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Full text: Report on China's economic, social development plan
Posted: March-23-2016Adjust font size:

BEIJING, March 18 (Xinhua) -- Following is the full text of the Report on the Implementation of the 2015 Plan for National Economic and Social Development and on the 2016 Draft Plan for National Economic and Social Development, which was submitted on March 5, 2016 for review at the Fourth Session of the 12th National People's Congress and was adopted on March 16.


Delivered at the Fourth Session of the Twelfth National People's Congress on March 5, 2016

National Development and Reform Commission

Fellow Deputies,

The National Development and Reform Commission has been entrusted by the State Council to submit this report on the implementation of the 2015 plan and on the 2016 draft plan for national economic and social development to the Fourth Session of the Twelfth National People' s Congress (NPC) for your deliberation and also for comments from the members of the National Committee of the Chinese People' s Political Consultative Conference (CPPCC).

I. Implementation of the 2015 Plan for National Economic and Social Development

Last year, China faced a complex international economic environment, mounting downward pressure on its economy, and a marked increase in the number of risks and challenges; despite this, we ensured that the overall implementation of the 2015 Plan for National Economic and Social Development was successful. This was as a result of the efforts of all regions and departments which, under the correct leadership of the Central Committee of the Communist Party of China (CPC) and the State Council, followed the general principle of making progress while keeping performance stable, worked to adapt to the new normal in economic development, earnestly implemented the 2015 plan approved at the Third Session of the Twelfth NPC, acted in line with the review of the plan by the NPC' s Financial and Economic Affairs Committee, and worked steadfastly to achieve good results in all respects. Overall, we managed to sustain steady economic development while also ensuring progress and improvement. Major targets and tasks set forth for 2015 were accomplished, marking a successful conclusion to the 12th Five-Year Plan, and helping China's development move to the next level.

1. We continued to improve our macroeconomic policy and maintained a medium-high rate of growth. We developed new ideas and methods for macro regulation, and on the basis of range-based regulation, we strengthened both targeted and well-timed regulation. Domestic demand became a stronger economic driver, and the international market share of China's exports continued to increase. China's gross domestic product (GDP) reached 67.67 trillion yuan, an increase of 6.9%, meaning the target set at the beginning of the year has been achieved.

1) Investment played the key role in driving economic growth. Strengthening points of weakness and adjusting the economic structure were our primary focus when increasing the level of effective investment. To utilize the construction of major projects to stimulate investment growth, we improved the structure of investment from the central government budget, established and earmarked capital for special development funds, and adopted a wide range of measures to encourage and attract nongovernmental investment. As a result, considerable progress was achieved in the construction of major projects in 11 categories. Total fixed-asset investment for the year rose by 9.8%, of which 64.2% came from nongovernmental sources (excluding rural households).

2) Consumption potential was further exploited. Steady progress was achieved in six major projects aimed at stimulating consumption, and the three trillion yuan investment in these six projects contributed to consumption worth 2.8 trillion yuan. Tourism, online shopping, new-energy vehicles, and other new growth areas in consumer spending continued to grow, and total retail sales of consumer goods for the year rose by 10.7%.

Box 1: 11 Categories of Major Projects for Investment

Box 2: Six Major Projects to Stimulate Consumption

3) The economic structure was further improved. In terms of the contribution to economic growth, consumption far outweighed investment, making a 66.4% contribution, while the tertiary industry accounted for far more than the secondary industry. The value-added of the tertiary industry accounted for over half of GDP for the first time, reaching 50.5%. Development between urban and rural areas and between regions became more balanced and coordinated. The New Urbanization saw positive progress, with permanent urban residents now accounting for 56.1% of the population.

4) The overall employment situation remained stable. New measures to increase employment and business start-ups were introduced, and entrepreneurship and innovation began to make a bigger contribution to increasing employment. An additional 13.12 million urban jobs were created throughout the year. The registered urban unemployment rate stood at 4.05% at the end of 2015.

