First, a high rate of economic development was maintained.During this period, China's GDP grew at an average annual rate of7.8%. This growth enabled China to comfortably maintain itsposition as the world's second-largest economy, and become thelargest trading nation in terms of goods as well as a majoroutbound investor.
The period covered by the 12th Five-Year Plan came to a closein 2015. During the past five years, impressive achievements weremade in China's development. Since the 18th CPC National Congressin 2012, we have found ourselves in a complicated internationalenvironment, and we have faced the challenging tasks of carryingout reform and development and maintaining stability at home.However, under the guidance of the CPC Central Committee headed byGeneral Secretary Xi Jinping, we have continued our commitment tothe general principle of making progress while working to keepperformance stable, deepened reform and opening up, and adopted aseries of major measures that should deliver both immediate andlong-term benefits. As a result, we successfully fulfilled all themain tasks and targets set out in the 12th Five-Year Plan.
While recognizing our achievements, we are also keenly awarethat our country is still confronted with many difficulties andproblems in pursuing development. With the decline in global trade,amongst other factors, China experienced a fall in its totalimports and exports and failed to reach its growth objective inthis regard. Growth in investment is sluggish, overcapacity is aserious problem in certain industries, some enterprises are facingdifficulties in production and operations, growth prospects aremixed for different regions and different industries, notableimbalances exist between government revenue and expenditures, thebasic institutions for the capital market still need to beimproved, and there are latent risks in the financial and othersectors. There are many problems in medical care, education,elderly care, food and medicine safety, income distribution, andurban management that are of concern to the people. The situationremains grave when it comes to environmental pollution, and someregions are frequently hit by severe smog. Particularlydistressing, last year saw the sinking of the cruise ship OrientalStar on the Yangtze and the massive explosion in Tianjin Port. Thedeaths and injuries and the damage and loss of property from theseincidents were devastating, and the profound lessons theseincidents have taught us should never be forgotten. There are stillinadequacies in the work of the government. Some reforms, policies,and measures have not been fully implemented; a small number ofgovernment employees either do not or are unable to fulfill theirduties, or behave irresponsibly; and the corruption and misconductin some sectors cannot be ignored. We must be more mindful of thedifficulties ahead, more ready to assume responsibility, and morehardworking in ensuring these problems are solved. The wishes ofthe people should always determine the aim of our governance; wemust do our utmost to deliver a strong performance in our work andnever fail to live up to the great trust the people have placed inus.
We owe these achievements to the sound overall decisions madeby the CPC Central Committee headed by General Secretary XiJinping, and to the concerted and determined efforts of all membersof the Party, all members of the armed forces, and all the peopleof China. On behalf of the State Council, I wish to express oursincere gratitude to the people of all ethnic groups in Chinaincluding public figures from all sectors of society and to theother parties and the people's organizations. I express ourheartfelt appreciation to our fellow countrymen and women in theHong Kong and Macao special administrative regions and in Taiwan,and to Chinese nationals overseas. I also wish to express oursincere thanks to the governments, international organizations, andfriends from all over the world who have shown understanding andsupport for China in her endeavor to modernize.
Over the past year, China's all-round diplomacy has deliveredfruitful outcomes. President Xi Jinping and other Chinese leadershave visited many countries and attended international eventsincluding the United Nations summits, the G20 Leaders Summit, the23rd APEC Economic Leaders Meeting, the 21st Session of theConference of the Parties to the UN Framework Convention on ClimateChange, the East Asian leaders' meetings on cooperation, and theWorld Economic Forum annual meeting 2016. The Summit of the Forumon China-Africa Cooperation and the China-EU Leaders' Meeting wereheld, and the China and the Community of Latin American andCaribbean States (CELAC) Forum was inaugurated. Fresh progress wasmade in China's relations with other major countries; pragmaticcooperation with neighboring countries was strengthened; friendshipand cooperation with other developing countries grew; relationswith the United Nations and other international organizations andmechanisms were strengthened in all areas; and notable achievementswere made in economic diplomacy and cultural exchanges. As aresponsible major country, China played an important constructiverole in international and regional affairs.
We marked the 70th anniversary of the victory in the ChinesePeople's War of Resistance against Japanese Aggression and theGlobal War against Fascism. This anniversary was a reminder ofChina's place in history as the main theater in the East during theGlobal War against Fascism and its major contribution to the wareffort. The Chinese people marked this occasion to demonstratetheir dedication to safeguarding peace and upholding justicetogether with other peoples.
