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6. We further implemented the Three Initiatives and New Urbanization, which has helped reshape and enhance the pattern of urban and rural development.
We fostered synergy between the Three Initiatives (the Belt and Road Initiative, coordinated development of the Beijing-Tianjin-Hebei region, and development of the Yangtze Economic Belt) and the coordinated development of the western, northeastern, central, and eastern regions. We promoted coordinated and integrated regional development and urban-rural development, and increased the quality and standards of New Urbanization. New growth areas, poles, and belts experienced stronger, faster development.
1) The Three Initiatives advanced in a solid and orderly manner.
All provinces, autonomous regions, and municipalities directly under the central government actively took part in the Belt and Road Initiative, and initial results were delivered in developing Xinjiang as the core of the Silk Road Economic Belt and Fujian as the core of the 21st Century Maritime Silk Road.
In systematically promoting the coordinated development of the Beijing-Tianjin-Hebei region, we sped up planning and development of Beijing's sub-administrative center, implemented a number of demonstration projects to relieve Beijing of functions nonessential to its role as China's capital, facilitated coordination in three major areas-transportation, ecological conservation, and industrial development-and enacted a range of major reform measures. We published and implemented the Outline on Developing the Yangtze Economic Belt, continued coordinated efforts to champion environmental protection and eschew large-scale development, accelerated work on building a green, ecological corridor, and fully established a mechanism for inter-provincial consultation and cooperation covering the upper, middle, and lower reaches of the River.
Figure 5. The Belt and Road Initiative
Figure 6. Coordinated Development of the Beijing-Tianjin-Hebei Region
Figure 7. The Yangtze Economic Belt
2) Implementation of the master strategy for regional development and differentiated development policies for different regions deepened.
We increased efforts to accelerate large-scale development in the western region, with construction beginning on a number of signature projects. A relatively high-pace of economic development was maintained in the central and western regions. A new round of strategies and a number of major policies and measures for revitalizing the northeast were implemented, and reform in key areas, such as SOEs and the investment and business environment, made fresh progress. We underscored the strategic position of the central region, designating it as the country's key advanced manufacturing center, and as the priority area for New Urbanization, the core area for modern agricultural development, the demonstration area for promoting ecological progress, and the key area for comprehensive opening up. The city clusters along the middle reaches of the Yangtze River played a greater role as major growth poles. The eastern region continued to leverage its advantages in transforming and upgrading industries, in pursuing opening up and innovation, and in coordinating land and marine development to generate a constant stream of new drivers for growth and produce new highlights in development.
We introduced guidelines on promoting coordinated development between regions, and continued to improve the system of differentiated regional policies. We ensured the orderly development of major function platforms-such platforms include national experimental zones for integrated, complete reform, state-level new areas and all types of development zones, demonstration zones for industrial relocation, demonstration zones for integrating industrial and urban development, and demonstration airport economic zones. We intensified efforts to combat poverty in old revolutionary base areas, areas with concentrations of ethnic minorities, border areas, and contiguous poor areas. We improved polices and measures for promoting economic and social development and continuing stability in Xinjiang, Tibet, and the Tibetan ethnic areas in Sichuan, Yunnan, Gansu, and Qinghai provinces.
Box 10: Development of the Four Regions
3) We steadily advanced the development of New Urbanization.
We granted urban residency to more people with rural household registration living in urban areas, and issued a number of key policies in support of this work, such as the guidelines on reform of the household registration system, the policy for implementing the residence certificate system,and the policy for linking increases in the amount of land designated for urban development in a locality to the number of former rural residents granted urban residency there. A total of 16 million people with rural household registration were granted urban residency in 2016. In total, permanent urban residents now account for 57.35% of the population, while the percentage of registered urban residents has reached 41.2%. We planned and developed city clusters in an orderly way, and supported Wuhan and Zhengzhou in developing as national principal cities. We facilitated the development of emerging small- and medium-sized cities as well as small towns with unique features across the country, and extended comprehensive trials of New Urbanization programs to two provinces and 246 cities and towns. Trials for comprehensive reform of small- and medium-sized cities yielded positive results in 61 cities.
