China will have a solid foundation for steady growth

Beijing-Li Keqiang Premier of the State Council of the People’s Republic of China says that reform is the fundamental driving force for development. “We will continue to deepen reforms to foster a world-class, market-oriented business environment governed by law and further invigorate all market entities. Improving the business environment is a crucial step in unlocking and strengthening productive forces and enhancing global competitiveness. China will slash taxes and fees to reduce the burden and pressure on market entities. At the same time, we will streamline administration, delegate power, improve compliance oversight and provide better services to give a boost to all market players. These two major initiatives are mutually reinforcing and will foster strong synergy in energizing the market and improving the business environment. Larger-scale tax and fee cuts are being implemented as scheduled. Timely measures will be taken to address problems down the road to ensure their full implementation. We will continue to deepen the above-mentioned reform of government functions to further ease market access, substantially reduce the number of items requiring administrative permits, and rescind any management measures that may involve approvals in disguised forms. Bottlenecks hindering businesses’ ability to start operations and obtain construction permits will be eliminated. We will promote fair and impartial regulation, improve government services, strengthen protection of property rights in accordance with the law, and create a market environment where companies under all types of ownership and from both home and abroad are treated as equals and compete on a level playing field.

To ease the difficulties faced by enterprises in accessing affordable financing, we have taken a combination of measures from cutting the required reserve ratio and real interest rates to expanding direct financing and supporting accelerated development of market-based venture capital. These measures have significantly improved access to financing and lowered the overall costs.

China now has 76 million plus self-employed traders, creating about 200 million jobs, and over 36 million companies, 90 percent of which are medium, small and micro businesses. Given their sheer numbers and the wide range of sectors they cover, these businesses play an important role in generating jobs, facilitating people’s daily lives and stimulating consumption. They deserve every support from the government. We will enhance inclusive financial services and encourage financial institutions to provide more loans to small and micro businesses through targeted cuts in the required reserve ratio, targeted Medium-term Lending Facility and higher tolerance for nonperforming loan ratio. We will support big enterprises in working with medium, small and micro companies in an integrated way to better leverage their comparative strengths and form more competitive industrial chains.

We will foster a more enabling environment for the development of private businesses. We will fully implement fiscal support policies such as generalbenefit tax and fee cuts, increase policy loan guarantee, make good use of the instruments for supporting bond financing for private businesses, and remove all implicit barriers to private investment. When we can secure a sound business environment where hundreds of millions of market entities are invigorated and motivated, we will have a solid foundation for the steady growth of the Chinese economy.