We will take steps to ensure that children from poor families and children of rural migrant workers in cities enjoy the same access to compulsory education as others. After running trials in selected areas, we will completely stop collecting tuition and miscellaneous fees from all urban students receiving compulsory education starting this fall. This is another major measure for promoting balanced development of compulsory education and equal access to education.

    Second, we must vigorously develop vocational education. We will strengthen the basic conditions for vocational education and deepen reform of the systems for administering, running and investing in vocational education programs in order to turn out high-quality skilled personnel.

    Third, we must raise the quality of higher education. We will improve the structure of academic disciplines and develop high-quality universities and key disciplines. Regular institutions of higher learning will continue to favor students in the central and western regions in expanding their enrollments. To successfully provide education of various kinds and at different levels, we must focus on the following three tasks. One, we must ensure that all students receive a well-rounded education, and promote educational reforms and innovations. We will deepen the reform of curricula, methods of instruction, the systems of examination and enrollment, and the system for evaluating educational quality, and lighten the study load of primary and secondary school students. Two, we must improve the quality of teachers, especially in rural areas, and improve and implement the system of wages, allowances and subsidies for teachers. Three, we must increase investment in education. This year, central government allocation for education will increase from last year's total of 107.6 billion yuan to 156.2 billion yuan, and local governments will also increase their spending. We will further standardize the collection of education-related fees. We will standardize nonpublic education programs and encourage their development. China cannot modernize if education is not made universally available and if its quality is not improved. We must ensure that our children receive a good education, provide education that satisfies the needs of the people and improve the overall quality of the population.

    We will promote the reform and development of health care. Efforts will be focused on four areas:

    First, we will accelerate the establishment of a system to ensure access to medical care for both urban and rural residents. We will expand the number of urban workers covered by basic medical insurance, and extend the trial of basic medical insurance for urban residents to over 50% of China's cities. We will fully implement the new type of rural cooperative medical care system in all rural areas. Within two years, we will raise the standard for financing from 50 yuan to 100 yuan per person per year, with central and local government contributions to be raised from 40 yuan to 80 yuan per person. We will improve the urban and rural assistance program for medical care.

    Second, we will improve the public health service system. We will prevent and treat major diseases, implement policies and measures to increase the number of diseases covered in the state plan for immunization against communicable diseases, and provide free treatment for more people suffering from diseases such as AIDS, tuberculosis and schistosomiasis. We need to work harder to prevent and treat endemic, occupational and mental diseases. We must do a good job in work related to the health of women and children. We will implement a policy of granting allowances to rural women in the central and western regions giving birth in hospitals. We will improve the mechanism for ensuring adequate funding for public health services.

    Third, we will continue development of the medical service systems for urban and rural areas. We will focus on improving the county, township, village three-tier rural health service network and the urban community-based medical and health service system. We will train more general practitioners, nurses and rural doctors and encourage high-caliber health workers to work in village and community clinics. Trial reform of public hospitals will be carried out. Measures will be formulated and implemented to support the development of traditional Chinese medicine and the folk medicines of ethnic minorities.

    Fourth, we will set up a national system for basic drugs and a system for ensuring drug supply to ensure the quality and adequate supply of basic drugs and hold down prices. This year the central government will allocate 83.2 billion yuan to support the reform and development of health care, an increase of 16.7 billion yuan over last year, with the focus of spending on facilities at the urban community and village level.

    Last year the State Council commissioned a study of the issue of how to deepen reform of the system of pharmaceuticals and health care. A preliminary plan has been produced and will soon be publicized to solicit opinions from the general public. The basic goal of the reform is to maintain the public service nature of public medical and health care services and set up a basic medical and health care system to provide people with basic medical and health care services that are safe, effective, convenient and affordable. We must resolutely carry out this reform to provide everyone with access to basic medical and health services and improve their health.

   We will improve work related to population and family planning. We will adhere to the current policy of family planning, keep the birthrate low, improve the health of newborns and adopt a full range of measures to address the gender imbalance in babies. We will fully implement the special assistance system for families that comply with family planning regulations, extend the coverage of the reward system for rural families that comply with the regulations, implement the "lower birthrate equals faster prosperity" project in more areas, and raise the level of rewards and assistance. We will improve services for the floating population and tighten supervision of them to ensure that they comply with the family planning policy.

    We will attach great importance to programs for the elderly, effectively protect the rights and interests of women and minors, and show concern for people with physical and mental disabilities and support programs benefiting them.

    We will strive to expand employment. We will strictly enforce the Employment Promotion Law and the Labor Contract Law. We will continue to follow a vigorous employment policy, adhere to the principle of expanding employment by encouraging business startups, strengthen job training and training in how to start a business, encourage people to find jobs on their own or start their own businesses, and support the establishment of small enterprises. We will speed up development of a human resources market with uniform standards for both urban and rural areas, improve the public employment service system, and promote the creation of an employment system that treats urban and rural workers equally. We will strengthen job placement guidance and services for college graduates. We will deepen reform of the job-placement system for people leaving military service. We will improve the aid system for job seekers, carry out policies to find more jobs for people with physical and mental disabilities, and create a permanent mechanism to help zero-employment families find jobs. We will urge all types of enterprises to sign labor contracts with their employees in accordance with the law and abide by them. We will improve the handling of labor disputes and oversight for worker protection measures and severely punish illegal employment practices. Providing adequate employment opportunities in China, which has the largest population in the world, is a daunting challenge. We must redouble our efforts to increase employment, a matter that is crucial to people's well being.