5) Overall prices rose moderately. The consumer price index (CPI) rose by 1.4%. We intensified oversight in relation to prices and charges and increased law enforcement to combat monopolistic pricing. In total, we investigated and dealt with 34,200 cases of pricing violations and imposed economic penalties totaling 10.477 billion yuan in accordance with the law. Our work in this area also helped reduce the burden on enterprises by about 8.9 billion yuan.

2. We deepened reform and opening up and stimulated market vitality and social creativity. We continued to streamline administration, delegate more powers, improving regulation, and provide better services. Progress was made in reforms in key areas, and the building of new systems for an open economy was accelerated.

1) The reform of the government review and approval system continued. We cancelled the requirement for or delegated the power of government review on 311 items, cancelled all non-administrative review, exempted 214 items from review and approval conducted by local governments on behalf of the central government, and cancelled the requirement for approval and verification of 123 vocational qualifications. Seventy percent of the intermediary services involved in the review and approval practices of State Council bodies were cancelled. The requirement for pre-registration government review and approval on 18 items was cancelled, and these items are now listed as preliminaries that can be prepared by enterprises themselves. For the purpose of streamlining administration and delegating powers, initial steps were taken to establish the three lists and four platforms. Comprehensive steps were taken nationwide to replace the separate business license, organization code certificate, and taxation registration certificate with a unified business license with a unified social credit code. A total of 4.439 million enterprises were registered in 2015, an increase of 21.6%. The provisional regulations on the registration of immovable property were officially implemented.

Box 3: Lists and Platforms for Streamlining Administration and Delegating Powers

2) Fiscal, tax, and financial reforms were steadily pushed forward. We made further improvements to the system of transfer payments to local governments, launched reform of the administration system for tax collection, extended the price-based resource tax to cover more types of resources, and registered steady progress in replacing business tax with VAT. Policies promoting the development of inclusive finance, Internet finance, and private banks were published and implemented, floating limits on interest rates on deposits were abolished, and most controls over interest rates were lifted. The deposit insurance system was officially implemented. The mechanism for determining the central parity of RMB exchange rate was improved, and the RMB was included in the International Monetary Fund' s special drawing rights (SDR) basket. Fresh progress was made in the reform of policy-backed financial institutions and developmental financial institutions. Effective measures were taken to prevent the occurrence of systemic financial risks.

3) The investment and financing systems continued to undergo innovation. We used the public-private partnership (PPP) model and other measures such as granting franchise and subsidizing investment to encourage and guide the involvement of nongovernmental capital in the construction and operation of infrastructure and public utilities. We adjusted and improved the capital contribution requirements for fixed-asset investment projects. We properly adjusted and relaxed corporate bond issuance requirements, and issued new bonds such as project revenue bonds and bonds for eco-friendly initiatives, as well as six special bonds to finance the construction of urban parking lots and underground utility tunnels, the development of strategic emerging industries, the improvement of elderly care services, the building of incubators for entrepreneurship and innovation, and the construction and upgrading of power distribution grids.

4) Price reform was intensified. The guidelines for moving ahead with price reform were published and implemented. Pricing controls over nearly 40 goods and services were either lifted or delegated to lower-level governments. We revised the government pricing catalog, with pricing items being reduced by 80% for the central government and by 55% for local governments. We reduced the price of on-grid electricity from coal-fired power plants and the price of electricity for industry and commerce, and significantly decreased natural gas citygate prices for non-residential users. We improved pricing policies to make them more conducive to energy conservation and environmental protection. We further reviewed and standardized charges related to imports and exports.

Box 4: Price Reform in Key Areas

5) Steady progress was made in the reform of State-owned Enterprises (SOEs) and major industries. Ten pilot projects were launched as part of the reform of SOEs and the number of central government enterprises for which the State-owned Assets Supervision and Administration Commission is the investor was reduced from 112 to 106. We started a new round of structural reform of the electricity industry, began trials to reform the petroleum and natural gas exploration and exploitation system, and systematically promoted the reform of state forestry farms and forestry regions, water conservancy enterprises, rural supply and marketing cooperatives, and state farms on reclaimed land.