The campaign to build understanding of the Three Stricts andThree Honests* was intensified, the CPC Central Committee'seight-point decision on improving Party and government conductcontinued to be implemented, action was taken against formalism,bureaucratism, hedonism, and extravagance, and rigorous effortswere made to carry out the State Council's three-point decision oncurbing government spending. Administrative supervision andoversight through auditing were strengthened. We stepped up effortsto improve Party conduct and government integrity and fightcorruption, and brought a number of offenders to justice.
Sixth, we developed new ways of conducting law-basedadministration and governance to promote social harmony andstability. The State Council submitted 11 legislative proposals tothe Standing Committee of the National People's Congress andenacted or revised eight sets of administrative regulations.Efforts were accelerated to increase government transparency andexpand the application of e-government and online administration.We set up a mechanism to inspect and establish accountability forthe implementation of major government policies and introducedthird-party evaluations. We responded effectively to naturaldisasters and emergencies. Efforts were stepped up to ensureworkplace safety; as a result, we have seen a continued reductionin the number of total accidents, including the number of accidentsof a serious or large-scale nature as well as those in industrieswhere accidents tend to be more common. We moved ahead with thedemonstration initiative to ensure food safety. We strengthenedall-round efforts to maintain law and order and cracked down oncrimes in accordance with the law to safeguard public security.
Fifth, we promoted the reform and development of socialprograms to improve living standards. Despite fiscal constraints,we continued to intensify efforts to help ensure the wellbeing ofour people. New policies were launched to create jobs and businessstartup opportunities for college graduates and those withdifficulties finding employment. Over the course of the year, 7.72million government-subsidized housing units were basicallycompleted in urban areas, work started on the reconstruction of6.01 million housing units in rundown urban areas, and 4.32 milliondilapidated houses in rural areas were rebuilt, helping largenumbers of families that are struggling with housing realize theirdream of having a home to settle in. We moved more quickly toimprove conditions in badly built and poorly operated schoolsproviding compulsory education in poor areas, deepened the reformof the professional title system for elementary and secondaryschool teachers, and increased the number of students from poorrural areas who were enrolled in key institutions of higherlearning by a further 10.5%. Comprehensive reform was carried outin all public hospitals at the county level, the coverage of theserious disease insurance scheme was extended to more rural andnon-working urban residents, a system of assistance for treatingmajor and serious diseases was put in place, and a system forproviding living allowances for people with disabilities who are inneed and for granting nursing care subsidies to persons with severedisabilities was established. We increased subsistence allowances,benefits for entitled groups, and basic pension benefits forenterprise retirees, implemented the reform of the pension systemfor employees of Party and government offices and publicinstitutions, and improved their wage system. Efforts to developbasic public cultural services were also intensified. All of thishas resulted in a stronger sense of benefit in society.
Fourth, we promoted coordinated development between regionsand the new type of urbanization to expand development space. Workcontinued to promote the coordinated development of the easternregion, the central region, the western region, and the northeast;priority was placed on moving forward with the ThreeInitiatives-the Belt and Road Initiative, the Beijing-Tianjin-Hebeiintegration initiative, and the Yangtze Economic Belt initiative. Anumber of major projects were also launched to developinfrastructure, improve the distribution of industries, and achieveecological and environmental conservation. Policies and measureswere introduced to promote the development of Tibet, Xinjiang, andTibetan ethnic areas in the provinces of Sichuan, Yunnan, Gansu,and Qinghai. We pressed ahead with the reform of the householdregistration system, adopted a residence certification system, andstepped up the development of urban infrastructure, making progressin developing new urbanization.
Third, we worked to promote industrial innovation andupgrading to improve economic performance. To strengthen the newgrowth engines, an innovation-driven development plan was adoptedalong with guidelines on its implementation, policies and measureswere introduced to encourage public participation in startingbusinesses and making innovations, and the Internet Plus actionplan was implemented. A great number of makers started businessesand made innovations. Improvements were made to policies in supportof agriculture to promote transformation of the agricultural growthmodel. In addressing the decline in industrial growth and thedownward slide incorporate performance, we worked to foster newindustries and upgrade traditional ones. We launched the Made inChina 2025 initiative to upgrade manufacturing, set up governmentfunds to encourage investment in emerging industries and to developsmall and medium-sized enterprises, and established more nationalinnovation demonstration zones. We cut overcapacity and encouragedbusiness acquisitions and restructuring. Cuts made in outdatedproduction capacity over the past three years have included over 90million metric tons of steel and iron, 230 million metric tons ofcement, over 76 million weight cases of plate glass, and more thanone million metric tons of electrolytic aluminum. The developmentof production- and consumer-oriented service industries picked upmomentum. We took serious measures to conserve energy, reduceemissions, and protect the environment, exceeding obligatorytargets. We released self-imposed emissions reduction targets andcontributed to the positive outcomes of international negotiationson climate change.