Box 11: New Urbanization
7. We intensified environmental protection and energy and resource conservation, securing early achievements in promoting green development.
Energy consumption and carbon dioxide emissions per unit of GDP fell by 5% and 6.6% respectively, both surpassing annual targets. According to estimated figures, chemical oxygen demand was reduced by 2.6%, ammonia nitrogen emissions by 2.9%, sulfur dioxide emissions by 5.6%, and nitrogen oxide emissions by 4.0%. A year-on-year increase of 2.1 percentage points occurred in the proportion of days with good or excellent air quality for cities at or above prefectural level, while the annual average PM2.5 concentrations in 74 key cities dropped by 9.1%. The proportion of surface water with a national quality rating of Grade III or above rose by 1.8 percentage points year on year, and the proportion of surface water with a rating lower than Grade V, meanwhile, fell by 1.1 percentage points. Water consumption per 10,000 yuan of GDP fell by 5.6%.
Figure 8. Ecological Progress and Green Development
1) Work to promote ecological progress moved ahead.
We promulgated and implemented the measures on evaluating performance in advancing ecological progress. We decided to build pilot zones for ecological advancement in Fujian, Jiangxi, and Guizhou provinces, and stepped up the development of pilot demonstration zones for promoting ecological progress. We issued and implemented a number of reform plans on ecological progress, including: the pilot plan on improving the national system for natural-resource asset management; the guidelines for trial reforms to establish a system to bring county- and prefecture-level environmental monitoring, inspection, and law enforcement bodies directly under the jurisdiction of provincial-level environmental bodies; the plan for implementing the emissions permit system to tighten emissions control; and the guidelines on establishing and holding firm to the red lines for ecological conservation and on fostering market entities for environmental governance and ecological conservation. Pilot reforms of the compensation system for ecological and environmental damage were carried out in seven provinces and municipalities directly under the central government including Jilin.
The guidelines on bringing the river chief system into full operation were issued, and mechanisms for compensating ecological conservation efforts were improved. We moved faster to implement a new round of projects to return marginal farmland to forest and grassland, build key forest shelterbelts, comprehensively address the expansion of stony deserts, control the sources of dust storms affecting Beijing and Tianjin, and bring soil erosion under control. A basic framework for wetland conservation was put in place. The central government carried out environmental inspections.
2) The development strategy for functional zones was further implemented.
Key ecosystem service zones have been established in 676 counties and 87 forestry bureaus in key state forestry areas. A negative list for industry access to key ecosystem service zones was issued and put into force. Work got under way in 11 coastal provinces to draw up and implement plans for marine functional zones. The plan for establishing a national park system on a trial basis was implemented, with trials going ahead in national parks at the Yangtze, Yellow, and Lancang riversources, in the habitats of Siberian tigers, Far Eastern leopards, and giant pandas, in the Shennongjia area, in the Wuyi Mountains, and at the source of the Qiantang River. The mechanisms for monitoring and providing early warning on the carrying capacity of resources and the environment were basically established, with initial trials being implemented in the Beijing-Tianjin-Hebei region. The pilot project for municipal or county-level governments to integrate various types of urban plans into a single urban plan moved forward, and the plan to carry out spatial-planning trials at the provincial level was implemented. The National Land Plan (2016-2030) and the Adjustments to the General Plan for National Land Use (2006-2020) were introduced.
3) Sustained progress was made in energy conservation and emissions reduction.
The results of performance evaluations of provincial-level governments in fulfilling responsibilities for energy conservation targets during the 12th Five-Year Plan period were released to the public. The system to control both the total amount and intensity of energy and water consumption during the 13th Five-Year Plan period was established. Pilot projects to set up systems for the paid use and trade of energy consumption rights were carried out in Zhejiang, Fujian, Henan, and Sichuan provinces. We stepped up development of the circular economy, issuing the plan to create a system for extended producer responsibility and making strides in promoting circular operations within industrial parks. The plan for developing energy conservation and environmental protection industries during the 13th Five-Year Plan period was issued. The guidelines on establishing a green finance system were introduced and applied, bonds worth 229.66 billion yuan for launching eco-friendly initiatives were issued, and the energy conservation and environmental protection industries achieved robust growth in terms of both scale and strength.