Box 5: Reform of SOEs

6) Social reforms were deepened. The mechanism for securing funding for urban and rural compulsory education was improved. Reform of the old age insurance system in Party and government bodies and public institutions was launched. Comprehensive reform of public hospitals was fully implemented in all counties with the reform also being carried out on a trial basis in 100 cities. We worked to ensure that all rural and non-working urban residents who have subscribed to basic medical insurance are also covered by the major disease insurance scheme, and actively promoted the system of tiered diagnosis and treatment. The temporary assistance system was implemented throughout the country. We lowered the premiums for unemployment insurance, workers' compensation, and maternity insurance, which has helped enterprises to reduce annual contributions by over 60 billion yuan. Reform of the system for the use of official vehicles was completed in all organs of the CPC Central Committee and the State Council, this reform was also launched in central government enterprises and public institutions, and its implementation was deepened in local Party and government bodies. Trials to untie industry associations and chambers of commerce from any connections they may have with the government were carried out nationwide. The national park system was implemented on a trial basis in Qinghai and other eight provinces and provincial-level municipalities.

7) The pace to create a new pattern of opening up was accelerated. Guidelines on building new systems for an open economy were issued and implemented. The Vision and Action Plan for Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road (the Belt and Road) was officially published, and progress was achieved in the development of six economic corridors and six channels for communications and distribution with key countries and ports serving as connection hubs*. Direct investments totaling US$ 14.8 billion were made to the countries involved in the Belt and Road Initiative, an increase of 18.2% over the previous year. The guidelines on international cooperation on industrial capacity and equipment manufacturing were released and implemented, and breakthroughs were made in China's rail transit technology and nuclear power "going global" . The Asian Infrastructure Investment Bank was officially established and the Silk Road Fund was put into operation. Guidelines relating to certain policies and measures supporting the development and opening up of major border areas were published. As a result of implementing the revised Catalog for the Guidance of Industries for Foreign Investment, the number of industries in which foreign investment is restricted was cut by 50%, the number of industries in which the amount of foreign investment is limited was reduced by 40%, and over 95% of all foreign investment projects are now only required to be placed on record with relevant authorities. The model for managing foreign debt was transformed so that foreign debt needs only to be registered instead of reviewed and approved. An additional three pilot free trade zones were established in Guangdong, Tianjin, and Fujian, and the China (Shanghai) Pilot Free Trade Zone was extended in area. Free trade agreements with the Republic of Korea (RoK) and Australia were signed respectively, as was the Protocol to Amend the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and the People's Republic of China. Non-financial foreign direct investment totaled US$ 126.3 billion, a year-on-year increase of 5.6%, of which the service sector accounted for over 60%. Non-financial outward direct investment amounted to US$ 118 billion, an increase of 14.7%.

Box 6: International Cooperation on Industrial Capacity and Equipment Manufacturing

3. We continued to pursue innovation-driven development and accelerated the development of new industries and new forms of business. We issued guidelines on deepening structural and institutional reforms and accelerating the implementation of the innovation-driven development strategy, pushed forward pilot reforms for all-round innovation, and devoted great energy to promoting innovation and industrial upgrading.

1) Entrepreneurship and innovation gained momentum. We published and implemented guidelines on certain policies and measures for promoting entrepreneurship and innovation. The Internet Plus action plan was launched and new forms of business continued to emerge in sectors such as big data and E-commerce. Efforts were stepped up to develop support platforms for crowd innovation, crowdsourcing, crowd support, and crowdfunding, with the number of maker spaces in China exceeding 2,300, the number of institutions for demonstrating technology transfer reaching 453, and the total value of the trade in technology reaching almost one trillion yuan. The state seed fund for investment in emerging industries was set up, the public service platforms for small and medium-sized enterprises in 26 provinces were interconnected, and the first National Week for Entrepreneurship and Innovation was held.

