Chinese Premier Li Keqiang attends an economic roundtable with leading officials of a number of provinces and municipalities, April 11, 2016. [Photo: gov.cn]

On the morning of 11 April, Premier Li Keqiang presided over an economic roundtable with leading officials of a number of provinces and municipalities. Based on meeting discussions on the current state of the Chinese economy, Li outlined key steps for economic work in the next stage.

Leading officials from Hebei, Liaoning, Jiangsu, Shandong, Hunan, Guangdong, Chongqing and Qinghai reported on local economic performance and put forward suggestions at the roundtable. The meeting agreed that the provinces and municipalities had earnestly implemented the policies and decisions of the Party Central Committee and the State Council in 2016. As a result, the economy enjoyed a generally steady start and performed within a reasonable range. Key economic indicators such as investment, consumption and corporate profitability as well as several leading economic indicators had performed well beyond expectation and turned for the better. Market confidence had strengthened. The emergence of new growth drivers played a crucial role in cushioning the impact of weaker traditional drivers and in stabilizing employment. The policy measures taken so far have paid off. At the same time, a lot remains to be done to ensure steady growth, advance reform, and achieve further restructuring of the economy.

After hearing the reports, Premier Li said, factors for steady and sound economic growth are now on the rise, but the economy is still under heavy downward pressure. New uncertainties and destabilizing factors have continued to rise in the international landscape. The real economy faces multiple challenges and risks in some areas that cannot be underestimated. We must meet the challenges head on, withstand the pressure, solidify the foundation and galvanize those at both the central and local levels to build momentum for sustaining steady and sound economic growth.

Li said, to expand positive factors and keep the economy in a reasonable range, we must consistently advance structural reform, especially supply-side structural reform. Continued efforts should be made to streamline administration and delegate power, where a lot more is required on the part of various regions and departments. We need to earnestly carry out this year’s plan to cut the number of items requiring government approval and review or to delegate such power to authorities at lower levels. Moreover, to respond to the expectations of businesses and the public, we need to work even harder and move still faster to ease those restrictions that make it hard for people to get things done or start their own businesses.

Li highlighted the need to cut taxes. He called for resolute steps to fully implement the business tax-to-VAT pilot reform to make sure that the tax burden is lightened, not increased, for all industries, and that small and micro businesses, in particular, truly benefit from this process. It is also important to lower fees. The government will support various localities, in light of their local conditions, to reduce contributions to the five major social insurance programs and housing provident fund in a step-by-step manner under a unified national framework. Unreasonable fees will be cleaned up to ease the burden on businesses.

Li emphasized the need to encourage innovation. Steps will be taken to vigorously promote mass entrepreneurship and innovation. More open platforms and better services will be provided to boost the new economy and foster new drivers of growth.

Li said, although some sectors have seen improvements in market demand, we cannot let up in our efforts to adjust the economic structure. We must move faster to transform and upgrade traditional growth drivers, phase out outdated production capacity, digest excess capacity in steel and coal, and do what we can to help those affected in the process find new jobs and have their basic needs met.

Li stressed the importance to maintain sufficient market liquidity at a proper level. Measures will be taken to better lubricate the transmission mechanism through which the real economy is supported by the financial sector. Market-oriented approaches such as debt-for-equity swap will be introduced to gradually bring down corporate leverage ratio.