Momentum was created for reform and development throughopening up. We worked hard to keep foreign trade stable byadjusting the mechanism for sharing the cost of export tax rebatesbetween the central and local governments, overhauling andregulating charges for imports and exports, increasing tradefacilitation, and making changes to the export mix. The number ofrestrictions on overseas investment in China was cut by 50%, andover 95% of overseas-funded projects may now be undertaken on asimple reporting basis. China utilized US$126.3 billion of overseasinvestment, an increase of 5.6%. Non-financial outward foreigndirect investment reached $118 billion, up 14.7%. Pilot free tradezones were established in Guangdong, Tianjin, and Fujian based onthe model of the China (Shanghai) Pilot Free Trade Zone. The RMBwas included in the IMF's Special Drawing Rights basket. The AsianInfrastructure Investment Bank was officially inaugurated, and theSilk Road Fund opened for business. China signed free tradeagreements with the Republic of Korea and Australia,respectively,and signed the Protocol to Amend the FrameworkAgreement on Comprehensive Economic Cooperation between China andASEAN. Progress was made in the Silk Road Economic Belt and 21stCentury Maritime Silk Road Initiative (the Belt and RoadInitiative), the pace of our industrial-capacity cooperation withother countries was stepped up, and breakthroughs were made inChina's export of high-speed railway and nuclear powerequipment.
Fiscal, tax, financial, and other key reforms were deepened.The central government cut, by one third, the number of items forwhich special transfer payments are permitted, while scaling up itsgeneral transfer payments. Steady progress was made in replacingbusiness tax with VAT. Ad valorem taxation was extended to covermore types of resource taxes. The upper limit of the floating bandon deposit rates was removed, the deposit insurance system wasintroduced, and the RMB cross-border payment system wasestablished. Pricing reform was intensified, with the number ofcentral government set prices reduced by 80% and the number oflocal government set prices cut by more than 50%. We carried outstate-owned enterprise (SOE) reforms, rural reforms, and investmentand financing reforms, ecological management reforms, and others.Efforts to intensify reform in all respects are beginning todeliver results.
财税金融等重点改革深入推进。中央对地方专项转移支付项目减少三分之一，优化公共服务流程。群众和企业办事更加方便，全面实施三证合一、一照一码。加强事中事后监管，彻底终结了非行政许可审批。工商登记前置审批精简85%，取消123项职业资格许可和认定事项，而是持续推动结构性改革。深入推进简政放权、放管结合、优化服务改革。取消和下放311项行政审批事项，加大改革开放力度。我们不搞“大水漫灌”式的强刺激，维护了国家经济金融安全。First,we maintained stable growth, made structural adjustments, guardedagainst risks, and developed new ways of conducting macroregulation. In responding to the mounting downward pressure on theeconomy, we exercised targeted and well-timed regulation on thebasis of range-based regulation. We adopted proactive fiscal policythat focused on increasing intensity and efficacy by expanding thescope of structural tax reductions, reducing fees across the board,and putting dormant budgetary funds to good use. Local governmentbonds issued to replace outstanding debt reached 3.2 trillion yuan,lessening the interest payment burden of local governments byapproximately 200 billion yuan while also reducing their debtrepayment pressure. We pursued prudent monetary policy with anappropriate amount of intensity, making several cuts to interestrates and required reserve ratios, reforming management of theloan-to-deposit ratio, creating new monetary policy tools, andincreasing support for the real economy. Effective investmentincreased, special-purpose funds were established, and developmentwas strengthened in areas in need of attention, including waterconservancy, rundown urban areas and dilapidated rural housing, andrailways and highways in the central and western regions. Consumerspending was promoted in key areas, spurring rapid growth inspending on recreational travel, online shopping, and informationgoods and services. In 2015, we also responded proactively to avariety of risks and challenges in the financial sector, such asunusual fluctuations in the stock market and the foreign exchangemarket, ensuring that no systemic or regional threats arose, thussafeguarding China's economic and financial security.