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

Box 7: Innovation-Driven Development

2) The transformation and upgrading of traditional industries were accelerated. The Made in China 2025 strategy and the three-year action plan for enhancing the core competitiveness of our manufacturing industries were launched. We advanced major projects in the manufacturing sector aimed at strengthening core competitiveness, promoting industrial rejuvenation, and encouraging technology upgrading. The Chinese-standard EMU trains for which we hold the intellectual property rights rolled off the production line, breakthroughs in the development of a number of sophisticated modern agricultural machines were made, the National Robot Test and Evaluation Center was established, and smooth progress was made in the demonstration and application of Chinese-brand industrial robots. We set up an investment fund for advanced manufacturing, raising 20 billion yuan in the first round of funding, a portion of which came from private investors.

3) Unremitting efforts were made to address the serious problem of overcapacity. In order to curb the expansion of production capacity, we reviewed and reorganized projects that were in violation of relevant regulations, and strictly forbade the registration and construction of new projects in industries that were already burdened with severe overcapacity. Last year we reduced excess production capacity by 13 million metric tons of iron, 17 million metric tons of steel, 38 million metric tons of cement, 300,000 metric tons of electrolytic aluminum, and 11 million weight cases of plate glass. Efforts were stepped up to help turn the coal industry around.

4) New progress was made in the development of strategic emerging industries. The national program for civil space infrastructure was fully implemented; China' s homegrown large passenger aircraft, the C919, rolled off the production line; and the new regional airliner, the ARJ21, was put into service. The BeiDou Navigation Satellite System was widely used, and sectors such as cloud computing, genetic testing, new-energy vehicles, robotics, and mobile Internet experienced rapid development. A number of industries including integrated circuits, marine engineering equipment, and medical equipment started moving toward the high end.

5) Innovation in and development of the modern service industry were accelerated. We issued guidelines on accelerating the development of consumer services and promoting the upgrading of the consumption structure, further lifted restrictions on market access in the service sector, made solid progress in comprehensive pilot reforms in this area, and advanced smoothly the development of integrated experimental zones for cross-border E-commerce. The value-added of the tertiary industry increased by 8.3% over the previous year.

6) Infrastructure networks were further improved. We pressed ahead with the development of comprehensive transportation systems, with the length of transportation lines open to traffic reaching 4.94 million kilometers. China's energy supply capacity was enhanced and its energy consumption structure was improved, with the proportion of non-fossil energy consumption increasing to 12% of total energy consumption, while coal consumption decreased to account for 64% of total energy consumption. The National Broadband Internet Agenda was further implemented and next-generation information infrastructure continued to improve.

Box 8: Major Infrastructure Construction

4. We promoted coordinated development between urban and rural areas and between regions and sped up the formation of new areas of growth, growth poles, and growth belts. Positive headway was made in the implementation of the Three Initiatives (the Silk Road Economic Belt and 21st Century Maritime Silk Road Initiative; the coordinated development of the Beijing-Tianjin-Hebei region; and the development of the Yangtze River Economic Belt), the development of the four regions (the western, northeastern, central, and eastern regions), and the promotion of the New Urbanization, all of which have made a contribution toward creating new space for development.

1) The blueprint for the Three Initiatives produced tangible results. The Belt and Road Initiative got off to a good start. Steady progress was made in the coordinated development of the Beijing-Tianjin-Hebei region, with functions non-essential to Beijing's role as the capital being relocated away from the city in an orderly manner and initial breakthroughs being made in the three key areas of transportation, ecological conservation, and industry. Efforts to develop the Yangtze River Economic Belt were stepped up, with the development of the green, ecological corridor beginning to pick up speed and the comprehensive transportation system being gradually improved.

Box 9: Implementation of the Three Initiatives

2) The development of the four regions became more coordinated. Efforts were increased to accelerate large-scale development in the western region, while effective measures were adopted to respond to the downward pressure on economic development in the northeast. The development of integrated transportation hubs and eco-economic zones in the central region was accelerated. And the eastern region continued to play an exemplary role in carrying out reform and innovation, transforming and upgrading industries, and improving the quality and performance of the economy. In addition, state-level new areas enjoyed sound development.

