The Report on the Work of the Government delivered by Premier Li Keqiang at the opening meeting of the Second Session of the 13th National People's Congress (NPC), the national legislature, on March 5 has made a package plan for the development of the economy and the improvement of people's livelihood.

The government work report, delivered by the premier at the opening meeting of the NPC annual session in March each year, concludes the government's work in the previous year and makes a plan for the year ahead. In this year's report, Li affirmed the progress that China made in 2018 amid the profound change in the external environment and challenges caused by the growing pains of economic transformation.

Also, expressing the government's clear awareness of the uncertainties and challenges facing China, Li unveiled a series of measures for sustainable development in 2019, which were described by the media as the largest "gift bag" ever provided by the government and were welcomed by the public.

Tax cuts

For Lei Jun, a deputy to the 13th NPC and the founder and CEO of Xiaomi Corp., a domestic tech giant in China, what impressed him most in the report is the part about tax reduction. According to the report, China aims to reduce the tax burdens and social insurance contributions of enterprises by nearly 2 trillion yuan ($298.3 billion) in 2019.

"Before Premier Li delivered the report, some reporters asked me what if the government reduces the value-added tax by 3 percent this time. I said 'impossible' immediately," Lei said at an NPC panel discussion on March 5 after the government work report was delivered.

"When I heard Premier Li announce that the government will reduce value-added tax by 3 percent from 16 percent to 13 percent, I was thrilled. Many other entrepreneurs at the Great Hall of the People couldn't help applauding. We felt the government's determination to create a more business-friendly environment, especially for the manufacturing companies."

What does this 3 percent mean to enterprises? Zhang Xinghai, a deputy to the 13th NPC and the President of Chongqing Sokon Industry Group, said the 3-percent reduction alone will save the company 60 million yuan ($8.82 million) annually. "In this way, we can spend more money on R&D and focus more on high-quality development. This will bring long-term benefits to manufacturing companies."

Chen Hua, a deputy to the 13th NPC and General Manager of Panjiang Coal and Electricity Refco Group Ltd. from Guizhou Province, said this new measure will save about 500 million yuan ($73.5 million) for his group.

"The report says the total government expenditure will see an increase of 23 trillion yuan ($3.38 trillion) this year, up by 6.5 percent from last year," Chen said. "Despite this, the government will continue to cut tax. This shows how strong the government's determination is to strengthen the business sector, which is very encouraging to us."

This positive signal doesn't only apply to the domestic market. China will continue to shorten the negative list for foreign investment to further improve its business environment for foreign investment.

"The country will also introduce more opening-up measures for agriculture, mining, manufacturing and services and allow wholly foreign-owned enterprises to operate in more areas," Ning Jizhe, a deputy to the 13th NPC and Vice Minister of the National Development and Reform Commission (NDRC), said at a press conference of the Second Session of the 13th NPC on March 6.

Figures from the NDRC show that foreign direct investment in China rose 3 percent to $135 billion last year, while the number of newly established foreign-invested companies increased by nearly 70 percent.

"China has begun the revision of its negative list for foreign investment and will continue to carry out test programs for further opening up in free trade zones," Ning said. "Meanwhile, a new catalogue of foreign-invested industries will be released. Fair treatment will be offered to foreign-invested companies in terms of government procurement, the setting of standards, industrial policies, technological policies, qualification licensing, registration levels, publicly listing and access to financing," he added. 

Quality development

The target range for GDP growth this year, according to the report, is between 6 and 6.5 percent, which is lower than that in 2018. High-quality development will be given more status in 2019 with innovation-driven and green development given more impetus.

"China will continue to upgrade its traditional industries, support the emerging hi-tech sector, and increase support for basic and applied research. The country will strengthen its innovation capabilities, boost the integrated development of advanced manufacturing and modernized services, and create industrial Internet platforms to facilitate the transformation and upgrading manufacturing," the report says.

