关于2016年国民经济和社会发展计划执行情况与2017年国民经济和社会发展计划草案的报告

Report on the Implementation of the 2016 Plan for National Economic and Social Development and on the 2017 Draft Plan for National Economic and Social Development

——2017年3月5日在第十二届全国人民代表大会第五次会议上

Delivered at the Fifth Session of the Twelfth National People's Congress on March 5, 2017

国家发展和改革委员会

National Development and Reform Commission

1. We developed new and better ways of conducting macro regulation to keep the economy operating within an appropriate range.

On the basis of range-based regulation, we strengthened targeted and well-timed regulation and pursued a more proactive fiscal policy as well as a prudent monetary policy that retained an appropriate degree of flexibility so as to ensure that economic performance was stable. China's gross domestic product (GDP) rose to 74.41 trillion yuan, an increase of 6.7%, meeting our projected target.

图表1：2016年各季度国内生产总值和经济增长率 新华社发

1) Consumption played a more fundamental role.

The action plan to stimulate industrial transformation and upgrading through increased consumption was formulated, and the Ten Initiatives for Boosting Consumer Spending were implemented. We implemented the policies for promoting green consumption, transformation of physical retail businesses through innovation, and integrated development of transportation and logistics. The guidelines on further boosting consumer spending in tourism, culture, sports, health, elderly care, education, and training services were promulgated and implemented; the consumption of services flourished; and consumer spending on automobiles and other physical goods was increased and upgraded. We formulated the guidelines on providing incentives to key groups to promote an overall increase in urban and rural incomes, and people's ability to consume continued to increase. Total retail sales of consumer goods for the year rose by 10.4%. Consumption served as a major driver of economic growth, making a 64.6% contribution. And there was a further improvement in the ratio between consumption and investment.

专栏1：十大扩消费行动 新华社发

2) Investment sustained steady growth.

Strengthening areas of weakness, making structural adjustment, and increasing supply were our primary focus in working to increase rational and effective investment. We further improved the structure of investments falling within the central government budget, took initial steps to set up the reserve of government investment projects and formulate the three-year rolling investment plan, and stepped up the construction of major projects. We channeled great energy into stimulating private investment, formulated a 26-point policy to ensure its sound development, and worked to expand the application of public-private partnership (PPP) models. Total fixed-asset investment for the year rose by 7.9%, of which 61.2% came from nongovernmental sources (excluding rural households).

专栏2：促进民间投资健康发展 新华社发

3) The overall employment situation remained positive.

We sped up efforts to develop community-level facilities providing employment and social security services and to establish public vocational training centers, provided better services to college graduates as well as to workers laid off due to the scaling-down of overcapacity, and continued to advance pilot projects to support rural migrant workers returning home to set up businesses. An additional 13.14 million urban jobs were created over the year, and the registered urban unemployment rate stood at 4.02% at the end of 2016.

图表2：城镇新增就业 新华社发

4) Overall prices were generally stable.

We increased regulation over commodity prices, effectively carried out regulation over the price of hogs, and strengthened monitoring, early warning, regulation, and oversight over the prices of major commodities such as vegetables during the flood season and major holidays. Oversight over pricing was tightened up and law enforcement efforts to counter monopolistic pricing intensified with numerous cases being investigated and dealt with. The consumer price index (CPI) for the year rose by 2.0%.

5) Risks and challenges were handled appropriately.

We stepped up reviews to verify the authenticity of outbound investment projects and worked to ensure the sound and orderly development of overall outbound investment. We employed market-oriented, law-based measures to guard against and defuse bond default risks. Policies tailored to local conditions were implemented to regulate the real estate market on a per-category basis. We worked to guard against and deal with severe flooding in some regions, particularly the Yangtze basin, as well as other natural disasters, and acted quickly to provide effective rescue and relief so as to minimize damage, and ensure recovery and reconstruction efforts proceeded in an orderly manner.

2. We worked to secure solid progress in supply-side structural reform,achieving initial success in the five priority tasks of cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening points of weakness.

By enhancing policy guidance and support and establishing an effective work mechanism, we achieved preliminary progress in our efforts to carry out the five priority tasks.

