3. We will continue to tap the potential of domestic demand.
We will lay emphasis on tapping demand through innovative forms of supply and consolidating the foundation of domestic demand.
On the one hand, we will work to expand and upgrade consumer spending.
We will continue to advance the Ten Initiatives for Boosting Consumer Spending; respond to new trends in consumer demand; promote reform and innovation so as to increase effective supply to consumers, especially in service and green industries; and keep consumption growing steadily. Total retail sales of consumer goods are expected to increase by around 10% in 2017.
Restrictions on entry into service industries will be loosened and regulation over investment in the social domain will be relaxed. We will work to develop emerging areas of consumption such as combined medical and care services for the elderly, cultural & creative industries, and all-for-one tourism, and support nongovernmental participants in providing educational,cultural, elderly care, and medical services. Efforts will be made to promote consumption of information goods and services in areas such as digital homes, online education, and virtual reality. We will launch campaigns to speed up innovations in domestic commodity distribution, promote supply-side structural reform, and boost consumer spending. We will promote the integrated development of brick-and-mortar stores and online shopping.
China time-honored brands will be protected and carried forward. We will ensure that more domestically sold products come off the same production lines, meet the same standards, and are of the same quality as export products. We will work to achieve robust development in cold-chain logistics. Sound systems will be established to ensure the quality and safety standards of food and medicine and to allow for product traceability. Pricing oversight will be intensified and law enforcement will be stepped up to tackle monopolistic pricing so as to safeguard the legitimate rights and interests of consumers.
We will enhance incentive-based income distribution reform, implement incentive plans for key groups, and carry out trials for comprehensive and coordinated policies on increasing urban and rural incomes.
Box 14: Upgrading Consumer Spending
On the other hand, we will make targeted efforts to increase effective investment.
We will enhance efforts to bolster weaknesses in key areas and links in need of attention, so as to increase effective investment and effective supply. Total fixed-asset investment is projected to increase by around 9.0% in 2017. Investment from the central government budget is expected to be 507.6 billion yuan for the year; these funds will be channeled toward major strategic initiatives, major projects, and key construction tasks.
We will also work to stimulate private investment, earnestly implementing policies to provide encouragement and support, and further relaxing restrictions on the entry of private capital into competitive operations of basic telecommunications, exploration and exploitation of oil and gas, and defense-related science and technology. New modes of investment and financing will be created. In addition, we will continue to standardize and apply the PPP model, selecting and going ahead with projects that have adequate cash flow and expectations of steady returns. With a view to enhancing regulation over investment, we will develop new inspection and regulation methods, carry out comprehensive online monitoring, and intensify field inspections.
4. Continuing to deepen reforms in major areas and key sectors
We will work to ensure that reform measures which have been already issued are fully implemented so as to give better expression to the leading role of reform.
1) We will press ahead with reforms to streamline administration, delegate more powers, improve regulation, and provide better services.
We will cancel the requirement for government review for another group of matters, and thoroughly review and accordingly adjust manufacturing and operating permits. We will target related or similar matters and simultaneously delegate the power or cancel the government-review requirement for all of them. We will draw up a pre-business registration list for items requiring government approval and a post-business registration list for permitted operations, roll all licenses and certificates which must not be cancelled into one unified business license, and expand trial reforms to separate operating permits and business licenses.
The oversight model drawing on inspections of randomly selected entities by randomly selected inspectors and the public release of inspection results will be implemented across the board, and the reform for coordinated law enforcement will be advanced. We will strive to implement the Internet Plus government services model, and carry out a campaign to cut down on requirements for administrative certification so as to ensure greater convenience for the people. In line with the requirements for unified registration agencies, register books, bases for registration, and information platforms, we will expand the scope of the unified system for determining and registering immovable property rights, and will work to put in place a corresponding nationwide information platform.
2) We will deepen reform of SOEs, state capital, and key industries.
The reform to introduce corporate system in SOEs will be basically completed. A corporate governance structure that ensures effective checks and balances and a market operation mechanism that is highly efficient and flexible will be put in place. We will quicken the pace of trials to establish state capital investment and management companies, advance the pilot reforms to introduce a mixed ownership structure in electricity, petroleum, natural gas, railway, civil aviation, telecommunications, defense, and other sectors, and support private enterprises in participating in the reform of SOEs.