With regard to environmental protection, China plans to reduce sulfur dioxide and nitrogen oxide emissions by 3 percent in 2019, while making efforts to decrease the density of PM2.5, a major particle pollutant, in key locations, including the Beijing-Tianjin-Hebei region, the Yangtze River Delta region and the Fenhe-Weihe River Plain area.

"President Xi stressed many times that lucid waters and lush mountains are invaluable assets," Wang Wentao, a deputy to the 13th NPC and Governor of northeast China's Heilongjiang Province, said at a panel discussion of this year's NPC annual session on March 7. "While visiting Heilongjiang in October last year, Xi added that ice and snow landscapes are also invaluable assets of Heilongjiang, which is famed for its spectacular winter landscapes."

"We are endeavoring to promote our winter tourism which increased 10 percent in 2018 compared with 2017," Wang said. "With more measures to regulate the tourism market, we are expecting to welcome more tourists from both China and abroad."

Tourism is also a way to assist poverty alleviation in rural areas. "The farmland in our village is quite limited so we can't rely on agricultural products for development," Cheng Ju, a deputy to the 13th NPC and the head of Dashi Village in Hubei Province, told Beijing Review. "In 2018, in order to develop tourism, we made great efforts to improve the environment of our village, focusing on garbage disposal."

"The next boom for Internet business will be in rural areas," said Yao Jinbo, a deputy to the 13th NPC and the CEO of 58.com, an information-sharing platform in China.

Born in Yiyang City, central China's Hunan Province, Yao has completed a research and investigation in rural Hunan and offered suggestions on the development of the Internet business there to help lift rural people out of poverty.

"There are many good organic products in rural areas that need an online platform," Yao said. "This is a large market, and investment from the government and other social resources is needed."

To enhance development, the Government Work Report said that China will beef up efforts to cut dropout rates of rural students and improve college enrollment numbers to stop poverty passing down the generations. A quota system will be implemented to boost the attendance of rural students in top universities.

 

Benefiting all

While some measures target only specific groups, others are aimed at everyone in the country.

The Government Work Report states average rates for mobile Internet services will be cut by more than 20 percent. Currently, as the three major mobile service providers, China Unicom, China Mobile and China Telecom, operate separately, service switching between them has been problematic. The report says that this year customers can expect to keep the original phone number when they switch services among the operators.

Zhu Lieyu, a deputy to the 13th NPC and a lawyer from Guangzhou City, south China's Guangdong Province, is very happy to hear this as this is a suggestion he submitted last year.

"This is a very positive step forward," Zhu said, "though it will take some time to deal with technical obstacles."

More efforts will also be made to pursue the Internet Plus initiative in all industries and sectors. "China will upgrade networks for distance education and telemedicine, and expand the capacity of mobile telecommunications base stations to provide faster and more reliable broadband connections for Internet users," the report says.

Employment rights have, for the first time, been raised to a critical level. The report says that China will take strong measures to develop modern vocational education to help ease employment pressure and address the shortage of highly skilled personnel. A vocational skills training initiative will be implemented with 100 billion yuan ($14.9 billion) from the surplus in unemployment insurance funds allocated to provide training for the 15 million targeted attendees. This will help job seekers to upgrade skills or switch jobs or industries.

For pensioners, China will take significant steps to develop the elderly care sector, especially community services in 2019 as the number of people aged 60 and above has reached 250 million.

The country will provide support to institutions offering services in communities, like day care, rehabilitation, assisted meals and assisted mobility, by using measures such as tax reductions, fee cuts and exemptions, funding support, and reduced charges for water, electricity, gas and heating.

"The government work report has covered various areas and aspects of society," Yang Weiguo, a deputy to the 13th NPC and Mayor of Zhuzhou City of Hunan Province, said. "As the report says, what the government has planned is just what the people expect. We will work hard together to achieve the goals set by the report."

Copyedited by Craig Crowther

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