Full Text: Report on the Work of the Government

7. Firmly advancing reform and further expanding opening up

This year we will continue to deepen reform in key areas and crucial links and work hard to achieve new breakthroughs.

We will continue to make strategic adjustments in the distribution and structure of the state-owned sector. We will speed up the reform to introduce the corporate system in large state-owned enterprises, especially parent companies of enterprises under the central government, and we will diversify their ownership and improve their corporate governance. We will accelerate the reform of monopoly industries; promote reforms in public utilities; effectively expand market access; and actively introduce competitive mechanisms. We will create a market environment for fair competition among economic entities under diverse forms of ownership and facilitate stronger growth of the non-public sector.

We will deepen the reform of prices for resource products and environmental protection charges. This is an important measure for conserving energy and resources, protecting the environment, and achieving sustainable development. We will expand the trial of direct transactions between major electricity consumers and producers; introduce tiered prices for household consumption of electricity and water; and improve the mechanism of price setting and cost sharing for electricity generated from renewable energy. We will improve the pricing policy for water used in agriculture. We will reform the system of sewage and garbage treatment charges. We will expand the trial of pollution rights trading. While pushing forward these reforms, we will balance the interests of different parties and ensure that the basic living conditions of people with low incomes are not adversely affected.

We will continue to reform the fiscal and taxation systems. We will strengthen the public finance system. We will improve the system of transfer payments, increase general transfer payments, and enhance the ability of local governments to provide basic public services. We will strengthen the fiscal management system at and below the provincial level, improve a mechanism to ensure basic funding for county governments, and carry forward reforms that place county finances directly under the management of provincial governments. We will draw up budgets for all funds controlled by central and local governments, prepare budgets for social security funds on a trial basis, and improve the budget system for the use of state capital. We will increase the transparency of the fiscal budget. We will continue to make progress in VAT reform. We will carry forward the reform of resource taxes. We will extend the urban construction and maintenance tax and education surcharges to foreign enterprises and nationals.

Improving the financial system is an important measure for countering the impact of the global financial crisis. We will continue to improve corporate governance in financial institutions in which the state holds a controlling stake, improve their business management, and raise their ability to manage and control risks. We will continue the reform of policy-based financial institutions. We will steadily promote the transformation of asset management companies. We will deepen the reform of rural credit cooperatives. We will promote orderly development of small and medium-sized financial institutions. We will vigorously develop the financial market and encourage financial innovation. We will promote pilot projects for the use of the renminbi in cross-border trade, and gradually develop overseas financial activities using the renminbi. We will continue building the deposit insurance system. We will speed up the development of agricultural insurance.

We will actively yet prudently push forward the reform of institutions on the basis of scientific classifications and in accordance with the requirements that government and business functions be spun off from institutions, and that supervision be separated from day-to-day operations.

The reforms we are undertaking, including economic and political restructuring and reforms in all other areas, are comprehensive. Without political restructuring, it would not be possible for economic restructuring and the modernization drive to succeed. We will develop socialist democracy, and effectively safeguard the democratic rights of the people as masters of the country, particularly their rights to vote and to stay informed about, participate in, express views on, and oversee government affairs. We will further expand primary-level democracy, strengthen primary-level self-governing bodies, and improve the system of democratic administration at the primary level so that the people can better participate in the management of local public affairs. We will follow the rule of law and improve the legal system, particularly laws concerning the standardization and oversight of the exercise of power. We will innovatively revise the methods and mechanisms of the government's legislative work and expand public participation in it.

We will fully adapt to changes in the international situation, meet the needs of domestic development, and expand the breadth and depth of opening up.

We will steadily develop foreign trade. This year the main focus is on opening new markets and adjusting the structure of and promoting balance in foreign trade. We will adhere to the strategy of diversifying markets and the strategy of competing on quality; implement and improve policies and measures on export tax rebates, export credit, and export credit insurance; and continue to improve services related to customs, quality inspection, and foreign exchange. We will strengthen traditional markets and vigorously develop new markets. We will improve the export mix; stabilize exports of labor-intensive products; increase exports of electromechanical products as well as new- and high-technology products; energetically develop trade in services and service outsourcing; strive to cultivate exports of brand-name products and develop marketing networks; and continue to strictly limit exports of resource products and products whose production consumes large quantities of energy and resources or is highly polluting. We will vigorously promote the transformation and upgrading of the processing trade. We will promote the balanced development of imports and exports; focus on increasing imports of advanced technology and equipment, key spare parts, and goods in short supply domestically; keep all policies and measures for promoting and facilitating imports stable; and urge developed countries to ease export restrictions on new- and high-technology products to China.

We will promote coordination between using other countries' investment in China and making Chinese investment overseas. We will optimize the utilization of foreign investment; encourage more foreign investment in high-end manufacturing, new- and high-technology industries, modern service industries, and the new energy, energy-conservation and environmental protection industries; encourage multinational corporations to set up regional headquarters and other functional agencies in China; and encourage Chinese and foreign enterprises to strengthen cooperation in R&D. We will encourage the use of foreign investment for restructuring, upgrading, merging, and reorganizing Chinese companies, and quickly establish a security review system for mergers and acquisitions involving foreign investment. We will work to attract both investment and talent from overseas. We will guide foreign investors to transfer and increase their investments to the central and western regions. We will accelerate the implementation of the "go global" strategy; encourage Chinese industries whose products are in demand in foreign markets to transfer their production capacity overseas in an orderly manner; support qualified enterprises to carry out overseas mergers and acquisitions; deepen mutually beneficial cooperation concerning foreign resources; and improve the quality of overseas contracted projects and labor service cooperation. We will further simplify examination and approval procedures, and give enterprises decision-making power over their overseas investments. Enterprises that have "gone global" should operate in accordance with the law, avoid risks, prevent vicious competition, and safeguard the country's overall interests and good image.

We will deepen multilateral and bilateral business cooperation. We will strengthen and improve business ties with developed countries, deepen mutually beneficial cooperation with other developing countries, and conscientiously implement the eight new policy measures for China's pragmatic cooperation with African countries. We will make full use of the role of high-level economic dialogue and bilateral economic and trade joint commissions. We will quicken the pace of establishing free trade zones. We will actively participate in the Doha round of trade talks to reach a more reasonable and balanced outcome as early as possible. We will oppose protectionism in all forms and properly handle trade frictions.

The Shanghai World Expo will open soon. We will strengthen cooperation with all participating countries, regions, and international organizations to make the Expo a successful, spectacular, and unforgettable event, and one that promotes the progress of human civilization, scientific and technological innovation, and exchanges and cooperation between, and common development of China and other countries of the world.