Fellow Deputies,

 

On behalf of the State Council, I will now report to you on the work of the government and ask for your deliberation and approval. I also ask members of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) for their comments.

 

I. A Review of Our Work in 2021

 

Last year was a milestone in the history of the Communist Party of China (CPC) and our country. The CPC Central Committee with Comrade Xi Jinping at its core united and led the whole Party and Chinese people of all ethnic groups in accomplishing the following endeavors:

• We celebrated the centenary of the Communist Party of China;

• The 19th CPC Central Committee convened its sixth plenary session where a resolution on the Party’s major achievements and

    historical experience over the past century was adopted;

• We declared victory in the critical battle against poverty as envisaged; and

• We achieved the first centenary goal of building a moderately prosperous society in all respects on schedule and began a

    new journey toward the second centenary goal of building a modern socialist country in all respects.

 

Last year, facing complicated and challenging circumstances both in and outside of China, as well as many risks and challenges, all of us throughout the country worked hard as one. We responded to Covid-19 and pursued economic and social development in a well-coordinated way, accomplished the main targets and tasks for the year, got the 14th Five-Year Plan off to a good start, and once again secured new and major achievements in our country’s development.

 

—The economy continued to recover and grow. China’s gross domestic product (GDP) reached 114 trillion yuan, growing 8.1 percent. National fiscal revenue exceeded 20 trillion yuan, growing 10.7 percent. A total of 12.69 million urban jobs were added, and the average surveyed unemployment rate stood at 5.1 percent. The consumer price index (CPI) rose by 0.9 percent. A basic equilibrium was maintained in the balance of payments.

 

—China’s innovation capacity was strengthened. Our strategic science and technology capabilities were expanded at a faster pace. Major advances were registered in research on core technologies in key fields, and breakthroughs were made in manned spaceflight, Mars exploration, resource exploration, energy projects and other areas. Corporate spending on research and development grew by 15.5 percent. Integration of digital technology in the real economy was accelerated.

 

—The economic structure and regional development priorities were refined. Grain output reached a record high of 685 million metric tons. Value-added of the high-tech manufacturing sector grew by 18.2 percent, IT services and other producer services recorded rapid growth, and industrial chains became more resilient. Regional development strategies were well implemented, and new urbanization was steadily advanced.

 

—Reform and opening up were deepened. In key fields and sectors, a full range of major reforms were rolled out, and supply-side structural reform was deepened. New gains were made in the reform to streamline administration and delegate power, improve regulation, and upgrade services. The total number of market entities surpassed the 150-million mark. The Belt and Road Initiative saw steady high-quality development. China worked for the entry into force of the Regional Comprehensive Economic Partnership Agreement. The total volume of trade in goods grew by 21.4 percent, and growth of utilized foreign investment was sustained.

 

—Ecological conservation was enhanced. Thanks to further steps taken to prevent and control pollution, the discharge of major pollutants continued to fall and the average concentration of fine particulate matter (PM2.5) dropped by 9.1 percent in cities at and above the prefecture level. The first group of national parks were officially established. Significant improvements were made in the quality of the environment.

 

—Living standards rose steadily. Per capita disposable income increased by 8.1 percent in real terms. Achievements in poverty alleviation were consolidated and further expanded. Inputs in basic elderly care, basic medical care, and social assistance were increased. New steps were taken in the reform and development of education. Renovations began on 56,000 old urban residential communities, benefiting close to 10 million households.

 

—Our gains in Covid-19 response were consolidated. Implementation of control measures became routine, and over 85 percent of the population received a full course of vaccination. Local outbreaks were suppressed in an effective and quick manner. By making these efforts, we ensured the health and safety of the people and maintained normal order in work and life.

 

Reflecting on the past year, we can see that our achievements did not come easily. While the economy continued to recover from major shocks including Covid-19, many new changes occurred in and outside of China, and the difficulty of keeping the economy running stably mounted. In the face of such difficulty, we fully implemented the decisions and plans of the Party Central Committee with Comrade Xi Jinping at its core, followed the guiding principles of the Central Economic Work Conference; applied the new development philosophy in full, in the right way, and in all fields of endeavor; took solid steps to ensure stability on six key fronts and security in six key areas,* and made cross- and counter-cyclical adjustments with macro policies. We thus effectively dealt with all risks and challenges that arose.