Box 10: Development of the Four Regions

Box 11: Development of Major Function Platforms

3) The New Urbanization was advanced in an active yet prudent way. Projects to help rural migrant workers become permanent urban residents, to cultivate emerging small and medium-sized cities, and to promote new models of urban development all made smooth progress. Twenty-seven provinces (including autonomous regions and municipalities directly under the central government) as well as the Xinjiang Production and Construction Corps published their guidelines for carrying out reform of the household registration system, and provisional regulations concerning the residence certificate were published and implemented. Steady progress was made in advancing new models of urban development and in the cultivation of emerging small and medium-sized cities. Plans for the development of city clusters were completed for the Yangtze River Delta, and for the Chengdu-Chongqing and Harbin-Changchun regions. We further extended the state comprehensive pilot project for the New Urbanization to two provinces and 135 cities or towns. Positive results were achieved in implementing the reform to replace multiple plans for city (county) development with one master plan.

5. We accelerated the transformation of the agricultural growth model and made solid progress in agricultural modernization. Agricultural and rural development remained steady, and grain output increased for the twelfth consecutive year.

1) Support policies for agriculture were innovated and improved. Investment in agriculture, rural areas, and farmers continued to grow, and for the fifth consecutive year the proportion of funds appropriated for investment in these three areas from the central government budget exceeded 50% of total funds. The program for the review of state funds for agricultural development was successfully completed, and the trials of integrating and optimizing the use of provincial funds for agricultural development were launched. We worked steadily to improve the policy for setting minimum state grain purchase prices and the policy for the temporary state purchase and storage of grain, and solid progress was made in implementing pilot reforms for guaranteeing base prices for cotton in Xinjiang, and for soybean in the northeast and Inner Mongolia. We strengthened regulation over the market for major commodities such as grain, cotton, edible oil, sugar, and chemical fertilizers.

2) Agricultural and rural infrastructure development was further strengthened. Construction on major water conservancy projects was accelerated. We stepped up efforts to upgrade water-saving facilities in medium-sized and large irrigation areas and carried out farmland improvement projects to support the plan to increase China's grain production capacity by 50 million metric tons, while also developing the infrastructure needed for a modern seed industry and expanding the capacity of grain silos. Further progress was made in strengthening rural infrastructure such as roads, housing, and water, power, and methane supply capacity. In order to increase cooperation and connectivity, urban and rural areas moved faster to jointly build and share infrastructure as well as public service facilities. Pilot projects were launched to control pollution from non-point agricultural sources, utilize and protect chernozem soil in the northeast, and improve the management of grassland reclamation areas; and progress was made in the trials for treating heavy-metal pollution on farmland and the over-abstraction of groundwater.

Box 12: Agricultural and Rural Infrastructure Development

3) New strides were made in agricultural structural adjustment. Grain output reached 621 million metric tons, and harvests and production levels remained high for major agricultural products such as meat, egg, milk, fruits, vegetables, tea, and aquatic products. As much as 54% of livestock and poultry farming is now carried out on a large scale; trials to replace grain crop cultivation with feed crop cultivation and to rotate crops between grain and soybean were launched across the board. The overall level of mechanization in plowing, sowing, and harvesting reached 63%, and advances in agricultural science and technology contributed to 56% of agricultural production.

4) Steady progress was achieved in rural reform. Pilot reforms relating to rural land requisition, the marketization of rural collective land designated for business-related construction, and the system of land used for rural housing were carried out in 33 county-level administrative areas; and trials to allow contracted rural land-use rights and farmers' home property rights to be used as collateral to borrow money were implemented in 278 county-level administrative areas. The pilot reform relating to granting shareholder rights for rural collective assets proceeded in an orderly manner. The number of family farms, farmers' cooperatives, leading agricultural enterprises, and other new types of agribusiness amounted to nearly 2.5 million.

