The Chinese Government is determined to tackle smog and environmental pollution as a whole, and tremendous efforts have been made in this regard already. However, the progress achieved still falls far short of the expectations of our people. Last year, I said that the Chinese Government would declare war against environmental pollution. We are determined to carry forward our efforts until we achieve our goal.
This year, our focus will be to ensure full implementation of the newly revised Environmental Protection Law. All acts of illegal production and emissions will be brought to account. We will make the cost for doing so too high to bear. More support will be given to law enforcement departments. No one will be allowed to use their power to meddle with law enforcement. Law enforcement departments also need to have the courage to take charge and fulfill their responsibilities. Laxity in law enforcement and dereliction of duties or abuse of office will be handled in accordance will be dealt with according to the law. We must make sure that the law will work as a powerful and effective tool in fighting pollution instead of being as soft as cotton candy.
Tackling pollution takes a process and requires the joint efforts of the whole of society. It may be difficult for one to change the natural environment he lives in anytime soon, but one can always change the way they themselves behave.
Concerning deflation, there are multiple criteria to evaluate it. A major criterion is consecutive negative growth of overall consumer prices in a country. When it comes to CPI in China, last January we had a positive growth and the figure for February further rebounded. I don't believe there is deflation in China.
Consumer prices in China have been quite low recently, but China is not exporting deflation. The truth is we have been on the receiving end of deflation. For example, last year, China bought some 310 million metric tons of crude oil and 930 million tons of iron ore on the international markets. The physical volume has been on the rise, but the value contained has declined because of a tumble in international commodity prices. And we are also prepared to cope with such a situation. What we hope to see is that there will be quicker global economic recovery and the global economy will regain its robust growth.
Entrepreneurship and Innovation
To boost market vitality, the government must eliminate road blocks and pave the way for people to harness their entrepreneurship. The government plans to do more in this regard in 2015. Market access will be further relaxed. Business licenses and required certificates will be integrated into one. It would no longer take one so much trouble to register a business in some areas of the services sector. The government also needs to foster more favorable conditions for business startups. There needs to be low-rent makerspaces that can add wings to the entrepreneurship of our people. The government will also fully leverage the national guidance fund to encourage more seed capital to pitch in. Taxes and fees will be further reduced to ensure that all businesses get to forge ahead with a light pack.
A country could achieve prosperity when its people's initiative is brought into full play. There will be much economic vitality when there are ample business opportunities and choices for consumers. By encouraging mass entrepreneurship and innovation, we want to help more people become better off and enable more to achieve their full potential in life. This will also help us adjust the income distribution structure and promote social fairness. In particular, we want to ensure that young people, especially children from poor families, will have equal access to opportunities for upward mobility.
It's true that there have been individual cases of financial risks in China, but we are fully capable of forestalling systemic and regional financial risks. China's economy continues to operate within the proper range and there is a fairly high savings rate in China. Moreover, 70 percent of local government debts are in the form of investment, which boasts quite good prospects for yielding returns. We are also regulating local government financing vehicles. Chinese banks have a fairly high capital adequacy ratio and ample provisions. It's true that there are some non-performing loans (NPLs) and the NPL ratio has risen somewhat. Still, the level is quite low compared to the global average.
Individual cases of financial risks will be allowed. We encourage the practice of balancing one's books according to the market so as to guard against hazards and raise people's awareness of financial risks. This year, we will set up a deposit insurance system and continue to develop multi-tiered capital markets to lower the corporate leverage ratio. All these efforts will help ensure that financial services can better serve the real economy.
According to those authoritative standards, China is still the second largest economy in the world and more importantly, our per-capita GDP is still behind that of some 80 other countries or so. By the standard of the World Bank, we still have 200 million people living in poverty. So I can say that China is still a developing country in every sense of the term.
China must manage our own affairs well and maintain development at a reasonable speed. That in itself is China's major contribution to the world. Actually, China is assuming greater due international obligations and responsibilities. For such a big country as ours, how could it get a free ride on anybody's train? What China is doing is working with other countries to pursue common progress.
Copyedited by Kieran Pringle
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