Fellow Deputies,

 

The term of this government is about to come to a close. On behalf of the State Council, I will now report to you on the work of the government for your deliberation and approval and also for comments from members of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC).

 

I. A Review of Our Work in 2022 and over the Past Five Years

 

The year 2022 was a year of great importance in the history of the Communist Party of China (CPC) and our country. The Party successfully convened its 20th National Congress, during which it drew up an inspiring blueprint for building China into a modern socialist country in all respects. In the face of high winds and choppy waters in the international environment and challenging tasks in promoting reform, development, and stability at home, the Party Central Committee with Comrade Xi Jinping at its core brought together the Chinese people of all ethnic groups and led them in meeting difficulties head-on. We acted on the requirements of responding effectively to Covid-19, maintaining economic stability, and ensuring security in development, and intensified macro regulation. As a result, we stabilized the economy, steadily enhanced development quality, and maintained overall social stability, securing new and hard-won achievements in China’s development.

 

Over the past year, China’s economy was impacted by Covid-19 and other domestic and international factors beyond our expectations. However, under the strong leadership of the Party Central Committee, we carried out Covid-19 response and pursued economic and social development in an effective and well-coordinated way; and we improved and adjusted response measures in view of virus variations and the evolving dynamics of epidemic prevention and control.

 

Confronted with new downward pressure on the economy, we acted decisively and made timely adjustments. We made use of the policy tools kept in reserve over recent years, front-loaded the implementation of adopted policies, and remained firm in advancing supply-side structural reform. We unveiled and implemented a full range of policies and follow-up measures to stabilize the economy.

 

We formulated plans for the task of ensuring overall economic stability. We stepped up supervision and support to ensure policy implementation by local governments and assisted them in fully leveraging the potential of policies, and supported major economically developed provinces in shouldering greater responsibility. We gave priority to ensuring stable growth, employment, and prices, thus bringing about a steady economic recovery.

 

Gross domestic product (GDP) of the year grew by 3 percent. A total of 12.06 million urban jobs were added, with the year-end surveyed urban unemployment rate falling to 5.5 percent. The consumer price index (CPI) rose by 2 percent. The total volume of trade in goods rose by 7.7 percent. The deficit-to-GDP ratio was kept at 2.8 percent, and central government revenue and expenditure were in line with budget projections, with expenditure slightly lower than the budgeted figure. A basic equilibrium was maintained in the balance of payments, and the RMB exchange rate remained stable relative to other major global currencies. Grain output reached 685 million metric tons, an increase of 3.7 million metric tons. The environment continued to improve.

 

Overcoming great difficulties and challenges, we succeeded in maintaining overall stable economic performance. Amid a complex and fluid environment, we were able to generally accomplish the main targets and tasks for the year. Such achievements are a testament to the tremendous resilience of China’s economy.

 

We stepped up relief support to enterprises facing growing difficulties in operation and production. Impacted by Covid-19 and other factors, many enterprises and self-employed individuals experienced acute distress. Last year, value-added tax (VAT) credit refunds exceeded 2.4 trillion yuan, newly implemented tax and fee cuts amounted to more than 1 trillion yuan, and postponements were introduced for tax and fee payments of over 750 billion yuan. To ensure implementation of tax and fee reduction policies, the central government significantly increased transfer payments to local governments.

 

We provided guidance to financial institutions on increasing credit supply and lowering financing costs. Average interest rates on new enterprise loans fell to the lowest level on record, and time-limited measures were taken to defer principal and interest repayments on loans to businesses severely affected by Covid-19, such as micro, small, and medium enterprises (MSMEs), self-employed individuals, and enterprises in catering, tourism, and freight transportation, and to lower interest rates on inclusive loans to micro and small businesses. We injected fresh vitality into the market through reform. Many MSMEs and self-employed individuals in various sectors have benefited as a result.

 

To address lack of effective demand, we adopted a combination of measures to expand investment, stimulate consumption, and stabilize foreign trade.

 

Consumer spending was hit hard last year, and investment also suffered. In response, we launched several major projects set out in the 14th Five-Year Plan ahead of schedule, expedited the processes of issuing and utilizing local government special-purpose bonds, made better use of carryover quotas for special-purpose bonds in accordance with the law, and issued development and policy-backed financial instruments in two batches totaling 740 billion yuan to replenish the capital for major projects.

 

We used targeted re-lending, loan interest subsidies, and other policies to support key sectors in upgrading equipment. To speed up project screening, different government departments established joint offices and a commitment-based approval system was adopted for local governments.

 

In 2022, investments in infrastructure and the manufacturing sector increased by 9.4 percent and 9.1 percent respectively, while fixed-asset investment increased by 5.1 percent. This has, to some degree, offset the contraction in consumption. We fostered new modes and new forms of consumer spending and adopted measures including reductions and exemptions on vehicle purchase tax to boost spending on automobiles. As a result, sales of new-energy vehicles surged by 93.4 percent.

 

Initiatives were launched to stimulate spending on green and smart home appliances and green building materials in rural areas. Thanks to these efforts, we kept total retail sales of consumer products generally stable.

