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Li Keqiang's Government Work Report

Apr 04, 2019

China Cotton Information Network Newsletter At 9:00 am on March 5, the second meeting of the 13th National People's Congress held an opening meeting in the Great Hall of the People. Premier Li Keqiang made a government work report.

Regarding some important objectives of China's economic development in 2019, fiscal and monetary policies, tax reductions and reductions, and other policy measures involving production and operation of enterprises, the government work report has been elaborated. The following is an excerpt:

The main expected targets for economic and social development this year: GDP growth of 6%-6.5%; urban new employment of more than 11 million, urban survey unemployment rate of about 5.5%, urban registered unemployment rate of 4.5%; consumer price increase of 3 The balance of payments is basically balanced, the import and export is stable and the quality is improved; the macro leverage ratio is basically stable, the financial and financial risks are effectively prevented and controlled; the rural poor population is reduced by more than 10 million, and the income growth of residents is basically synchronized with economic growth; the ecological environment is further improved. The energy consumption per unit of GDP fell by about 3%, and the discharge of major pollutants continued to decline.

Macro policy orientation: Continue to implement a proactive fiscal policy and a prudent monetary policy, implement employment priority policies, strengthen policy coordination, ensure that the economy operates in a reasonable range, and promote sustained and healthy economic and social development.

A proactive fiscal policy needs to be strengthened. The deficit rate is scheduled to be 2.8%, which is 0.2 percentage points higher than last year's budget; the fiscal deficit is 2.76 trillion yuan, of which the central government deficit is 1.83 trillion yuan and the local fiscal deficit is 930 billion yuan. Moderately increase the deficit rate, taking into account factors such as fiscal revenue and expenditure, special bond issuance, etc., and consider setting aside policy space for possible future risks. This year's fiscal expenditure exceeded 23 trillion yuan, an increase of 6.5%. The central government's balanced transfer payments to local governments increased by 10.9%. Reform and improve the basic financial security mechanism at the county level, ease the financial operation pressure in difficult areas, and never let the basic people's livelihood guarantee problems.

A sound monetary policy should be tight and moderate. The growth rate of broad money M2 and social financing should match the nominal growth rate of GDP to better meet the needs of the economic operation to maintain a reasonable range. In actual implementation, it is necessary to supply good money to the general gate, not to engage in “big flood irrigation”, and to use various monetary policy tools flexibly to clear the channels of monetary policy transmission, to maintain a reasonable and sufficient liquidity, and to effectively alleviate the real economy, especially Private and small and micro enterprises have difficulties in financing and financing, and prevent financial risks. Deepen the reform of interest rate marketization and lower the actual interest rate. Improve the exchange rate formation mechanism and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

Implement a larger tax cut. Both inclusive tax cuts and structural tax cuts are combined, with a focus on reducing the tax burden on manufacturing and small and micro enterprises. Deepen the VAT reform, reduce the current 16% tax rate in industries such as manufacturing to 13%, and reduce the current 10% tax rate in the transportation, construction and other industries to 9%, ensuring a significant reduction in tax burdens in major industries; maintaining 6% The tax rate of the first grade remains unchanged. However, by adopting supporting measures such as increasing tax deductions for production and life service industries, it is ensured that the tax burden of all industries will only be reduced or not, and continue to move toward the third-grade and two-speed tax rate and the simplified tax system. We will do a good job in implementing the inclusive tax cuts for small and micro enterprises that were introduced at the beginning of the year. This tax cut, focusing on “water release and fish farming”, enhancing development potential and considering fiscal sustainability, is a major measure to reduce the burden on enterprises and stimulate market vitality. It is an important reform to improve the tax system and optimize the income distribution pattern. Major choices for growth, job security, and structural adjustment.

Significantly reduce the burden of corporate social security contributions. The proportion of contributions paid by the basic endowment insurance units of urban employees will be reduced to 16%. To stabilize the current method of collection, local governments may not adopt the practice of increasing the actual payment burden of small and micro enterprises during the process of expropriation system reform, and may not voluntarily collect historical arrears. Continue to implement the phased reduction of unemployment and work injury insurance rate policy. This year, we must make a substantial decline in the social security contributions of enterprises, especially small and micro enterprises. Accelerate the provincial-level overall reform of endowment insurance, continue to improve the central adjustment ratio of basic endowment insurance funds for enterprise employees, and transfer some state-owned capital to enrich social security funds. We must not only reduce the burden of corporate contributions, but also protect the social security benefits of employees, the reasonable growth of pensions and timely and full payment, so that the social security fund can be sustainable, and enterprises and employees benefit.

In the whole year, the burden of corporate tax and social security contributions was reduced by nearly 2 trillion yuan.

Efforts will be made to alleviate the problem of difficult financing for corporate financing. Reform and improve the mechanism of money and credit, timely use the deposit reserve ratio, interest rate and other quantitative and price instruments to guide financial institutions to expand credit supply, reduce loan costs, accurately and effectively support the real economy, and not allow funds to be idling or detached. Increase the targeted reduction of small and medium-sized banks, and release all funds for private and small and micro enterprise loans. Support large commercial banks to replenish capital through multiple channels, enhance credit capacity, and encourage the increase of medium and long-term loans and credit loans in manufacturing. This year, large and micro-enterprise loans of state-owned large commercial banks will increase by more than 30%. Clean up and regulate the charges for banking and intermediary services. We will improve the internal assessment mechanism of financial institutions, encourage and strengthen inclusive financial services, and effectively improve the financing tensions of small and medium-sized enterprises, and the overall financing costs must be significantly reduced.

With reforms, we will reduce the fees charged by enterprises. We will deepen the reform of power marketization, clean up the additional charges for electricity prices, and reduce the cost of electricity used in manufacturing. The average electricity price of industrial and commercial enterprises will be reduced by 10%. Deepen the reform of the toll road system, promote the reduction of the cost of crossing the bridge, and control the unreasonable approval and arbitrary charges and fines for passenger and freight vehicles. Within two years, the national highway toll gates will be basically canceled, and no-stop and fast charges will be implemented to reduce congestion and facilitate the masses. Cancel or reduce a number of railway and port charges. Special governance intermediary service charges. Continue to clean up the standard administrative fees. Accelerate the construction of the “one network” of the toll list, so that the fees are transparent and transparent, so that there is nowhere to hide.

Promote the transformation and upgrading of traditional industries. Focusing on promoting high-quality development of manufacturing industry, strengthening industrial base and technological innovation capabilities, promoting the integration and development of advanced manufacturing and modern service industries, and accelerating the construction of manufacturing power. Create an industrial Internet platform, expand "smart +", and empower the manufacturing transformation and upgrading. Support enterprises to accelerate technological transformation and equipment renewal, and expand the accelerated asset depreciation preferential policies for fixed assets to all manufacturing sectors. Strengthen the quality foundation support, promote the standard and international advanced level to improve the quality of products and services, and let more domestic and foreign users choose Chinese manufacturing and Chinese services.

Promote the formation of a strong domestic market and sustain the release of domestic demand potential. Give full play to the basic role of consumption and the key role of investment, stabilize domestic effective demand, and provide strong support for the smooth operation of the economy.

Promote the steady improvement of foreign trade. Promote diversification of the export market. Expand the coverage of export credit insurance. Reform and improve new business support policies such as cross-border e-commerce. Promote the innovation and development of service trade, guide the transformation and upgrading of processing trade, transfer to the central and western regions, and play a good role in the comprehensive bonded zone. Optimize the import structure and actively expand imports. Run the second China International Import Expo. Accelerate the improvement of customs clearance and facilitation.