    We will increase urban and rural incomes. The key is to adjust the distribution of the national income, deepen reform of the income distribution system, gradually raise the proportion of the national income received by individuals and raise labor's of the primary distribution of income.

    First, we will increase rural incomes through a variety of channels, ensure that rural migrant workers in cities get paid in full and on time, and appropriately increase allowances for the poor population.

    Second, we will raise the wage scale for enterprise employees and create a mechanism to ensure they get regular wage increases and ensure that they are paid regularly. We will urge enterprises to establish a system for collective bargaining for wages, improve the system of wage guidelines, and improve and comply with the minimum wage system. We will reform the method of supervising SOE payroll and strengthen oversight of wages paid by enterprises in monopoly industries.

    Third, we will raise the level of basic old-age benefits for retirees from enterprises every year for three years beginning Jan. 1 this year.

    Fourth, we will deepen reform of the salary system for civil servants and continue efforts to standardize their subsidies and allowances. We will accelerate reform of the income distribution system in government-affiliated institutions. Fifth, we will institute a system of annual paid vacations for employees. In addition, we will further improve consumption policies, broaden the range of services available in the market, stabilize consumer expectations and increase immediate consumption. Only by appropriately spreading the fruits of economic development among the people can we win their support and maintain social harmony and stability.

    We will improve the social safety net. We will follow a policy of expanding the number of people covered, guaranteeing people's basic needs and pursuing multi-level and sustainable development of the system.

    First, we will expand the number of people covered by the social security system and improve collection of contributions to insurance funds. The focus of efforts will be on extending coverage to more rural migrant workers in cities, employees in the nonpublic sector of the economy and urban residents without fixed employment. Efforts will be made to provide basic medical insurance for retirees from closed or bankrupt enterprises and employees of enterprises with financial difficulties.

    Second, we will push ahead with the reform of the social security system. We will improve the system of basic old-age insurance for enterprise employees, combining contributions from various sources in society with personal employee retirement accounts, and expand the trial of fully funding personal accounts for old-age insurance. In addition, we will accelerate the implementation of overall planning for old-age pensions at the provincial level and work out nationwide rules for transferring social security accounts from one region to another. We will standardize and expand enterprise retirement systems that pay annuities. We will explore ways to reform basic old-age insurance in government-affiliated institutions. We will soon work out an old-age insurance system suitable for rural migrant workers in cities, and encourage local governments to carry out experiments with a rural old-age insurance system. We will accelerate improvement in unemployment insurance, workers' compensation and maternity insurance.

    Third, we will finance social security funds in various ways, strengthen their oversight, ensure their security and maintain and increase their value.

    Fourth, we will improve the social assistance system. We will focus on improving the systems of basic cost of living allowances for both urban and rural residents and setting up a mechanism for adjusting the level of assistance in line with economic growth and price changes. We will improve the temporary assistance system, vigorously develop social welfare programs and encourage and support the development of charity programs. We will do a good job providing assistance to entitled groups and helping demobilized military personnel return to civilian life. We will improve the work of disaster prevention, reduction and relief. A total of 276.2 billion yuan will be appropriated this year in the central government budget to accelerate development of the social security system, 45.8 billion yuan more than last year. Establishing a sound social safety net for both urban and rural residents to ward off uncertainties for them has a direct impact on economic and social development and is a major task in the effort to build a moderately prosperous society in all respects.

    We will promptly establish a system for ensuring housing for people. The general guiding principles for this work are as follows. 1) Taking into consideration the fact that China has a large population and relatively little land available for building housing, we need to foster a scientific and rational model for housing development and home ownership. We will vigorously work to build environmentally friendly buildings that conserve energy and land, increase the supply of small and medium-sized condominiums, and guide people to obtain housing they can afford. 2) We must ensure that the government and the market both play their due roles. The government's role is mainly to formulate plans and policies for housing and ensure that there is an appropriate supply of land, ensure that land is used intensively and oversee land use. Priority will be given to development of housing for low- and middle-income families. Demand for housing among high-income families will be met largely through the market. 3) We need to strengthen regulation and oversight of the real estate market, standardize and maintain order in the market and promote sustained, steady and healthy development of the real estate industry.

    The following four measures will be adopted this year:

    First, we will improve the system of low-rent housing, accelerate construction of low-rent housing, expand the supply of housing, and step up construction and tighten management of affordable housing to ease the housing difficulties of low-income urban residents. A total of 6.8 billion yuan will be allocated from the central government budget for the low-rent housing program this year, 1.7 billion yuan more than last year, and local governments will also increase funding in this area. In addition, we will work energetically to improve the living conditions of rural migrant workers in cities.

    Second, we will increase the supply of low- and medium-price, small and medium-sized condominiums, establish a mechanism for making investments and raising funds in various ways, and help middle-income families meet their housing needs through a variety of channels. We will improve the supply structure of urban land to provide more land for building small and medium-sized condominiums.

    Third, we will use a combination of tax, credit and land supply measures and improve the housing accumulation fund system to increase supply of reasonably priced housing, curb demand for high-end housing and prevent overheating in housing prices. Fourth, we will strengthen market oversight and strictly enforce the requirements for market access and the conditions for going out of business for real estate firms. We will investigate attempts to control the land and housing market through hoarding and speculation in land and housing and deal with violations in accordance with the law. In addition, we will improve planning and management of rural housing development and the safety of housing for the rural poor. We must unswervingly promote reform of the housing system and construction of housing for the benefit of the people.