 

We adopted financial measures to meet people’s demand for buying their first home or improving their housing situation and took concrete steps to ensure that overdue housing projects were completed and delivered to meet people’s basic living needs.

 

We assisted foreign trade enterprises in tackling difficulties relating to raw materials, labor, and logistics, improved loading, unloading and transport efficiency in ports, and responded promptly to the concerns of foreign-funded enterprises and helped resolve their problems. The volume of trade in goods exceeded expectations, and utilized foreign investment increased steadily.

 

In response to significant employment pressure, we boosted policy support to stabilize and increase employment. Last year, the surveyed urban unemployment rate saw a notable increase for some time. Therefore, we put a stronger emphasis on ensuring stable employment when implementing fiscal, tax, financial, and investment policies. We postponed the payment of social insurance premiums by enterprises in distressed sectors, significantly increased the proportion of unemployment insurance funds returned to enterprises to keep payrolls stable, and raised subsidies for stabilizing and increasing employment. To support business startups, we implemented policies on guaranteed loans and on reducing or waiving the rent for state-owned premises.

 

We made college graduates employment a priority and provided targeted assistance to people who had difficulty finding employment. Work-relief programs in major projects were expanded. More than 32 million people were lifted out of poverty with new employment, maintaining a steady increase. Thanks to these efforts, overall employment remained stable.

 

In the face of a global surge in inflation, we strived to ensure market supply and stable prices, particularly those of food and energy. Last year, global inflation rocketed to a 40-year high, exerting great pressure on domestic price stability.

 

We responded effectively to major natural disasters such as floods and droughts. To see that no time was lost during the planting and harvest seasons, we worked to ensure unrestricted movement of agricultural machines on public roads and saw that farming was free from disruptions.

 

We issued agricultural supply subsidies to grain growers in three installments. All this helped ensure good grain harvests and stable supplies of major agricultural products.

 

We leveraged the role of coal as a major source of energy, increased advanced coal production capacity and stepped up support for power plants and heat-supply enterprises to ensure energy supplies. Despite high global inflation, we have kept overall prices at a comparatively low level, which is truly remarkable.

 

To assist people experiencing increased difficulties in their lives, we bolstered support to ensure their basic living needs. We took time-limited measures to expand the scope of subsistence allowances and other social security policies to cover more groups in difficulty. Continuing the policy on expanding unemployment insurance coverage, we provided unemployment benefits to over 10 million people in total. We also provided price subsidies for more people on low incomes, benefiting about 67 million in all.

 

We waived interest payments on government-subsidized student loans to college graduates with financial difficulties and granted extensions on the principal repayments for these loans. We provided emergency assistance to people hit hard by the epidemic or natural disasters, thus ensuring that the basic living needs of all our people were met.

 

We also fully implemented the plans set forth at the Central Conference on Economic Work and in the Report on the Work of the Government approved at the Fifth Session of the 13th National People’s Congress (NPC), and made coordinated advances in all fields of economic and social development.

 

Thanks to our dedicated work, consumer demand, market distribution, industrial production, and business expectations have all markedly improved. China’s economy is staging a steady recovery and demonstrating vast potential and momentum for further growth.

 

Fellow Deputies,

 

The past five years have been truly momentous and remarkable. Under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, we have met numerous tests, including accelerated changes on the international landscape, the Covid-19 pandemic, and a domestic economic slowdown.

 

We both won the critical battle against poverty and finished building a moderately prosperous society in all respects as scheduled, thus attaining the First Centenary Goal and embarking on a new journey to realize the Second Centenary Goal.

 

All localities and government departments followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; gained a deep understanding of the decisive significance of establishing Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and establishing the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; enhanced their consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment with the central Party leadership; stayed confident in the path, theory, system, and culture of socialism with Chinese characteristics; upheld Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and upheld the Central Committee’s authority and its centralized, unified leadership; and fully acted on the guiding principles from the 19th CPC National Congress and the plenary sessions of the 19th Party Central Committee and thoroughly implemented the guiding principles from the Party’s 20th National Congress.

 

We stayed true to the general principle of pursuing progress while ensuring stability. We fully and faithfully applied the new development philosophy on all fronts, worked to create a new pattern of development, promoted high-quality development, and ensured both development and security. As a result, we have made major achievements in economic and social development, which garnered recognition around the world.

 

-Economic strength reached new heights.

 

China’s GDP increased to 121 trillion yuan, registering an annual growth rate of 5.2 percent over the past five years. Over the past decade, GDP has increased by almost 70 trillion yuan at an annual rate of 6.2 percent. We have achieved a medium-high rate of economic growth given our large economic aggregate and transitioned to high-quality development. Government revenue increased to 20.4 trillion yuan. Annual grain output remained steady at over 650 million metric tons for many consecutive years. The total value-added of industry exceeded the 40-trillion-yuan mark, and average yearly urban jobs growth hit more than 12.7 million. Foreign exchange reserves remained stable at over US$3 trillion. These figures show that China’s economic strength has increased significantly.

 

-The critical fight against poverty was won.

