SUPPLY-SIDE structural reform will be given priority in China’s development, Premier Li Ke-qiang said while delivering a government work report at the opening meeting of the Fifth Session of the 12th National People’s Congress (NPC), China’s top legislature, in Beijing yesterday.

    According to the report, efforts will center on a variety of areas, including streamlining administration, reducing taxes, further expanding market access, and reducing ineffective supply while expanding effective supply.

    Comparing the reform as “the struggle from chrysalis to butterfly,” Li said China must press forward with courage and get the job done.

    To be specific, China will further reduce steel production capacity by around 50 million metric tons and coal capacity by at least 150 million metric tons this year, the report said.

    It also highlighted cutting excess urban real estate inventory, bringing down the leverage of enterprises, reducing costs for enterprises and strengthening areas of weakness including poverty eradication.

    National security

    China will strengthen its maritime and air defense as well as border control amid efforts to safeguard its sovereignty and security, according to the government work report delivered by the premier.

    The country will continue to deepen military reforms, while upholding the absolute leadership of the Communist Party of China over the armed forces, Li said.

    It will ensure the organization of important operations related to countering terrorism, safeguarding stability, international peacekeeping, and providing escort in high seas, according to the report.

    China will enhance its capacity of innovation in defense-related science and technology and step up development of advanced logistics and equipment, it said, adding that military-civilian integration will be intensified.

    Blue skies

    China will markedly bring down PM2.5 density in key areas in 2017, Li said.

    Sulfur dioxide and nitrogen oxide emissions will be cut by 3 percent this year, as part of the efforts to make the skies blue again.

    China will work harder to address pollution caused by coal burning, the premier said, adding that comprehensive steps will be taken to replace the use of coal with electricity and natural gas in more than 3 million households.

    All small coal-fired furnaces in established districts of cities at the prefectural level and above will be shut down in 2017.

    China will step up work on upgrading coal-fired power plants to achieve ultra-low emissions and energy conservation, Li noted, adding that the upgrade should be completed this year in the eastern region, next year in the central region, and by 2020 in the western region.

    All key sources of industrial pollution will be placed under round-the-clock online monitoring, he said, noting that China will also strengthen research on the causes of smog to improve the scientific basis and precision of the steps taken.

    Globalization

    Despite an increase in anti-globalization sentiment and attempts to reverse the trend, Li reassured that China opposes protectionism in its different forms, and will work toward a deeper and higher level of opening up.

    Li said China will push ahead with the Belt and Road Initiative by accelerating the building of overland economic corridors and maritime cooperation hubs, and deepening international industrial-capacity cooperation.

    China will also make big moves to improve the environment for foreign investors, including making service industries, manufacturing, and mining more open to foreign investment, encouraging foreign-invested firms to be listed and issue bonds in China, and allowing them to take part in national science and technology projects, according to the report.

    Fiscal policy

    China will pursue a more proactive and effective fiscal policy with government fiscal deficit projected to be 3 percent of its GDP, the premier said.

    While the deficit-to-GDP ratio stays unchanged from last year, the government fiscal deficit volume is set at 2.38 trillion yuan (US$345 billion), a year-on-year increase of 200 billion yuan, he said.

    In a breakdown, the projected deficit of the Central Government is 1.55 trillion yuan, and that of local governments is 830 billion yuan.

    Keeping the deficit-to-GDP ratio unchanged at 3 percent aims to “allow for further reductions in taxes and fees,” Li said.

    Tax burden on businesses is expected to be further eased by around 350 billion yuan, and business-related fees will be further cut by around 200 billion yuan to benefit market entities.

    “We will keep government spending low and enrich our people,” Li said, promising that the government will squeeze out more funds to cover cuts in taxes and fees.

    Exchange rate

    China will continue market-oriented reform in the RMB exchange rate mechanism and maintain the currency’s stable position in the global monetary system in 2017, according to the premier.

    The Chinese currency weakened against the U.S. dollar last year as U.S. economic recovery and expectations for more interest rate hikes prodded the dollar higher. But the RMB remained relatively stable against a basket of other currencies.

    Li said the yuan remained generally stable at an “adaptive and equilibrium level” last year.

    Marginal farmland

    China will turn more than 800,000 hectares of marginal farmland into forests or grassland this year, Li said.

    China will begin to pilot projects to improve the quality of forests and restore ecosystems along the Yangtze Economic Belt, the premier said.

    He said China will launch the second group of trial projects to conserve the ecosystems of mountains, forests, farmland, rivers and lakes.

    In addition, chemical oxygen demand and ammonia nitrogen emissions should both drop by 2 percent this year, so as to strengthen the prevention and control of water and soil pollution

    HK, Macao, Taiwan

    This year marks the 20th anniversary of Hong Kong’s return to the motherland, and 18th anniversary of Macao’s return.

    “We will continue to implement, both to the letter and in spirit, the principle of ‘one country, two systems,’” Li said, stressing the principle will be steadfastly applied in Hong Kong and Macao without being bent or distorted.

    The notion of “Hong Kong independence” will lead nowhere, he warned.

    He also voiced opposition against and resolution to contain separatist activities for “Taiwan independence.”

    “We will never tolerate any activity, in any form or name, which attempts to separate Taiwan from the motherland,” Li said.

    Real estate

    China will take targeted policies to cut excessive real estate inventory in the third- and fourth-tier cities and support residents to buy homes for personal use, according to the work report.

    “We need to be clear that housing is for people to live in, and local governments should take primary responsibility in this respect,” the premier said.

    He pledged to establish long-term mechanisms for promoting the steady and sound development of the real estate sector and to take more category-based and targeted steps to regulate the market.

    Cities that are under big pressure from rising housing prices need to increase appropriate supply of land for residential use, and housing development, marketing and intermediary services should be better regulated, the premier said.

    The government also plans to renovate another 6 million housing units in urban rundown areas this year.

    Job creation

    China aims to create more than 11 million jobs this year, with the registered urban unemployment rate kept within 4.5 percent, the premier said.

    China added 13.14 million jobs in 2016, and the registered urban jobless rate stood at 4.02 percent at the end of last year.

    (Xinhua)