6. We intensified efforts to promote ecological progress, and surpassed this year' s targets for energy conservation and environmental protection. Energy consumption per unit of GDP dropped by at least 5.6%, carbon dioxide emissions by at least 6%, sulfur dioxide emissions by 5.8%, chemical oxygen demand by 3.1%, ammonia nitrogen by 3.6%, nitrogen oxide emissions by 10.9%, and water consumption per 10,000 yuan of value-added of industry by 3.9%.

1) Efforts to promote ecological conservation continued to intensify. We promulgated and implemented both the guidelines on accelerating ecological advancement and the integrated reform plan for promoting ecological progress, and continued to ensure the smooth development of pilot demonstration zones for promoting ecological progress. Environmental policies relating to functional zones, the national plan for marine functional zones, and the revised national plan for ecosystem service zones were published and implemented. We expanded the scope of a new round of projects to return marginal farmland to forest or grassland and afforested 6.32 million hectares of land, and the national vegetation fractional coverage of grasslands reached 54%. Efforts were intensified to prevent the expansion of stony deserts and protect wetlands, and integrated measures were taken to bring soil erosion under control on an additional 5.4 million hectares of land.

2) Further progress was made in energy conservation and emissions reduction. A ceiling on total coal consumption was imposed in each major air-polluting city, and the action plan to promote energy conservation and reduce emissions through the upgrading of coal-fired power plants was fully implemented. The pilot demonstration projects to commission a third party to treat pollution, encourage the trading in of old equipment and parts for remanufactured ones, and implement a system for extended producer responsibility were all carried out in an orderly manner. We promoted both the construction of green buildings and the comprehensive utilization of crop straw.

3) An all-out effort was made to address pollution. The average concentrations of fine particulate matter (PM2.5) dropped by 14.1% in the 74 cities where the new ambient air quality standards were first applied last year. More efforts were made to prevent and control water pollution in major water basins and to protect the ecosystems of lakes; as a result, the proportion of surface water with a water quality rating of Grade III or higher has risen to 66%. The pilot demonstration project to treat and restore contaminated soil was launched, and progress was made in trials for the environmental monitoring of contaminated sites.

4) Fresh achievements were made in responding to climate change. The first round of pilot projects for low-carbon cities (towns) were launched, and trials for trading carbon emissions rights were carried out in Beijing, Tianjin, Shanghai, Chongqing, Guangdong, Hubei, and Shenzhen. Our participation and constructive role at the United Nations Climate Change conference in Paris allowed us to put forward China's approach to climate governance and make a contribution toward the adoption of the Paris Climate Agreement.

7. We put greater emphasis on ensuring and improving living standards and made consistent progress in improving people's quality of life. Multiple methods were used to increase investment, strengthen points of weakness, and help those most in need, thereby helping to weave a strong social safety net.

1) The implementation of targeted measures to reduce poverty gathered pace. We launched a number of projects to alleviate poverty, such as relocating people from inhospitable areas, supporting the development of local industries, promoting education and helping to increase health standards in poor areas, and providing support for people seeking employment. The number of people living in poverty in rural areas was reduced by 14.42 million. Greater efforts were made to support the development of the old revolutionary base areas and the revitalization of the former Central Soviet areas including southern Jiangxi. We strengthened support from the central government and pairing assistance programs for underdeveloped localities, and took further steps to promote both the economic and social development and the long-term peace and stability of Xinjiang, Tibet, and Tibetan ethnic areas in Sichuan, Yunnan, Gansu and Qinghai.

2) Personal income increased steadily. Per capita disposable personal income increased by 7.4% in real terms. Rural per capita net income exceeded 10,000 yuan and registered a 7.5% increase in real terms, making it the sixth consecutive year in which the increase in rural per capita net income has surpassed the growth rate of both GDP and urban per capita disposable income. The ratio of urban income to rural income per capita dropped to 2.73:1.