 

Thanks to eight years of continued efforts, close to 100 million poor rural residents and a total of 832 impoverished counties were lifted from poverty, including more than 9.6 million poverty-stricken people relocated from inhospitable areas. We have thus, once and for all, resolved the problem of absolute poverty in China.

 

-Fruitful gains were made in scientific and technological innovation.

 

We established a new system for mobilizing resources nationwide to make key technological breakthroughs, opened a number of national laboratories, and reorganized key national laboratories in several batches.

 

Breakthroughs were made in core technologies in key fields, and a stream of innovations emerged in areas such as manned spaceflight, lunar and Martian exploration, deep sea and deep earth probes, supercomputers, satellite navigation, quantum information, nuclear power technology, airliner manufacturing, artificial intelligence, and biomedicine.

 

As spending on R&D increased from 2.1 percent to over 2.5 percent of GDP, the contribution of scientific and technological progress to economic growth exceeded 60 percent. The capacity of innovation to sustain development was enhanced continuously.

 

-The economic structure was further improved.

 

The value-added of high-tech manufacturing and of equipment manufacturing increased by an annual average of 10.6 percent and 7.9 percent respectively. China’s digital economy continued to grow in strength. The value-added of new industries and new business forms and models accounted for over 17 percent of GDP. We fully implemented the coordinated regional development strategy and major regional development strategies. The share of permanent urban residents in the total population rose from 60.2 percent to 65.2 percent. The rural revitalization strategy was implemented across the board. New drivers of growth developed at a much faster pace.

 

-Infrastructure was further upgraded.

 

Work began on the construction of major water conservancy projects such as those against floods and droughts and those for water diversion. The length of in-service high-speed railways increased from 25,000 kilometers to 42,000 kilometers, and the expressway network expanded from 136,000 kilometers to 177,000 kilometers. In rural areas, 1.25 million kilometers of road were newly built or upgraded. The passenger handling capacity of airports increased by 400 million. Installed power capacity increased by more than 40 percent. Gigabit fiber optic internet services covered all prefecture-level cities, and broadband internet was installed in every administrative village in China.

 

-Reform and opening up were deepened.

 

We deepened reform and opening up across the board in an effort to create a new pattern of development. We further promoted supply-side structural reform and reforms to streamline government administration, delegate power, improve regulation, and upgrade services. Thanks to these endeavors, a notable improvement has been made in the business environment.

 

Joint efforts to advance the Belt and Road Initiative (BRI) made solid headway. China played its part for the entry into force of the Regional Comprehensive Economic Partnership (RCEP) agreement, which has created the world’s largest free trade zone. China’s total volume of trade in goods exceeded 40 trillion yuan, registering an annual growth rate of 8.6 percent. It has thus been the top global trader for many years running. China is now both a major destination for foreign investment and a leading global outbound investor.

 

-The quality of the eco-environment improved significantly.

 

Energy consumption per unit of GDP dropped by 8.1 percent, and carbon dioxide emissions fell by 14.1 percent. In cities at and above the prefecture level, the average concentration of fine particulate matter (PM2.5) dropped by 27.5 percent and the number of days with heavy air pollution fell by over 50 percent. The proportion of surface water bodies of good quality increased from 67.9 percent to 87.9 percent.

 

China’s first five national parks were established, and over 9,000 nature reserves spanning all categories and levels were established. We have made significant strides in building a Beautiful China.

 

-Living standards rose steadily.

 

Personal income grew generally in step with economic growth, with national per capita disposable income increasing by 5.1 percent annually. The CPI rose at an annual rate of 2.1 percent. The average length of schooling for new entrants to the workforce rose from 13.5 years to 14 years. Basic old-age insurance now covers 1.05 billion people, an increase of 140 million over the past five years. Basic medical insurance saw steady improvement. Over the past decade, we have rebuilt more than 42 million housing units in run-down urban areas, and over 100 million people have moved into new apartments.

 

After many years of meticulous preparation, we successfully presented the world with streamlined, safe, and splendid 2022 Winter Olympic and Paralympic Games, which made a major contribution to boosting the popularity of winter sports in China and to promoting the Olympic movement as well as solidarity and friendship among the peoples of all countries.

 

Since Covid-19 struck more than three years ago, the CPC Central Committee with Comrade Xi Jinping at its core has placed the people and their lives above all else.

 

It has boosted supplies of medical resources and materials, made every effort to ensure treatment for all patients, effectively safeguarded our people’s health and safety, and improved and adjusted response policies and measures in light of changing conditions. The Chinese people have pulled through with fortitude and resilience and secured a major and decisive victory in the fight against Covid-19.

 

Throughout this truly remarkable endeavor, all localities, departments, and organizations have made tremendous efforts, people in various sectors have worked together to get through tough times, and all medical personnel have remained fearless in the face of adversity. Most notably, our people in their hundreds of millions have prevailed over many difficulties and challenges, made great sacrifices, and played their due part. It has not been an easy journey for anyone, but together we have overcome the huge challenge of Covid-19. As the pandemic is not yet over, we must keep working to consolidate our achievements in both Covid-19 response and economic and social development.