1) Annual targets for cutting overcapacity were met ahead of schedule and were surpassed.

The State Council's Guidelines on Addressing Overcapacity and Achieving a Turnaround in the Steel Industry (G.F. [2016] No. 6) and the State Council's Guidelines on Addressing Overcapacity and Achieving a Turnaround in the Coal Industry (G.F. [2016] No. 7) were published and implemented. We launched three initiatives which focused on shutting down outdated production facilities, dealing with projects that violated laws and regulations, and carrying out coordinated law enforcement, thereby strictly controlling the expansion of production capacity, ensuring the shutting down of outdated production facilities was accelerated, and guiding the orderly elimination of overcapacity. We made appropriate arrangements to ensure that laid-off employees were resettled and provided employment and that enterprise debts were properly handled; and we encouraged businesses affected by overcapacity to merge, restructure, transform, and upgrade, or optimize business distribution.

We took timely and appropriate action in responding to the effects of adjustments in supply and demand and price fluctuations. In 2016, we reduced excess production capacity by over 65 million metric tons of steel and over 290 million metric tons of coal; both numbers surpassed the targets for the year. The steel and coal industries operated more efficiently: cases of companies being in arrears were reduced, cash-flow problems were eased, and problems of insufficient investment in workplace safety, overdue wages, and outstanding payments were alleviated to some extent. Overall, the performance of both industries as well as market expectations improved.

2) Work to cut excess inventory surged ahead.

We promoted the granting of urban residency to people who have moved to cities from rural areas and worked to ensure the housing needs of new urban residents were met, such that by the end of 2016, the area of commodity housing for sale was 49.91 million square meters less than it was at the end of 2015. We further expanded the use of direct monetary housing compensation for people displaced by the rebuilding of run-down urban areas. 2.94 million households received monetary housing compensation over the year, accounting for 48.5% of the year's newly-commenced projects to rebuild run-down urban areas; this marked an increase of 18.6 percentage points over 2015.

3) Efforts to deleverage delivered initial results.

The State Council's Guidelines on Proactively yet Prudently Lowering Enterprise Leverage Ratios (G.F. [2016] No. 54) were published and implemented. We encouraged business mergers and restructuring, promoted market-oriented and law-based debt-for-equity swaps, developed equity financing, and adopted other comprehensive measures so as to reduce business leverage ratios in an active yet prudent way. We launched an initiative for enterprises to engage in market-based debt-for-equity swaps with banks. By the end of 2016, a number of commercial banks had selected, via relevant agencies, 20 leading enterprises, which, despite having relatively high debt-to-asset ratios, had good prospects for development. Framework agreements on debt-for-equity swaps were drawn up with these enterprises on the basis of independent consultation, and are worth over 250 billion yuan. At the end of 2016, the debt-to-asset ratio of nationwide industrial enterprises with annual revenue from their main business operations of 20 million yuan or more was 55.8%, a year-on-year decrease of 0.4 percentage point.

4) Significant progress was achieved in reducing costs.

The State Council's Circular on Publishing the Work Plan on Reducing the Costs of Enterprises in the Real Economy (G.F. [2016] No. 48) was published and implemented. We continued to promote the reforms to streamline administration, delegate more powers, improve regulation, and provide better services, thereby reducing transaction costs imposed by government. We extended trials of replacing business tax with value added tax (VAT) to all sectors and appropriately lowered the ratio of enterprise contributions for old-age insurance, medical insurance, unemployment insurance, workers' compensation, maternity insurance, and housing provident fund schemes for the current stage. We implemented the mechanism for coupling the price of coal with that of electricity, promoted price reform of electricity transmission and distribution, increased the number of direct sales by electricity generation companies to users, and improved the implementation of the basic electricity pricing scheme, so as to lower enterprise energy costs. We reviewed and standardized fees and charges levied on enterprises related to imports and exports and financial services, pushed forward in reforming the freight transportation system for railways, launched a cost-reduction and performance-improvement campaign within the logistics industry, and published and implemented an action plan to develop logistics channels.

