V. Applying a New Vision of Development and Developing a Modernized Economy
To deliver on the two centenary goals, realize the Chinese Dream of national rejuvenation, and steadily improve our people’s lives, we must continue to pursue development as the Party’s top priority in governance; we must unleash and develop productive forces, continue reforms to develop the socialist market economy, and promote sustained and sound economic growth.
China’s economy has been transitioning from a phase of rapid growth to a stage of high-quality development. This is a pivotal stage for transforming our growth model, improving our economic structure, and fostering new drivers of growth. It is imperative that we develop a modernized economy. This is both an urgent requirement for getting us smoothly through this critical transition and a strategic goal for China’s development. We must put quality first and give priority to performance. We should pursue supply-side structural reform as our main task, and work hard for better quality, higher efficiency, and more robust drivers of economic growth through reform. We need to raise total factor productivity and accelerate the building of an industrial system that promotes coordinated development of the real economy with technological innovation, modern finance, and human resources. We should endeavor to develop an economy with more effective market mechanisms, dynamic micro-entities, and sound macro-regulation. This will steadily strengthen the innovation capacity and competitiveness of China’s economy.
1. Furthering supply-side structural reform. In developing a modernized economy, we must focus on the real economy, give priority to improving the quality of the supply system, and enhance our economy’s strength in terms of quality. We will work faster to build China into a manufacturer of quality and develop advanced manufacturing, promote further integration of the internet, big data, and artificial intelligence with the real economy, and foster new growth areas and drivers of growth in medium-high end consumption, innovation-driven development, the green and low-carbon economy, the sharing economy, modern supply chains, and human capital services. We will support traditional industries in upgrading themselves and accelerate development of modern service industries to elevate them to international standards. We will move Chinese industries up to the medium-high end of the global value chain, and foster a number of world-class advanced manufacturing clusters.
We will strengthen infrastructure networks for water conservancy, railways, highways, waterways, aviation, pipelines, power grids, information, and logistics. We will continue efforts to cut overcapacity, reduce excess inventory, deleverage, lower costs, and strengthen areas of weakness, and work to achieve a dynamic balance between supply and demand by improving the allocation of available resources and increasing high-quality supply. We will inspire and protect entrepreneurship, and encourage more entities to make innovations and start businesses. We will build an educated, skilled, and innovative workforce, foster respect for model workers, promote quality workmanship, and see that taking pride in labor becomes a social norm and seeking excellence is valued as a good work ethic.
2. Making China a country of innovators. Innovation is the primary driving force behind development; it is the strategic underpinning for building a modernized economy. We should aim for the frontiers of science and technology, strengthen basic research, and make major breakthroughs in pioneering basic research and groundbreaking and original innovations. We will strengthen basic research in applied sciences, launch major national science and technology projects, and prioritize innovation in key generic technologies, cutting-edge frontier technologies, modern engineering technologies, and disruptive technologies. These efforts will provide powerful support for building China’s strength in science and technology, product quality, aerospace, cyberspace, and transportation; and for building a digital China and a smart society.
We will improve our national innovation system and boost our strategic scientific and technological strength. We will further reform the management system for science and technology, and develop a market-oriented system for technological innovation in which enterprises are the main players and synergy is created through the joint efforts of enterprises, universities, and research institutes. We will support innovation by small and medium-sized enterprises and encourage the application of advances in science and technology. We will foster a culture of innovation, and strengthen the creation, protection, and application of intellectual property. We should cultivate a large number of world-class scientists and technologists in strategically important fields, scientific and technological leaders, and young scientists and engineers, as well as high-performing innovation teams.
3. Pursuing a rural vitalization strategy. Issues relating to agriculture, rural areas, and rural people are fundamental to China as they directly concern our country’s stability and our people’s wellbeing. Addressing these issues should have a central place on the work agenda of the Party, and we must prioritize the development of agriculture and rural areas. To build rural areas with thriving businesses, pleasant living environments, social etiquette and civility, effective governance, and prosperity, we need to put in place sound systems, mechanisms, and policies for promoting integrated urban-rural development, and speed up the modernization of agriculture and rural areas.
We will consolidate and improve the basic rural operation system, advance reform of the rural land system, and improve the system for separating the ownership rights, contract rights, and management rights for contracted rural land. Rural land contracting practices will remain stable and unchanged on a long-term basis; the current round of contracts will be extended for another 30 years upon expiration. We will press ahead with reform of the rural collective property rights system, safeguard the property rights and interests of rural people, and strengthen the collective economy. We must ensure China’s food security so that we always have control over our own food supply. We will establish industrial, production, and business operation systems for modern agriculture, and improve the systems for supporting and protecting agriculture. We will develop appropriately scaled agricultural operations of various forms, cultivate new types of agribusiness, improve specialized agricultural services, and encourage small household farmers to become involved in modern agriculture.