 

Our main work over the past year was as follows.

 

1. We kept macro policy consistent and targeted and kept the major economic indicators within the appropriate range.

 

Our macro policies facilitated cross-cyclical adjustments and sustained the level of support necessary for economic recovery. We also took into account the need to leave ample policy space for meeting difficulties and challenges this year.

 

We established a regular mechanism to directly allocate budgetary funds to prefecture- and county-level governments and placed 2.8 trillion yuan of central government funding under this mechanism. We also improved the way local governments issue and use special-purpose bonds.

 

We implemented a prudent monetary policy to good effect and lowered required reserve ratios twice to facilitate the reduction of loan interest rates. We took well-considered steps to defuse local government debt risks and dealt prudently with major financial risks. We intensified policies to stabilize and expand employment, took solid measures to ensure employment for key groups like college graduates, and encouraged business startups and innovation. We took stronger steps to keep supply and prices of major commodities stable and to tackle supply shortages in coal and electric power.

 

Over the course of last year, all major macroeconomic indicators stayed in line with projected targets, the deficit-to-GDP ratio and macro leverage ratio decreased, and China’s economy remained one of the fastest-growing economies in the world.

 

2. We refined and implemented policies for easing the difficulties of businesses and consolidated the foundation of economic recovery.

 

As over one hundred million market entities have given several hundred million people the opportunity to go into business or secure employment, we have continued with the supportive macro-policy roadmaps and approaches that have proved effective since the epidemic began.

 

Tax and fee reductions introduced last year totaled more than one trillion yuan. In addition, tax payments were postponed for micro, small and medium enterprises (MSMEs) in manufacturing as well as coal-fired power plants and heating-supply enterprises as a temporary measure. Tax and fee reductions have proved a direct and effective way of helping enterprises ease their difficulties. In reality, they also help nurture business growth and cultivate sources of tax revenue. Last year, revenue generated from taxpaying market entities registered since 2013 reached 4.76 trillion yuan.

 

We strengthened the capacity of railway, highway, aviation and maritime transportation as well as harbors. We boosted the credit supply to industries and enterprises severely affected by Covid-19. We continued policies for micro and small businesses to defer principal and interest repayments on loans and take out more collateral-free loans. Inclusive finance lending to micro and small business by financial institutions increased by 27.3 percent, with the figure rising to over 40 percent for large commercial banks, and overall financing costs of businesses dropped steadily.

 

3. We deepened reform, expanded opening up, and continued to improve the business environment.

 

We worked harder to develop the underlying institutions for a market system, and pushed forward reforms to ensure production factors are allocated by the market. We continued to reduce the number of procedures and length of time it takes for enterprises to gain government approval. More government services were made available online. A package of successful practices in local reform were applied nationwide, and trials were conducted to improve the business environment.

 

We bolstered regulation and adopted new regulatory approaches, took action against business monopolies, and prevented the unregulated expansion of capital, thus ensuring fair market competition. We continued implementation of the three-year action plan for SOE reform and supported the healthy development of private businesses. The reform to delink industry associations and chambers of commerce from government was basically completed. The Beijing Stock Exchange and Guangzhou Futures Exchange were opened. Solid strides were made in reforms in agriculture, rural development, social programs, and ecological conservation.

 

We deepened practical cooperation to jointly advance the Belt and Road Initiative. Efforts to ensure stable performance in foreign trade and investment were intensified. We successfully hosted a number of major expos, including the China International Import Expo, the China Import and Export Fair, the China International Fair for Trade in Services, and the first China International Consumer Products Expo. Comprehensive trials for further opening up of the services sector were expanded to four more areas, and new measures for developing the Hainan Free Trade Port were adopted.