In 2016, industrial enterprises with annual revenue from their main business operations of 20 million yuan or more reduced their costs by 0.1 yuan per 100 yuan of income from their main business operations and increased their profit rate by 0.19 percentage point on a year-on-year basis.

图表3：降低实体经济企业成本 新华社发

5) Efforts to strengthen points of weakness were intensified.

Keeping in mind the need to secure both short-term and long-term benefits and focusing on the development of both infrastructure and management and services, we pursued market-based investment and financing initiatives to stimulate bank loans and other forms of investment and worked to strengthen points of weakness in the key areas of poverty alleviation, post-disaster water conservancy restoration and reconstruction, social programs, innovation capacity-building, new industry, and other areas in need of attention. We achieved our target of helping more than 10 million rural residents lift themselves out of poverty over the course of the year.

3. We made new breakthroughs in reform and opening up, unleashing new impetus for economic and social development.

We launched a number of crucial signature reform plans, made breakthroughs in reform of major areas and key sectors, and improved the performance of China's open economy.

1) Reforms to streamline administration, delegate more powers, improve regulation, and provide better services were intensified.

The goal of the current administration to cut the number of items requiring government review by a third had been achieved ahead of schedule. On that basis, last year we cancelled the requirement on a further 165 items for review by State Council departments and authorized local governments. We also overhauled and standardized 192 items of intermediary services for government review as well as 220 items of approvals and accreditations for professional qualifications. The Catalog of Investment Projects Requiring Government Review was revised for the third time. Reform of the business system was deepened. We fully implemented the oversight model consisting of inspections of randomly selected entities by randomly selected inspectors and the public release of inspection results, made operational and post-operational oversight more effective, and promoted the Internet Plus government services model. The newly-launched reform piloting a negative list for market access yielded positive results. The four major platforms for streamlining administration, delegating more powers, improving regulation, and providing better services have all been assembled and are in operation.

专栏3：“放管服”改革 新华社发

图表4：四个平台 新华社发

2) Reform of the investment and financing systems picked up pace.

Guidelines on deepening reform of the investment and financing systems and regulations on the review and reporting of investment projects for enterprises were introduced, spurring a new round of reform throughout the investment and financing systems. We revised regulations on the management of projects for which the central government budget provides investment and loan-interest subsidies, and formulated 80 specific documents concerning the management of such projects. Significant progress was made in demonstration initiatives to attract private capital for projects such as the Ji'nan-Qingdao and Hangzhou-Shaoxing-Taizhou railway lines.

3) Price reform was deepened.

Trials to reform electricity transmission-and-distribution prices were extended to all provincial-level grids. We established a new pricing mechanism for the pipeline transportation of natural gas, and worked to ensure that the market decided citygate prices of natural gas for non-household users, who accounted for over 80% of natural-gas consumption. Markets for trading petroleum and natural gas experienced rapid development. Around 90% of cities have adopted tiered pricing for household water, electricity, and natural gas usage. Price reforms for medical services were implemented across the board and pricing for passenger rail and airline tickets became noticeably more market based. Comprehensive pricing reform on water for agricultural use registered solid progress. We improved the minimum state purchase price policy on rice and wheat and pressed on with pilot reforms for ensuring base prices for cotton and soybeans.

专栏4：重点领域价格改革 新华社发

4) Steady progress was made in the reform of State-owned Enterprises (SOEs) and major industries.

In putting in place a framework that consists of the Guidelines on Deepening Reform of SOEs as well as supplementary documents, we promulgated work plans to more quickly relieve SOEs of their obligations to operate social programs and help them address other longstanding issues, and steadily pressed ahead with the nine major tasks for deepening SOE reform and the 10 pilot SOE reforms*. We implemented the pilot reform to introduce mixed ownership for an initial group of SOEs and made progress in the trials to establish the first group of state capital investment companies.

We approved reform plans for the electricity industries in 31 provinces,autonomous regions, and municipalities directly under the central government, and released the first batch of 105 trial projects to increase the number of electricity distributors. Plans were formulated for reforming state forestry farms in all provinces, autonomous regions, and municipalities directly under the central government and for reforming key state forestry areas in Inner Mongolia, Jilin, and Heilongjiang. Trial reforms on state forestry farms were successfully concluded in Zhejiang, Hunan, Jiangxi, and three other provinces.