3) Steady progress was made in the area of social security. The number of people covered by basic old-age insurance has reached 858 million. The rate of participation for basic medical insurance stood at over 95% and pension benefits for enterprise retirees continued to rise. The minimum basic pension benefit for rural and non-working urban residents rose from 55 yuan to 70 yuan per month. The annual government subsidy for basic medical insurance covering rural and non-working urban residents was increased from 320 yuan to 380 yuan per person. Work to establish a standardized system to provide basic necessities for people experiencing extreme difficulties began. The system for granting living allowances to people with disabilities who are facing financial difficulties and a caring subsidy to people with serious disabilities was put in place in 20 provinces and provincial-level municipalities, with over eight million people benefiting from the system.

4) Better public services were provided. We continued to improve the basic conditions of badly built and poorly operated schools providing compulsory education in poor areas, launched the plan to strengthen the workforce of teachers in rural areas, and opened up more channels through which students from poor rural areas enter key colleges and universities. The retention rate of nine-year compulsory education reached 93%, while the gross enrollment ratio for senior secondary education reached 87%. We improved the system for community-level medical care services, the prevention and control system for major diseases, and the work to train general practitioners. The per capita government expenditures on basic public health services increased to 40 yuan, with the number of categories of basic public health services increasing to 12. We issued and implemented the national standards to guide the provision of basic public cultural services, and increased support to improve prefecture-level facilities for public cultural services. Significant progress was made in catalyzing innovative development in the sports industry.

Box 13: Provision of Public Services

5) The construction of government-subsidized housing progressed smoothly. We supported government-subsidized housing projects, such as the rebuilding of run-down areas, by increasing central government's budgetary investments and special funding in this area, allocating special development funds, and securing financing through corporate debt issuance. Over the last year, construction began on 7.83 million government-subsidized housing units in urban areas and construction on 7.72 million units was basically completed.

In assessing performance in relation to meeting the targets projected in the plan, overall targets for national economic and social development, such as the economic growth rate, the consumer price index, the balance of payments, and employment levels, remained within the proper range; those targets reflecting economic structure and quality were further improved; targets regarding social development and people's wellbeing maintained positive momentum; and targets related to resource conservation and environmental protection were implemented satisfactorily. Overall, planned targets were well met.

All 18 obligatory targets have been achieved as planned. Of the 41 anticipatory targets, the performance of 35 was in line with or better than expectations, 5 fell short of the projected figures, and there is one target for which the figures are not comparable due to changes in the statistical standards. It should be noted that the anticipatory targets are neither mandatory nor predicted; they are development objectives that the government hopes to achieve and a reflection of the anticipated direction of national development and policy orientation. The actual performance of these targets is objectively decided by the market, and may be higher or lower than the projected figures. The reasons for the discrepancies between the projected figures for some anticipatory targets and the actual performance are as follows: First, in order to reflect the orientation of macro-control policies toward boosting domestic demand, the targets of total retail sales of consumer goods and fixed-asset investment were set slightly higher than the estimated figures. These were targets for us to work toward over the course of the whole year, and as a result, there was a minor difference between the actual performance and the projected figures. The actual increase in the total retail sales of consumer goods basically met the projected target in real terms, but was lower than the target set at the beginning of the year in nominal terms because of imported deflation, the decline in the prices of some domestically manufactured goods, and the limited increase in the prices of agricultural products. In the face of a sluggish international market and insufficient domestic demand, total fixed-asset investment also fell short of the projected figure set at the beginning of 2015. This was due to serious overcapacity in some manufacturing industries; excess supply in the real estate markets of third- and fourth-tier cities; and a sustained fall in the prices of goods for investment as well as other factors. Second, unique factors resulted in the target for spending on R&D being lower than the projected figure. This was due to the increasing downward pressure on economic growth and the continued decline in the profits of enterprises in 2015. In addition, the figure for spending on R&D as a percentage of GDP in 2014 was adjusted statistically from 2.09% at the beginning of the year to 2.05% at the end of the year. These factors meant that the 2015 target for R&D spending as a percentage of GDP was not achieved. Third, changes in the international economic environment caused the yearly figures for some targets to be lower than the projected figures. Under the influence of a slowdown in the growth of world trade and a slump in energy prices on the international market, the growth of total import and export volume was slower than projected. A sharp drop in the prices of major commodities on the global market and the slackening demand for natural gas on the domestic market also meant that natural gas output for last year fell short of the projected target. Finally, the statistical standards for calculating the population using household registration have been adjusted by the competent department, and therefore the actual figure for the percentage of the population registered as urban residents in 2015 is not comparable with the projected figure.