We will promote the integrated development of the primary, secondary, and tertiary industries in rural areas, support and encourage employment and business startups there, and open up more channels to increase rural incomes. We will strengthen basic services in rural communities, and improve the rural governance model which combines self-governance, rule of law, and rule of virtue. We will train professional rural service personnel who have a good knowledge of agriculture, love our rural areas, and care about rural people.
4. Implementing the coordinated regional development strategy. We will devote more energy to speeding up the development of old revolutionary base areas, areas with large ethnic minority populations, border areas, and poor areas. We will strengthen measures to reach a new stage in the large-scale development of the western region; deepen reform to accelerate the revitalization of old industrial bases in the northeast and other parts of the country; help the central region rise by tapping into local strengths; and support the eastern region in taking the lead in pursuing optimal development through innovation. To this end, we need to put in place new, effective mechanisms to ensure coordinated development of different regions.
We will create networks of cities and towns based on city clusters, enabling the coordinated development of cities of different sizes and small towns, and speed up work on granting permanent urban residency to people who move from rural to urban areas. We will relieve Beijing of functions nonessential to its role as the capital and use this effort to drive the coordinated development of the Beijing-Tianjin-Hebei region; and we will develop forward-looking plans and adopt high standards for building the Xiongan New Area. We will facilitate the development of the Yangtze Economic Belt by promoting well-coordinated environmental conservation and avoiding excessive development. Support will be given to resource-depleted areas in their economic transformation. We will accelerate development in the border areas, and ensure their stability and security. We will pursue coordinated land and marine development, and step up efforts to build China into a strong maritime country.
5. Accelerating efforts to improve the socialist market economy. In our economic reforms, we must concentrate on improving the property rights system and ensuring the market-based allocation of factors of production, so that property rights act as effective incentives. We should ensure free flows of factors, flexible prices, fair and orderly competition, and that business survival is determined by competition.
We will improve the systems for managing different types of state assets, and reform the system of authorized operation of state capital. In the state-owned sector, we will step up improved distribution, structural adjustment, and strategic reorganization. We will work to see that state assets maintain and increase their value; we will support state capital in becoming stronger, doing better, and growing bigger, and take effective measures to prevent the loss of state assets. We will further reform of state-owned enterprises, develop mixed-ownership economic entities, and turn Chinese enterprises into world-class, globally competitive firms. We will introduce a negative list for market access nationwide, sort through and do away with regulations and practices that impede the development of a unified market and fair competition, support the growth of private businesses, and stimulate the vitality of various market entities.
We will deepen reforms in the business sector, break administrative monopolies, preclude the forming of market monopolies, speed up the reform of market-based pricing of factors of production, relax control over market access in the service sector, and improve market oversight mechanisms. We will develop new methods to improve macro-regulation, give full play to the strategic guidance of national development plans, and improve mechanisms for coordinating fiscal, monetary, industrial, regional, and other economic policies.
We will improve systems and mechanisms for stimulating consumer spending, and leverage the fundamental role of consumption in promoting economic growth. We will deepen reform of the investment and financing systems, and enable investment to play a crucial role in improving the supply structure. We will expedite the creation of a modern public finance system, and establish a fiscal relationship between the central and local governments built upon clearly defined powers and responsibilities, appropriate financial resource allocation, and greater balance between regions.
We will put in place a comprehensive, procedure-based, transparent budget system that uses well-conceived standards and imposes effective constraints; and we will implement performance-based management nationwide. We will deepen reform of the taxation system, and improve the local tax system. We will deepen institutional reform in the financial sector, make it better serve the real economy, increase the proportion of direct financing, and promote the healthy development of a multilevel capital market. We will improve the framework of regulation underpinned by monetary policy and macro-prudential policy, and see that interest rates and exchange rates become more market-based. We will improve the financial regulatory system to forestall systemic financial risks.
6. Making new ground in pursuing opening-up on all fronts. Openness brings progress, while self-seclusion leaves one behind. China will not close its door to the world; we will only become more and more open. We should pursue the Belt and Road Initiative as a priority, give equal emphasis to “bringing in” and “going global,” follow the principle of achieving shared growth through discussion and collaboration, and increase openness and cooperation in building innovation capacity. With these efforts, we hope to make new ground in opening China further through links running eastward and westward, across land and over sea.
We will expand foreign trade, develop new models and new forms of trade, and turn China into a trader of quality. We will adopt policies to promote high-standard liberalization and facilitation of trade and investment; we will implement the system of pre-establishment national treatment plus a negative list across the board, significantly ease market access, further open the service sector, and protect the legitimate rights and interests of foreign investors. All businesses registered in China will be treated equally. We will improve the balance in opening our different regions, and open the western region wider. We will grant more powers to pilot free trade zones to conduct reform, and explore the opening of free trade ports. We will develop new ways of making outbound investments, promote international cooperation on production capacity, form globally-oriented networks of trade, investment and financing, production, and services, and build up our strengths for international economic cooperation and competition.
Comrades, Unlocking and developing the productive forces is a fundamental task of socialism. We must inspire creativity and vitality throughout society, and strive to achieve better quality, more efficient, fairer, and more sustainable development.