The plan for structural reform of the salt industry was issued, and all controls on producer, wholesale, and retail prices of salt were lifted. The system for purchasing and stockpiling corn was reformed, and the policy for temporary purchase and storage of corn in the northeast was replaced with a mechanism based on market-price purchases and supplementary subsidies. The work to reduce stockpiles of grain and cotton through the provision of policy support proceeded smoothly.

* They are to: ensure the power of the board of directors of SOEs; carry out competitive selection and employment of executives and managers; promote the professional management system; implement differentiated pay in SOEs; develop companies for state capital investment and operations; merge and reorganize central government enterprises; introduce mixed-ownership structures in some major sectors; allow employees of SOEs with mixed-ownership structures to hold shares in their employer company; make information on SOEs public; and relieve SOEs of their obligation to operate social programs and help them address any other longstanding issues.

专栏5：国有企业改革 新华社发

5) Work to create a fair and competitive market was accelerated.

The guidelines on improving the property rights protection system and protecting property rights in accordance with the law were published so as to ensure the rights and interests of economic entities under all forms of ownership are subject to law-based protection on an equal footing. Steady progress was made in the pilot reform for market-based allocation of land designated for industrial purposes. Guidelines on establishing a review mechanism within the market system to ensure fair competition were issued so as to impose direct controls on government departments preventing them from adopting policies or measures that eliminate or stifle competition.

New headway was made in developing a credit rating system, and guidelines on enhancing the credit standing of governments and individuals, and within the e-commerce sector, were formulated. More than 50 departments worked together in 12 sectors to take punitive actions against those who act in bad faith and in three sectors to provide incentives to those who act in good faith. Coordinated efforts to combat infringements and counterfeiting were enhanced, with over 170,000 cases of illegal and criminal activities being investigated and handled. Steady progress was achieved in the comprehensive trials to reform and develop the domestic commodity distribution system.

6) Fiscal, tax, and financial reforms proceeded in an orderly manner.

The State Council's Guidelines on Advancing Reform for the Sharing of Fiscal Authority and Spending Responsibilities between the Central and Local Governments (G.F. [2016] No. 49) were promulgated and implemented. We extended trials to replace business tax with VAT to all sectors, including the construction, real estate, financial, and consumer service industries, and ensured that VAT deductions cover all new immovable property of enterprises. Ad valorem rates were introduced for all resource taxes, and trial reforms to levy a water-resource tax were carried out. Reform of state-owned commercial banks as well as of development and policy-backed financial institutions were deepened. The deposit insurance system performed solidly. A number of measures for financial-sector opening up and innovation created by the China (Shanghai) Pilot Free Trade Zone were replicated in the pilot free trade zones in Guangdong, Tianjin, and Fujian. The Shenzhen-Hong Kong Stock Connect was launched.

7) Social reforms were accelerated.

Reform of the system for the use of official vehicles was completed in all organs of the CPC Central Committee and the State Council and its implementation was deepened in local Party and government bodies. A second group of trials to delink industry associations and chambers of commerce from the government were launched. Implementation of a unified registration system for immovable property was accelerated, with 100% of prefectures, prefecture-level cities, and autonomous prefectures and 98% of counties, county-level cities, and districts across the country issuing new certificates to replace old ones. Management reform for state science and technology initiatives was deepened, profit distribution policies were developed with the goal of strengthening the value ascribed to knowledge, and efforts to apply scientific and technological advances were intensified. Comprehensive education reform was stepped up.

The system of tiered diagnosis and treatment was further developed, and substantive progress was made in integrating the basic medical insurance schemes for rural and non-working urban residents. The proportion of health care expenses borne by individuals dropped to 28.9%. Guidelines on Fully Opening up the Elderly Care Market and Improving Elderly Care Services (G.B.F. [2016] No. 91) by the State Council's General Office were published and implemented. We made steady progress in reforming the pension system for employees of Party and government offices and public institutions.