 

4. We promoted innovation-driven development and stabilized industrial and supply chains.

 

We boosted the development of national laboratories and promoted implementation of major science and technology programs. We reformed and refined the management of central government funding for scientific and technological research, increased the proportion of indirect expenses for research projects, and gave institutes more decision-making power over their research.

 

We continued the additional tax deduction for R&D expenses and increased this deduction to cover 100 percent of such expenses for manufacturing enterprises. Intellectual property right protection was strengthened. Weak links in the industrial chains of key industries were reinforced and upgraded. Digital and smart technologies were adopted in traditional industries at a faster rate, and emerging industries maintained good momentum for development.

 

5. We promoted coordinated development between urban and rural areas and between regions and improved the structure of the economy.

 

To ensure implementation of all major regional development strategies and the strategy for coordinated regional development, we rolled out new supporting measures and launched several major projects. Urbanization with the focus on county seats was promoted. To help bolster agricultural production, we ensured agricultural supplies and issued one-time subsidies totaling 20 billion yuan to grain growers.

 

We advanced rural revitalization and designated 160 key counties to receive assistance in pursuing rural revitalization. A five-year program to improve the rural living environment also got under way.

 

6. We strengthened environmental protection and promoted sustainable development.

 

We consolidated our gains in keeping the skies blue, waters clear, and land pollution-free. We encouraged farmers to use chemical fertilizer and pesticide more efficiently and promoted the recycling of livestock and poultry waste. We continued major projects to protect and restore ecosystems, and fully enforced the ten-year fishing ban on the Yangtze River.

 

China’s installed capacity of renewable power exceeded one billion kilowatts. An action plan for peaking carbon emissions by 2030 was unveiled. The China Carbon Emission Trade Exchange was launched. We took active steps to respond to climate change.

 

7. We worked to ensure and improve the people’s wellbeing and accelerated development of social programs.

 

We intensified efforts to shore up weak links in rural compulsory education, and increased subsidies in the nutrition improvement program for compulsory-education students in rural areas, benefiting over 37 million students. We reduced the homework load and eased the off-campus tutoring burden on students in compulsory education. We surpassed the targets set in the three-year enrollment expansion initiative for vocational colleges. The cap for government-subsidized student loans was raised by 4,000 yuan per person per year, benefiting over five million students.

 

The basic pension for retirees was increased. Benefits were raised for entitled groups. To improve assistance and support for those in need, the scope of the subsistence allowance scheme was expanded to include people with serious illness or severe disability from families just outside the margin of eligibility.

 

We reformed the system for disease prevention and control. Outpatient bills for more common illnesses and chronic diseases became reimbursable under the basic medical insurance scheme, and 60 percent of cross-provincial inpatient medical expenses were directly settled where they were incurred. We tightened up regulation and supervision of drugs and vaccines.

 

The three-child policy was implemented. Elderly services were improved. Government-subsidized rental housing was increased at a faster pace. We developed cultural programs and the cultural sector, and launched new cultural projects to benefit the public. A sound online environment was fostered.

 

We actively carried out public fitness activities. Chinese athletes achieved great success in the Olympic and Paralympic Games in Tokyo. And thanks to meticulous preparation, China has presented the world with a simple, safe, and splendid 2022 Winter Olympic Games. The Paralympic Games, which has just opened, will undoubtedly also be a great success.

 

8. We made progress in building a rule of law government, developed new ways of conducting governance, and maintained social harmony and stability.

 

We submitted 10 legislative proposals to the Standing Committee of the National People’s Congress (NPC) for deliberation, and formulated or revised 15 sets of administrative regulations. We conscientiously handled the proposals of NPC deputies and CPPCC National Committee members. The Outline for Building a Law-Based Government (2021–2025) was promulgated. Audit-based oversight was enhanced. The State Council continued its accountability inspections, and further implemented the Internet plus model of inspection. New approaches were adopted in conducting primary-level governance in urban and rural areas. We made solid headway in handling public complaints and clearing the backlog of cases.