We will step up efforts to advance structural reforms in the electricity, petroleum,and natural gas sectors, adopting a methodical approach to lifting restrictions on the generation and industrial consumption of electricity and increasing the level of market-based transactions. We will proceed in an orderly manner with appropriately relaxing controls over competitive operations such as petroleum and natural-gas exploration and exploitation, and improve the petroleum and natural-gas import and export management system. Mechanisms regarding the reserve and oversight of salt will be improved.
3) We will deepen reform of the investment and financing systems.
We will implement the guidelines on deepening reform of the investment and financing systems, the regulations for managing the approval and recording of enterprise-funded projects, and the catalog of investment projects requiring government review (2016). The regulations on government investment and the measures for managing the approval and recording of enterprise-funded projects will be issued.
We will support certain localities and sectors in piloting mechanisms which allow investment projects to proceed on the basis of an undertaking submitted by enterprises to government. We will carry out trials for financial institutions to become enterprise shareholders, and improve the mechanisms whereby institutional funds, such as insurance funds, invest in projects.
4) We will deepen price reform.
We will basically complete nationwide reform of electricity-transmission and -distribution prices on provincial-level grids, with all prices being made available to the public. We will initiate trial price reforms for electricity transmission and distribution through regional power grids in the northeast and northwest, set prices for electricity distribution through local and newly-built power grids, and promote market-based pricing for the generation and supply of electricity where conditions allow. Improvements will be made to the pricing mechanisms and subsidy measures for new energy. We will set prices for natural gas transmission through trans-provincial pipelines. We will press ahead with price reform of medical services, advancing across the board price reforms of medical care and medicine in urban public hospitals and charging for medical treatment according to illness type.
5) We will develop a market based on fair competition.
In implementing the guidelines on improving the property rights protection system and ensuring law-based protection of property rights, we will redouble efforts to strengthen systems in this regard. We will enhance the vitality of the private sector, and work to develop a new relationship between government and business. We will issue and implement guidelines on nurturing and protecting entrepreneurialism. We will fully implement the review system to ensure fair competition, and resolutely prevent the promulgation of any policies and measures that eliminate or stifle competition. We will strictly investigate and prosecute major and typical antitrust cases, and work to prevent and curb monopolistic practices. Work on establishing the social credit system will be moved forward. We will put in place a nationally unified system for sharing information on credit, and extend to more areas the mechanism to provide joint incentives to those who act in good faith and to take joint punitive actions against those who act in bad faith.
Box 15: Protection of Property Rights and Entrepreneurialism
6) We will steadily advance reform of the fiscal, tax, and financial systems.
We will work faster to carry forward the reform to appropriately divide fiscal authority and spending responsibilities between the central and local governments. We will also draw up an overall plan for revenue sharing between the central and local governments. We will improve local tax systems and regulate the debt financing activities of local governments.
We will prudently advance reform of the financial oversight system, and improve the macro-prudential regulation system for the financial sector. The market-based mechanism for setting the RMB exchange rate will be further improved. We will refine the governance structure of state-owned commercial banks, deepen reform of the multilevel capital market system, move ahead with revising the Securities Law, and improve reform of the stock issuance system. We will accelerate development of modern insurance services.
5. Focusing on revitalizing the real economy
We will remain committed to ensuring innovation drives development forward, prioritize improving quality and core competitiveness, and ensure brand development leads the way in industrial upgrading. We will enhance overall capacity for making innovations and accelerate the development of new drivers of growth, the growth of new industries, the transformation and upgrading of traditional industries, and the replacement of old drivers of growth with new ones.
1) We will work faster to foster and develop new drivers for economic growth.
We will work to deliver decisive progress in pilot reforms for all-around innovation in eight areas. Policies will be introduced to foster and develop new drivers of growth and regulate internet market access. We will support and guide the development of the sharing economy to enable greater efficiency in the use of resources. We will establish a consultation system for national decisions on science and technology, reform the evaluation systems for science and technology, coordinate efforts to advance reform of the management of central government-funded science and technology initiatives and their funding, and pilot profit distribution policies oriented toward strengthening the value ascribed to knowledge.