We moved faster to develop philosophy and the social sciences with Chinese characteristics, and launched an initiative to encourage innovation in philosophy and the social sciences. We worked to speed up implementation of soccer reforms.

专栏6：社会领域改革 新华社发

8) The Belt and Road Initiative served as pacesetter to an open economy that saw continuous improvement.

The Belt and Road (the Silk Road Economic Belt and 21st Century Maritime Silk Road) Initiative saw rapid progress. Development of the Initiative's framework, which consists of six corridors and six channels serving multiple countries and ports*, made steady progress, enabling China and its partners to markedly increase cohesion between their development strategies and plans. China-Europe freight train services, which have registered a total of nearly 3,000 trips, were brought under a single unified brand.

A number of signature projects for international industrial-capacity cooperation got off the ground. The Addis Ababa-Djibouti Railway officially came into service-from investment and financing to technology, operation, and management and maintenance, Chinese standards were applied throughout the project, making it the first full-production-chain export of China's railway. Steady progress was achieved in the construction of major international projects including railways connecting Jakarta and Bandung (high-speed railway), China and Laos, China and Thailand, and Hungary and Serbia; the railway project in southern Malaysia; and the Gwadar Port in Pakistan.

Further steps were taken to facilitate foreign investment, ensuring that utilized non-financial foreign investment remained stable. The regulation system and institutions for outbound investment were improved, which enabled further growth of outbound non-financial investment. All coastal ports installed and started using the Single Window System for foreign trade, and all ports throughout China successfully integrated customs clearance procedures and inspection and quarantine procedures.China experienced a 0.9% fall in total imports and exports for the year, which was 6.1 percentage points less than the previous year's decrease. Trade in services grew rapidly. The RMB was officially included in the International Monetary Fund's special drawing rights (SDR) basket. Of particular note was China's hosting of the G20 2016 Hangzhou Summit which produced important and far-reaching outcomes.

* The six corridors refer to economic corridors, comprising the New Eurasian Continental Bridge, the China-Mongolia-Russia corridor, the China-Central Asia-West Asia corridor, the China-Indochina Peninsula corridor, the China-Pakistan corridor, and the Bangladesh-China-India-Myanmar corridor. The six channels refer to communications and distribution channels comprising highways, railways, airlines, waterways, pipelines, and information networks.

专栏7：重点开发开放功能平台建设 新华社发

4. We deepened implementation of the innovation-driven development strategy, spurring the growth of new drivers for economic development.

The National Strategy for Innovation-Driven Development was published and implemented. With a number of major scientific and technological advances as well as rapid growth in high-tech industries, equipment manufacturing, and strategic emerging industries, innovation has played an increasingly important role in bolstering development.

1) Innovation capacity continued to improve.

We ensured the progressive and orderly development of major science and technology innovation platforms, and deepened pilot reforms on all-around innovation in eight regions. New strides were made in setting up science and technology innovation centers in Beijing and Shanghai. Work began to establish three national demonstration zones for the transfer and commercialization of scientific and technological achievements in Hebei-southern Beijing, Zhejiang, and Ningbo. The first national technology innovation center for high-speed trains was established, and the first Chinese-standard high-speed trains for which we hold complete intellectual property rights went into service. A number of major science and technology infrastructure projects were completed such as the project to build the world's largest single-aperture radio telescope, the Five-hundred-meter Aperture Spherical Telescope (FAST). A number of significant scientific and technological advances were achieved in sectors including quantum communications, space, and aviation.

We pressed ahead with implementing major national science and technology programs, and identified major projects for the Sci-Tech Innovation 2030 Agenda. A big push was made to encourage technological innovation among enterprises, with policies being implemented in relation to extra tax deductions for R&D costs, equity-based incentives for undertaking innovation, income tax incentives for personnel who contribute their technological achievements to become company shareholders, and improvements in the methods for defining new- and high-tech enterprises.

2) Entrepreneurship and innovation initiatives were carried out across the board.