4) More was done to comprehensively address environmental problems.
Stronger measures on the prevention and control of air pollution in the Beijing-Tianjin-Hebei region (2016-2017) were promulgated and implemented, and coal consumption in key areas was further cut. Coal-fired power plants were urged to swiftly upgrade their facilities and achieve ultra-low emissions. A total of 4.046 million old and high-emission vehicles were removed from roads nationwide. The action plan on environmental protection of the Yangtze Economic Belt (2016-2017) was implemented. Planning was completed on the establishment of protection zones for 319 centralized drinking water sources in 126 cities at or above prefectural level in 11 provinces and provincial-level municipalities. The national list of major drinking watersources was formulated.
We identified and cleaned up both black, malodorous water bodies and undesignated refuse dumping points in urban areas. A project to manage household refuse in rural areas got fully under way, and comprehensive measures were taken to improve the rural living environments. We issued the action plan to prevent and control soil pollution and the measures for soil environmental governance on polluted land plots, launched 14 related pilot projects aimed at prevention, control, and restoration, and also established six trial zones for comprehensively preventing and curbing soil pollution. Greater efforts were taken to comprehensively improve land in key areas contaminated by heavy metals. We continued to improve and restore the geological environment in mining areas throughout the country. We made headway in managing and controlling environmental risks and in responding effectively to environmental emergencies.
5) Our efforts to respond to climate change grew stronger.
A work plan to control greenhouse gas emissions during the 13th Five-Year Plan period was introduced. Trials and demonstrations to encourage low-carbon growth in provinces, municipalities, cities, towns, industrial parks, and communities proceeded in an orderly manner. Encouraging progress was made in establishing a national market for the trading of carbon emission rights. The Action Plan on Developing Climate Resilient Cities was promulgated.
We quickened the pace of South-South cooperation on climate change and launched cooperation projects in developing countries to set up 10 low-carbon demonstration zones, launch 100 mitigation and adaption programs, and provide 1,000 places on climate-change training programs. China was one of the first countries to sign the Paris Climate Agreement and also ratified it at a relatively early stage. The presidents of China and the United States deposited with United Nations Secretary-General Ban Ki-moon their respective country's instrument to join the Paris Agreement-the proposal to hold the ceremony, which was the first of its kind, was put forward by China, making a significant contribution toward the early entry into force of the Paris Agreement. China attended the United Nations Climate Change Conference in Marrakech, Morocco, where it played a constructive role and contributed to the overall success of the conference.
8. We moved faster to develop social programs and improve people's wellbeing, ensuring that living standards continued to rise.
We directed major efforts toward implementing targeted measures for poverty alleviation and elimination, made social policies more effective in meeting basic living needs, and ensured more equitable access to basic public services.
Box 12: Targeted Poverty Reduction Projects
1) The fight against poverty began in full swing.
The plan for poverty elimination during the 13th Five-Year Plan period was released and implemented, and over 100 billion yuan was allocated to government poverty-alleviation funds nationwide. The plan for relocating people from inhospitable areas during the 13th Five-Year Plan period was published and implemented. In line with this, related projects were launched in 22 provinces, autonomous regions, and municipalities directly under the central government, and last year's objective to provide housing for the 2.49 million people relocated from inhospitable areas was completed on time. We made great progress in reducing poverty by providing financial support and by promoting the development of locally viable industries, education, transportation, water conservancy projects, tourism, photovoltaic power facilities, e-commerce, and work-relief programs in poor areas. Coordination on poverty reduction between the western and eastern regions continued to grow. We worked to ensure the implementation of the provincial plan for promoting development and fighting poverty in contiguous poor areas during the 13th Five-Year Plan period. Greater support was given to promote revitalization and development and to reduce poverty in old revolutionary base areas such as the Sichuan-Shaanxi region and the former Central Soviet Area in southern Jiangxi. We supported extremely poor autonomous prefectures with concentrations of ethnic minorities, such as Liangshan in Sichuan, Nujiang in Yunnan, and Linxia in Gansu, to ensure they can work more quickly in building a moderately prosperous society.
