3. Macroeconomic policies

At the recent Central Economic Work Conference, it was noted that seeking progress while keeping performance stable was not only an important governance principle but also an effective method for carrying out economic work. It is particularly important to uphold this principle in 2017. Stability is of primary and overarching significance: under the condition of keeping performance stable, we will work for progress in key sectors, and under the condition of maintaining a well-balanced pace of work, we will strive to deliver better results. To attain the objectives for economic and social development in 2017, we must seek progress while keeping performance stable, maintain the continuity and stability of macroeconomic policies, and continue to implement a proactive fiscal policy and a prudent monetary policy. We must ensure that fiscal policy is more proactive and effective; a debt-GDP ratio of 3% is projected for this year and the government deficit will be 2.38 trillion yuan, an increase of 200 billion yuan over last year. We must also ensure that prudency and neutrality is maintained in monetary policy; both the M2 money supply and aggregate financing in the economy are expected to grow by around 12% in 2017.

At the same time, we will strengthen coordination and support between policies, make effective use of macroeconomic policies with Chinese characteristics, and see that fiscal, monetary, reform, industrial, innovation, employment, regional, investment, consumption, trade, pricing, land, and environmental protection policies work together more effectively and that their precision and efficacy increase.

-- Addressing structural conflicts between supply and demand

With fiscal and monetary policies as main pillars, and with the support of investment, consumption, and trade policies, we will work to exert the role of supply-side structural reform policy.

-- Alleviating the difficulties in the real economy

We will take strong measures to cut taxes and fees, fully utilize central government investment to guide and attract investment from private sources; continue to promote reforms on SOEs, on pricing, and on streamlining administration, delegating more powers, improving regulation, and providing better services; and provide more targeted policy guidance.

-- Promoting coordinated and integrated development between regions

We will increase fiscal and financial policy support, implement differentiated regional policies, and ensure that employment and social security policies meet basic needs.

-- Solving problems related to agriculture, rural areas, and farmers

We will fully carry out supply-side structural reform in agriculture, improve agriculture-related subsidy, investment, credit, insurance, and land-use policies, and support technological innovation in agriculture.

-- Preventing investment from being diverted out of the real economy and controlling real estate fluctuations

By utilizing prudent monetary policy and targeted industrial and land policies, we will deepen financial reforms, strengthen market oversight, and prevent and defuse fiscal and financial risks.

-- Providing guidance to ensure positive public expectations

We will do more to explain government policies and to release information to the public and will further improve the property rights protection system.

In relation to specific work, we will focus on the following six areas so as to advance overall development.

First, carrying on institutional innovation to revitalize the market

We will deepen reform in major areas and key sectors, step up innovation in systems and mechanisms, increase institutional supply, take targeted steps to solve prominent conflicts and problems holding back economic and social development, improve the overall effectiveness of reform, and strive for further breakthroughs.

Second, revitalizing the real economy to provide better products

We will intensify efforts to cut overcapacity, reduce excess inventory, deleverage, lower costs, and strengthen areas of weakness; move faster to create new industrial policies and upgrade old ones, and improve the distribution of productive forces, in a bid to bring about a shift from a supply of predominantly medium-low end products to mainly supplying medium-high end ones that conform to changes in demand.

Third, advancing innovation-driven development to foster and strengthen new driving forces

We will fully implement the innovation-driven development strategy, improve policies in support of innovation, increase the supply of innovative resources, provide greater encouragement for business startups and innovations by the general public, promote the replacement of old drivers of development with new ones, and ensure total-factor productivity increases.

Fourth, increasing effective demand to keep the macro environment stable

As the upgrade in demand continues, we will work to increase the supply of quality goods and services and the efficiency of government investment, inject vigor into private investment and private capital, and work to create a balance between supply and demand and a healthy interaction between upgraded consumption and effective investment, so as to ensure development becomes better in quality, more efficient, more equitable, and more sustainable.

Fifth, effectively preventing and defusing risks in key sectors and regions

We will become more aware of potential dangers and keep in mind worst-case scenarios. With a focus on preventing financial risks, excessive corporate leverage, an accumulation of property bubbles, inflated local government debt, and financial difficulties among county and township governments as well as other risks, we will create new and better ways of dealing with risk and never allow the line to be crossed on these risks so as to safeguard social stability.

Sixth, improving people's lives to promote social harmony

Guided by the vision of people-centered development, we will work to solve the structural problems related to employment, use targeted measures to tackle poverty, provide better basic public services, speed up the development of social programs such as education, elderly care, health and family planning, culture, and sports, and take stronger, more effective measures to improve the environment so as to ensure our people have a greater sense of benefit and a higher level of happiness.

III. Major Tasks for Economic and Social Development in 2017

In 2017, we will continue to uphold the general principle of seeking progress while keeping performance stable, take supply-side structural reform as our main task, and apply the new development philosophy, so as to steer the new normal in the economy. Our efforts will focus on the following nine areas.

1. Promoting substantive progress in the priority tasks of cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening points of weakness.

In line with the CPC Central Committee and the State Council's overall arrangements for supply-side structural reform, we will intensify efforts to fulfill the five priority tasks, reduce ineffective and inefficient supply while increasing effective supply, and improve the profit-making ability of enterprises.

1) We will make concrete efforts to scale down overcapacity.

This year, we will cut production capacity by around 50 million metric tons of steel and over 150 million metric tons of coal. At the same, we will shut down, stop, or suspend the construction of coal-fired power plants with a capacity of more than 50 million kilowatts, so as to guard against and defuse overcapacity risks in the coal-fired power industry and enhance its efficiency, while also improving the energy mix and creating space for the development of clean energy. Making full use of market-oriented and law-based means, we will work to strike an overall balance between the efforts to scale down overcapacity, ensure stable supply, improve the industrial structure, and transform and upgrade industries.