Work on establishing 28 national entrepreneurship and innovation demonstration centers moved forward on all fronts. Information service platforms for entrepreneurship and innovation policies began operating, and a whitepaper on entrepreneurship and innovation was published. The national seed fund for investing in emerging industries, the sub-funds of the seed fund for encouraging the application of scientific and technological advances, and the National SME Development Fund all came into operation. Trials got underway to allow banks to make combined debt-equity investments in startups and small businesses, and creative improvements were made to the system of guaranteed loans for business startups. The second National Week for Entrepreneurship and Innovation and the Innovating China Tour were a tremendous success. 128 platforms for entrepreneurship and innovation were developed by large-scale central government enterprises, guidelines on further improving the policies for managing the funding of central government-funded research programs were published and implemented, and mechanisms for encouraging entrepreneurship and innovation were gradually improved in research institutes and universities. All types of incubators and professional maker spaces saw continuous development. On average, 15,100 new enterprises were registered each day in 2016.

3) New technologies and industries as well as new forms and models of business flourished.

There was rapid development in industrial robotics, integrated circuits, satellite applications, general aviation, bio-industry, and other new industries, while growth in strategic emerging industries was stable. In 2016, enterprises with annual turnover of 20 million yuan or more in 27 key strategic emerging industries increased their revenues by 11.32% and profits by 13.96%. We pressed ahead with implementing the Internet Plus initiative and the national big data strategy. Artificial intelligence, virtual reality, genetic engineering, and other new technologies experienced more rapid development. The platform, sharing, and collaborative economies, along with other new business models, achieved far-reaching penetration. New forms of business mushroomed, including combined online-offline businesses, cross-border and social networking e-commerce, smart home technology, and intelligent transportation. Online retail sales for 2016 reached nearly 5.2 trillion yuan, a year-on-year increase of 26.2%, with online retail sales of goods accounting for 12.6% of total retail sales of consumer goods.

4) Transformation and upgrading of traditional industries accelerated.

We moved faster to put the Made in China 2025 strategy into place, and organized implementation of the three-year action plan to enhance core competitiveness of our manufacturing industries and the project packages for transformation and upgrading of the manufacturing sector. The eight plans for industrial application were implemented smoothly. Major breakthroughs were made in research and development on key railway equipment. A total of 226 programs to run comprehensive, standardized tests on smart manufacturing technologies and apply new manufacturing models proceeded as planned. We made progress in building the National Robot Test and Evaluation Center. An investment fund for advanced manufacturing was set up.

5) Solid steps were made in innovating and developing the service industry.

We implemented the guidelines on accelerating the development of producer and consumer services and published the implementation plan for relaxing controls over market access in the service sector. A new round of comprehensive pilot reforms in the service sector began. We allocated funds for guiding the development of the service industry and supported the establishment of 163 public-service platforms. The tertiary industry has continued to outgrow the secondary industry, and the value-added of the tertiary industry accounted for a higher proportion of GDP, reaching 51.6%.

6) Further improvements were made to infrastructure networks.

As a result of accelerated development of the modern comprehensive transportation system, the length of transportation infrastructure networks open to traffic exceeded five million kilometers. We unveiled and implemented the 100 Demonstration Projects to Improve Transportation Quality and Efficiency, 200 Transportation Projects to Help Reduce Poverty, and 300 Major Transportation Infrastructure Projects. We worked to stimulate development of multimodal transportation and the general aviation industry and integrated the development of transportation and logistics infrastructure.

The strategy on revolutionizing energy generation and consumption was launched, and energy supply capacity continued to grow stronger. The proportion of non-fossil energy consumption rose to an estimated 13.3% of total energy consumption while the proportion of coal consumption dropped to 62.0%. Fiber-optic networks were established in almost all prefecture-level cities, next-generation information infrastructure saw yet further enhancements, and China's 4G network, which is the world's largest, was completed.

专栏9：重大基础设施建设 新华社发

5. We worked to increase the capacity for sustainable agricultural development and achieved new progress in agricultural modernization.

The trend of ensuring progress while maintaining stability continued in agricultural and rural development and grain output reached 616 million metric tons, thus ensuring agriculture served as a strong pillar of economic and social development.