2) The capacity to provide social security was constantly enhanced.
Per capita disposable personal income increased by 6.3% in real terms, and the growth rate of rural income was greater than that of urban income for the seventh year in a row. Basic pension benefits for retirees were raised by approximately 6.5%. The number of people under the basic medical insurance system exceeded 1.3 billion, and the government subsidy for basic medical insurance for rural and non-working urban residents increased from 380 yuan to 420 yuan per capita per annum. The system for granting living allowances to people with disabilities who face financial difficulties and providing a care subsidy to people with serious disabilities was put in place across the country.
3) The supply of better public services was maintained.
The gross enrollment ratio for preschool education came to 77.4%; the retention rate of nine-year compulsory education grew to 93.4%; and the gross enrollment ratio for senior secondary education reached 87.5%. The gross enrollment ratio for higher education stood at 42.7%, surpassing the average level of upper-middle-income countries. The modern vocational education system was further improved.
The system for providing basic medical care services for rural and urban residents also improved and the government subsidy for basic public health services increased to 45 yuan per capita per annum, helping to make access to services far more equitable. The Healthy China 2030 Program was issued and implemented. The number of occupational physicians and physician assistants increased to 2.31 per 1,000 people and the number of general practitioners grew to 1.53 per 10,000 people. We ensured smooth implementation of the policy to allow couples to have two children and further improved childbirth services; and China celebrated the births of 17.86 million babies over the course of the year.
The system of public cultural services was further strengthened and all provinces, autonomous regions, and municipalities directly under the central government worked out standards for providing these services. The basic elements underlying the project to develop and pass on fine Chinese cultural traditions, such as the implementation guidelines, were formulated. The Fitness for All initiative was launched, and Chinese athletes once again achieved great success at the Olympic and Paralympic Games which were held in Rio de Janeiro. Winter, water, and aviation sports, mountaineering and outdoor pursuits, as well as other sports all developed at a faster pace.
Box 13: Supply of Public Services
4) The construction of government-subsidized housing progressed steadily.
We supported government-subsidized housing projects, such as the rebuilding of run-down areas, by increasing central government budgetary investment and special funding in this area and continuing to secure direct financing through corporate bond issuance. In 2016, we rebuilt over six million housing units in run-down urban areas and renovated over 3.8 million dilapidated rural houses.
In assessing the overall situation related to the targets set out in the 2016 Plan, we can see that major targets for national and social development, such as the economic growth rate, employment levels, the consumer price index, and the balance of payments, were kept within proper range. While our performance in relation to targets reflecting the quality and benefits of development, such as those concerning scientific and technological innovation, ecological conservation and environmental protection, and people's wellbeing, was further improved. Overall, the 2016 Plan was successfully implemented.
All 19 obligatory targets were achieved as planned. Of the 43 anticipatory targets, 38 were either on target or exceeded, while performance in relation to the remaining five-targets for the primary industry, fixed-asset investment, the total import and export volume of goods, M2 money supply growth rate, and per capita disposable income of urban residents-fell short of expectations. It should be clarified that the anticipatory targets are neither mandatory nor predicted; as development objectives that the government hopes to meet, they are a reflection of the anticipated direction of national development and policy orientation. The actual performance for these targets may be higher or lower than the planned figures.
The major reasons for the discrepancies between the projected figures for these anticipatory targets and actual performance are as follows:
First, to deal with a period of supply in agricultural products outstripping demand as well as a build-up in the inventory of agricultural products and a resulting trend of depressed prices, we took the initiative to adjust what and how much we grow and breed, which caused the output of some major agricultural products to drop off. As a result, the increase in the value-added of the primary industry was slightly lower than the planned figure.