In brief, facing complex situations both at home and abroad, the achievements that China has made thus far in economic and social development have not come easily. They are the result of the correct leadership of the Party Central Committee and the State Council, and the concerted efforts of all regions and departments and the people of all our ethnic groups. Through five years of hard work, the major targets set out in the Twelfth Five-Year Plan for National Economic and Social Development have been successfully completed.

At the same time, we should also be keenly aware that the world economy is still undergoing profound adjustment, the divergence of economies is pronounced, growth of the global economy and trade are sluggish, geopolitical risks are on the rise, the foundation for economic recovery is still weak, and external instabilities and uncertainties are increasing. In this current period of development, China must simultaneously manage the slowdown in economic growth, make difficult structural adjustments, and absorb the effects of previous economic stimulus policies. As the adverse effects of a sustained slowdown in economic growth continue to persist and deep-seated and longstanding problems, especially structural problems, become more serious, the conditions for China's development may become even more complex and the difficulties even more formidable.

First, the downward pressure on China's economy is mounting. The slowdown in the growth of demand is continuing. With international demand remaining weak, the situation in relation to foreign trade has become more challenging and complex. Affected by the persistently low prices of manufactured goods and the rising costs of labor and other factors of production, growth in investment is slow, particularly in the area of manufacturing. As downward pressure on China's economy begins to affect employment and personal income, it may also spread to and affect private consumption.

Second, the difficulties faced by the real economy are building. Having been pressed by insufficient demand as well as a rise in overall costs, the ability of enterprises in some industries to make a profit has decreased, and with losses in some industries increasing the number of enterprises facing difficulty is also rising. This has resulted in layoffs and hidden unemployment within some enterprises and industries.

Third, structural problems are becoming more prominent. Weak effective demand has been coincident with insufficient effective supply, and the transition from the old to the new drivers of growth has been unbalanced. The delayed adjustment of the supply system has resulted in supply-side structural problems becoming more pronounced, and effective supply has not yet adapted to aggregate demand or to changes in the structure of demand, while structural overcapacity is still a significant problem.

Fourth, ecological and environmental problems are still grave. Air pollution remains serious, with the frequent occurrence of heavy smog in some cities and areas. The quality of the water environment is relatively poor and the over-abstraction of groundwater is severe in some regions; while other regions face an arduous task in bringing soil pollution under control. The construction of environmental infrastructure lags behind.

Fifth, challenges and risks in other areas are accumulating and intertwining. The growth of government revenue is slowing down; the imbalance between revenue and expenditures is becoming more pronounced; and there are risks and hidden dangers in local government debt. The amount and ratio of non-performing loans reported by banks have increased; the debt ratios of enterprises are also rising; illegal fund-raising is becoming more frequent; and hidden financial risks are mounting. At the same time, there are also new problems to be addressed in relation to workplace safety and the people's well-being.

We must attach great importance to these issues, carry out a full evaluation of the difficulties and challenges that have arisen as a result of downward pressure on the economy, and become more aware of potential dangers and the bottom line. We need to maintain our strategic focus while taking timely steps to undertake early warning initiatives, formulate contingency plans, and exercise anticipatory regulation; such measures will ensure that we can respond effectively to these problems and resolve them.

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Source: Xinhua 2014-3-17Editor: tracyliu
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