Second, we intensified reform and opening up to invigorate themarket. Rather than adopting strong stimulus policies that wouldhave an economy-wide impact, we continued to move forward withstructural reform. We intensified reform to streamlineadministration, delegate more powers, improve regulation, andprovide better services. We delegated the power or cancelled therequirement for government review for 311 items, cancelled therequirement for verification or approval for 123 professionalqualifications, and put a complete stop to the practice ofnon-administrative review. The number of items which requiregovernment approval for new businesses prior to registration wascut by 85%, and the system of a separate business license,organization code certificate, and taxation registrationcertificate was replaced by a unified business license with aunified social credit code. Both operational and post-operationaloversight over businesses were strengthened, and public serviceprocedures were improved. Government-related procedures forindividuals and businesses were made much simpler, such thatenthusiasm for stepping out into business and making innovations isrising by the day.
I will now move on to discuss the main work we did lastyear:
They were made in the context of an extremely complicated andchallenging international environment. In 2015, world economicgrowth fell to its lowest rate in six years, growth ininternational trade slowed, commodity prices plummeted, and therewas growing volatility in the global financial market. All this hada direct impact on China's economy. They were made at the same timeas deep-seated domestic problems were becoming prominent anddownward pressure on the economy was mounting. While dealing withthe slowdown in economic growth, making difficult structuraladjustments, and absorbing the effects of previous economicstimulus policies, China was also confronted with many difficultproblems and choices in the running of the economy, and this calledfor effective responses based on the need both to combine long-termand short-term considerations and to seek benefit and avoid harm.Finally, they were made at a time when China's economic output hadexceeded 60 trillion yuan. Every percentage point of GDP growthtoday is equivalent to 1.5 percentage points of growth five yearsago or 2.5 percentage points of growth ten years ago. The largerthe economy grows, the greater the difficulty of achieving growth.In the face of these difficulties and pressures, all our peoplehave truly exerted themselves and progressed step by step to get uswhere we are today. This once again demonstrates that no difficultyor hardship will ever stop China from moving forward.
A number of world-class innovations were made in science andtechnology.Major headway was made in the development of 3G nuclearpower technology, China's self-developed C919 large jetliner rolledoff the assembly line, and Tu Youyou was awarded the Nobel Prizefor Physiology or Medicine. These achievements in China'sdevelopment, a source of pride and motivation for our people, didnot come easily.
Living standards improved. Personal per capita disposableincome increased by 7.4% in real terms, overtaking the growth rateof the economy. By the end of last year, personal savings depositshad risen by 8.5%, an increase of more than four trillion yuan. Inrural areas, another 64.34 million people gained access to safedrinking water and greater alleviation efforts reduced the numberof people living in poverty by 14.42 million.
New driving forces for development grew rapidly. Furtherprogress was made in implementing the strategy of innovation-drivendevelopment,the penetration of the Internet into all industriespicked up pace, and emerging industries grew rapidly. Businessstartups and innovations by the general public flourished, with thenumber of newly registered businesses rising by 21.6% in 2015, oran average of 12,000 new businesses per day. New driving forcesplayed a major role in keeping employment stable and pushing aheadindustry upgrading, and are now driving profound economic andsocial change in China.
Encouraging progress was made in structural adjustment. Theservice sector as a proportion of GDP rose to 50.5%, accounting formore than half for the first time. The contribution of consumptiontoward economic growth reached 66.4%. High-tech industries andequipment manufacturing grew faster than other industries. Energyconsumption per unit of GDP fell by 5.6%.
The economy operated within an appropriate range. GDP reached67.7 trillion yuan, representing an increase of 6.9% over theprevious year-a growth rate faster than that of most other majoreconomies. Food crop production increased for the 12th year in arow. Consumer prices grew slowly. Of particular note, theemployment situation overall remained stable, with 13.12 millionnew urban jobs created over the course of the year, surpassing theyear's target and becoming an economic highlight.
In the past year, China has encountered many difficulties andchallenges in its development. However, under the leadership of theCentral Committee of the Communist Party of China (CPC) headed byGeneral Secretary Xi Jinping, and with confidence and courage, allthe people of China have worked to overcome obstacles and havepressed ahead with a pioneering spirit. As a result, progress hasbeen achieved and stability ensured in economic and socialdevelopment, the main tasks and targets for the year have beenfulfilled, and major achievements have been made in reform, openingup, and socialist modernization.
I.Review of the work we did in 2015
On behalf of the State Council, I will now report to you onthe work of the government for your deliberation and approval. Iinvite comments on my report from the members of the NationalCommittee of the Chinese People's Political Consultative Conference(CPPCC).
Li Keqiang Premier of the State Council
Delivered at the Fourth Session of the 12th National People'sCongress of the People's Republic of China on March 5, 2016
Report on the Work of the Government