 

We took stronger steps to ensure workplace safety and strengthened emergency response management. Our ability to safeguard national security was enhanced. We improved the crime prevention and control system, worked to crack down on organized crime and root out local criminal gangs on an ongoing basis, and fought telecom and cyber fraud as a priority. During severe flooding and other disasters that hit some parts of the country last year, government authorities and departments were actively involved in disaster prevention, relief, and reconstruction and earnestly strived to protect people’s lives and property.

 

We implemented the Party Central Committee’s strategic decision to exercise full and strict Party self-governance. We carried out activities to study the history of the CPC, and did more to improve Party conduct, build a government of integrity, and fight corruption. We strictly complied with the central Party leadership’s eight-point decision on improving work conduct, kept up our efforts to tackle pointless formalities, bureaucratism, hedonism and extravagance, and took further steps to ease the burdens of those working on the ground.

 

We advanced China’s major-country diplomacy on all fronts. President Xi Jinping and other Party and state leaders attended, via video link, major diplomatic events, including the 76th UN General Assembly, the 16th G20 Leaders’ Summit, the 28th APEC Economic Leaders’ Meeting, the 13th BRICS Summit, the Special Summit to Commemorate the 30th Anniversary of China-ASEAN Dialogue Relations, the opening ceremony of the Eighth Ministerial Conference of the Forum on China-Africa Cooperation, the East Asia leaders’ meetings on cooperation and the 13th Asia-Europe Meeting. We also successfully hosted a number of major diplomatic events.

 

We promoted the building of a human community with a shared future, fostered global partnerships, and played an active part in the reform and development of the global governance system. We advanced international cooperation on Covid-19 response and worked with all other countries to respond to issues and challenges global in nature. We have thus contributed our share to promoting world peace and development.

 

Fellow Deputies,

 

We owe our achievements last year to the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, the sound guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and the concerted efforts of the Party, the armed forces and Chinese people of all ethnic groups.

 

On behalf of the State Council, I wish to express sincere gratitude to all our people, and to all other political parties, people’s organizations, and public figures from all sectors of society. I express heartfelt appreciation to our fellow countrymen and women in the Hong Kong and Macao special administrative regions, in Taiwan, and overseas. I also wish to express heartfelt thanks to the governments of other countries, international organizations and friends across the world who have shown understanding and support for us in China as we pursue modernization.

 

While recognizing our achievements, we are also very clear about the problems and challenges before us.

 

The Covid-19 pandemic is still ongoing. The world economic recovery lacks drive, and commodity prices remain high and are prone to fluctuation. All of this is making our external environment increasingly volatile, grave and uncertain.

 

In pursing economic development, China is under the triple pressures of shrinking demand, disrupted supply and weakening expectations. Local Covid-19 cases are still occurring sporadically. The recovery of consumption and investment is sluggish. It is getting more difficult to maintain steady growth in exports, the supply of energy resources and raw materials remains inadequate, and imported inflationary pressure has increased. Many MSMEs and self-employed individuals face difficulty in production and business operations, and the task of stabilizing employment is more formidable. Our capacity to support innovation is lacking in key areas. The budgetary imbalances of some local governments have become more pronounced, and many potential risks are present in the economic and financial sectors. In areas that are important to the public wellbeing, numerous issues need to be addressed.

 

There is also room for improvement in the work of government. Pointless formalities and bureaucratism remain an acute issue. Cases of becoming detached from reality and acting against the public will are still frequent. Some local governments use one-size-fits-all or campaign-style approaches in policy implementation. A small number of officials either shirk their responsibilities, fail to do their jobs, or behave irresponsibly. Some officials, by disregarding serious infringements on the rights and interests of the people, have been derelict in their duties. Corruption remains a common problem in some sectors.

 

We must be more mindful of potential difficulties, face problems and challenges squarely, make every effort to deliver a satisfactory performance, and do our utmost to live up to people’s expectations.

 

 

* The six fronts refer to employment, the financial sector, foreign trade, foreign investment, domestic investment, and expectations. The six areas refer to job security, basic living needs, operations of market entities, food and energy security, stable industrial and supply chains, and the normal functioning of primary-level governments.