We will increase investment for the construction of information, civil-space, and major science-and-technology infrastructure; support the establishment of comprehensive national science centers in Huairou in Beijing, Zhangjiang in Shanghai, and Hefei in Anhui; finish building a group of industrial innovation centers; and promote the establishment of a nationally unified system of big data centers. We will continue developing national innovation demonstration areas, intensify efforts to promote collaborative innovation, expand regional trials and demonstrations for the commercialization and application of scientific and technological advances, and build innovation demonstration zones for the National Agenda for Sustainable Development.
Major national science and technology projects will continue, and major projects of the Sci-Tech Innovation 2030 Agenda will be launched. National laboratories for major fields of innovation and a group of national technological innovation centers will be built. We will support the establishment of science and technology innovation centers in Beijing and Shanghai. Additional demonstration centers for entrepreneurship and innovation as well as maker spaces for specialized crowd innovation will also be opened.
We will undertake activities to encourage entrepreneurship and innovation among research institutes, enterprises, and social organizations, and will roll out a range of strong measures that focus on tackling those bottlenecks that are stifling the market-based operation of platforms for entrepreneurship and innovation and that are hindering the cultivation of entrepreneurial personnel. We will make good use of government funds for guiding venture capital to promote its sustained and sound development. We will work to further strengthen the brands of the National Week for Entrepreneurship and Innovation and the Innovating China Tour so as to build a sustainable, positive environment for entrepreneurship and innovation.
2) We will work to promote the continued and sound development of emerging industries.
In order to strengthen strategic emerging industries, we will set up the National Strategic Industry Development Fund, and utilize market-based means to carry out a group of systemic projects that give full play to the principal role of enterprises in cutting-edge and strategically important fields, such as new materials, new energy, artificial intelligence, integrated circuits, biomedicine, and 5G mobile networks. We will press ahead with the "Internet Plus" and big data initiatives, and integrate the development of the internet, the Internet of Things, and cloud computing with economic and social development. We will further boost broadband speeds and lower rates for internet services so as to reduce the costs of innovation and business startup and support industrial upgrading. We will strengthen the innovation-driven, integrated development of the military and civilian sectors by advancing the development of major demonstration programs for military-civilian integration in space, marine, cyberspace, and other fields.
3) We will help accelerate the transformation and upgrading of traditional industries.
The Made in China 2025 initiative will be further implemented. We will launch campaigns to improve product quality and branding within the equipment manufacturing industry, to enhance product variety and quality and create name brands in the consumer goods industry, to strengthen service-embedded manufacturing, and to further integrate the internet into the manufacturing industry. We will work to ensure quality standards for manufacturing improve, carrying out extensive quality improvement activities and ensuring stronger all-around quality management.
We will consolidate the technological foundations for ensuring product quality and tighten quality supervision. We will promote workmanship, foster a culture of workmanship, and refine related incentive mechanisms. We will strive to see Chinese workers exemplify workmanship and Chinese brands enjoy international recognition.
We will press ahead with development of national demonstration zones for smart manufacturing as well as manufacturing innovation centers. We will continue to implement projects to promote green manufacturing, strengthen the foundations of industry, and spur innovation in high-end equipment manufacturing. We will strengthen the foundations of industry and continue to help implement the packages of major projects aimed at promoting transformation and upgrading of the manufacturing industry, with a focus on supporting 10 major projects, including those to promote smart-technology upgrades by enterprises, improve basic capacity, advance green manufacturing, and develop high-end equipment. We will work to promote transformation and upgrading of the automobile industry. The plan to upgrade national demonstration centers for new industrialization will be put into action. We will promote the transformation and upgrading of raw materials, transportation, energy, and other basic industries with a view to expediting the development of modern comprehensive transportation systems, and implementing the strategy for revolutionizing energy generation and consumption.
4) We will advance innovation-driven development of the service economy.
Guidelines on the innovation-driven development of the service economy will be worked out, and a new round of comprehensive trial reforms will be undertaken to accelerate the development of new types and models of business in the service sector. We will carry out dedicated campaigns to bolster points of weakness in the service sector with a focus on improving quality, promoting standardized development, and providing better IPR services. We will continue to implement projects to promote innovation in high-tech services.