1) Agricultural production capacity continued to increase.

We implemented the plan to increase China's grain production capacity by 50 million metric tons, moved faster to develop high-quality farmland, and completed in full the work of designating permanent basic cropland throughout the country. As a result, our ability to guarantee national food security and the supply of major agricultural products has been further increased. New grain silos with a total capacity of 9.75 million metric tons were built. In working to optimize agricultural production while maintaining its stability, we reduced the area of land for corn kernel cultivation by 1.36 million hectares, expanded trials to cultivate feed crop or soybean crop instead of grain crop, and continued to raise overall production capacity for livestock and aquatic products.

We made steady progress in promoting green agricultural development, launching a campaign to control and prevent serious agricultural environmental pollution, establishing pilot demonstration zones for sustainable agricultural development, and securing important achievements in implementing the action plan against pollution in rural areas*. We intensified support for trials to comprehensively manage agricultural pollution from non-point sources, chernozem soils in the northeast, and former grassland now under cultivation in transition areas between cropland and grassland.

* The action plan aims to: 1) control water consumption for agricultural purposes; 2) cut the use of pesticides and chemical fertilizers; 3) use recycling as a means of handling the pollution caused by the waste of livestock and poultry farming, plastic mulch film, and straw burning.

2) Agricultural and rural infrastructure continued to improve.

We successfully implemented projects to harness small and medium-sized rivers, reinforce small, dilapidated reservoirs, build key irrigation and drainage facilities as well as upgrade supporting infrastructure, and develop small-scale irrigation and water conservancy facilities. The area of cropland under efficient water-saving irrigation exceeded 1.33 million hectares. We also launched the project to consolidate and advance efforts to ensure safe drinking water in rural areas.

A new round of power-grid improvement projects began throughout the country, including key projects for upgrading power grids in rural areas, small towns, and hub villages, and for providing power supply to all electric pump sets on rural flatlands. Transportation infrastructure and services in rural areas were continuously improved, and 290,000 kilometers of rural road were newly built or upgraded. We continued to implement broadband development projects in villages, carried out nationwide trials of providing universal telecommunications services in rural areas, and further improved rural information infrastructure.

3) Integrated development of the primary, secondary, and tertiary industries in rural areas advanced smoothly.

The "100 counties, 1,000 townships, 10,000 villages" pilot demonstration project to promote rural industrial integration was implemented, with all 137 demonstration counties undertaking active explorations on how to improve development plans, promote integration between industrial development and urbanization initiatives, establish an industry system for modern agriculture, and innovate investment and financing mechanisms in the agricultural sector. We accelerated efforts to establish incubation parks for integrated development of industries in rural areas, develop diverse entities that integrate primary, secondary, and tertiary industry operations, and cultivate a group of leading enterprises in agricultural industrialization. New industries and new forms of business in rural areas experienced robust growth.

4) Solid results were achieved in rural reform.

We issued and implemented the Measures for Separating Land Ownership Rights, Contract Rights, and Management Rights in Rural Areas, and determined, registered, and certified contracted rural land-use rights for more than 53.3 million hectares of land. The determination and registration of integrated housing ownership and land-use rights for rural housing land and rights for collectively owned land designated for construction was accelerated. We drew up the Guidelines on Reforming the Rural Collective Property Rights System, and moved ahead with pilot reforms to grant shareholder rights for rural collective assets as well as trials to permit the sale of land contract rights. We carried out trials in a prudent and orderly fashion to allow rural residents to mortgage their contracted land-use rights and residential property rights. The cases of transferring or mortgaging rural land use rights have continually increased. New types of agribusinesses thrived and their number rose to more than 2.7 million.

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.

图表5：“一带一路”建设 新华社发

图表6：京津冀协同发展 新华社发

图表7：长江经济带发展 新华社发

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.

专栏10：“四大板块” 新华社发

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.

专栏11：新型城镇化建设 新华社发

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%.

图表8：生态文明建设和绿色发展 新华社发

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.

专栏12：精准扶贫精准脱贫工程 新华社发

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.

专栏13：公共服务供给 新华社发

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.

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.

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.