Second, a combination of insufficient market demand, a decrease in returns on investment, and low confidence among enterprises gave rise to considerable downward pressure on investment, particularly investment from private sources and in the manufacturing sector. These factors, as well as a prolonged and larger-than-expected drop in fixed-asset investment prices resulted in the increase in fixed-asset investment being lower than the anticipatory target.
Third, a range of factors, such as a stuttering global economic recovery, weak demand in the international trade market, and increasing protectionism against China, meant that, although the total import and export volume of goods began to rise steadily, it still fell short of projected figure.
Fourth, we needed to ensure that a favorable monetary and financial environment for supply-side structural reform was created. So while ensuring there was sufficient support in place for the real economy, we stayed away from strong stimulus policies affecting money supply that would have an economy-wide impact, and instead worked to deleverage, guard against risks, and prevent an asset price bubble. As a result, the growth rate of M2 money supply fell short of projected figure.
Fifth, in assessing the situation in relation to targets regarding income, we see that increases in per capita disposable personal income stayed basically in step with economic growth. The influence of downward pressure on the economy, however, caused the growth of salary-based incomes for employees in certain industries to slacken. As a result, increase in urban per capita disposable income fell short of the planned figure.
To sum up, despite complex situations both at home and abroad, we still made considerable achievements-our country's economic growth rate was still faster than most countries in the world; the quality and efficacy of development grew; the economic structure was further improved; increases in living standards were sustained; and ecosystems and the environment also saw some improvement. These achievements have not come easily. They are a result of the correct leadership of the Party Central Committee and the State Council, the collective hard work of all regions and departments,and the concerted efforts of the people of all our ethnic groups.
While recognizing our achievements, we are also keenly aware that the world economy is still undergoing profound adjustment and that impetus for economic recovery is lacking, instabilities and uncertainties are increasing, international investment and trade are inadequate, and protectionism and other inward-looking trends are on the rise. China's economy is still without a solid enough foundation for ensuring steady development and still faces a number of acute problems.
First, the real economy is beset by a structural imbalance between supply and demand. The majority of production capacity within the supply system can only meet demand for products that are at the middle-to-low end or are of a low price or poor quality. Upgrading within the consumption structure is occurring at an increasingly faster pace; by contrast, export and investment demand are decreasing. These new changes in demand are something that the supply structure has yet to properly adapt to.
Second, growth in effective demand is weak. Effective investment is growing slowly, particularly investment from private sources and in manufacturing. The delayed impact of downward economic pressure on employment, income, and consumption is now starting to show. The increasingly complex and challenging situation relating to China's foreign trade development is marked by persistently weak international demand, rising costs for multiple factors of production at home, and an increase in the pace at which industries and orders for goods are shifting to other countries.
Third, some regions, industries, and enterprises are confronted with serious difficulties. Resource-dependent areas and strongholds of traditional industry are experiencing severe downward pressure and great difficulties in development. There is a possibility that the effects of divergent growth trends and adjustments, which some industries are experiencing, will end up being transmitted throughout the industry chain. Having been pressed by insufficient market demand and comparatively high operational costs, the ability of enterprises to make a profit has decreased and a greater number of enterprises are suffering losses.
Fourth, risks are mounting in some sectors. Notable imbalances exist between government revenue and expenditures in some localities; greater efforts need to be made to guard against and control financial risks; and the real estate market is still facing serious structural challenges on two fronts, with exorbitant housing prices in some cities and overabundant inventory in others.
Fifth, environmental problems such as smog are still grave. Frequent and prolonged periods of heavy smog extending across large areas have greatly affected the work and lives of our people. At the same time, new problems in relation to workplace safety, food and medicine quality, and the people's wellbeing are also emerging.
We must give top priority to these issues, carry out studies and analysis to correctly assess the domestic and international situations, increase our awareness of potential dangers and of the lines that are not to be crossed, and maintain strategic resolve so as to ensure we produce a more effective response.
