China Specifies 60 Targets to Push Forward Comprehensive Reform

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Nov. 21 – China’s central government released the “Decision on Major Issues Concerning the Comprehensive Reform (hereinafter referred to as the ‘Decision’)” on November 17, which puts forward 60 detailed targets in the following 15 areas to promote the nationwide reform:

  • Clarifying the significance and principles of the reform;
  • Improving the basic economy system;
  • Improving the modern market system;
  • Transforming the government function;
  • Deepening the fiscal and tax system reform;
  • Improving the unified urban-rural development system;
  • Establishing the “opening-up economy” system;
  • Accelerating the construction of the socialist democratic political system;
  • Promoting the construction of a “nation ruled by law”;
  • Strengthening the power restriction and supervision system;
  • Promoting the cultural innovation system;
  • Promoting innovation in social service reform;
  • Innovating the social administration system;
  • Accelerating the construction of the ecological civilization system; and
  • Deepening the national defense and military system reform.

Highlights and recommendations of the Decision are hereby summarized as below:

Resource Allocation

  • Minimizing the government’s role in resource allocation and allowing market rules, prices and competition to dictate resource allocation.

State-owned Enterprise Reform

  • Improving the State-owned asset management system and strengthening State-asset supervision by focusing on capital management;
  • Establishing several State-owned capital operating companies to support the transformation of qualified State-owned enterprises into State-owned investment companies; and
  • Improving the State-owned capital operation budget system and increasing the contribution proportion of State capital earnings to public finance to 30 percent by 2020.

Market Entry

  • Implementing a unified market entry system, which allows market players of all kinds to enter into sectors that are not on the negative list equally and legitimately.

Price Formation Mechanism

  • Perfecting a mechanism where prices are determined by the market and where there is promoting of price reforms for water, oil and natural gas, electricity, transportation and telecommunication.

Urban-Rural Land System

  • Allowing the sale, leasing and demutualization of rural, collectively-owned commercial land; and
  • Enlarging the area in which the compensated use of State-owned land is allowed, and reducing the land allocation that does not promote public welfare.

Financial System Reform

  • Allowing qualified private capital to set up financial institutions; and
  • Improving the market-based RMB exchange rate formation mechanism and accelerating the interest rate liberalization.

Technological System Innovation

  • Improving a market-based system that encourages technological innovations and exploring the establishment of intellectual property courts.

Performance Assessment System

  • Establishing a performance assessment system for officials that does not overemphasize GDP growth, and takes the following factors into consideration:
      • Resource consumption;
      • Environmental damage;
      • Ecological impact;
      • Overcapacity;
      • Technological innovation;
      • Safety production; and
      • New debt.

Administrative Approval Procedure Elimination

  • Gradually abolishing the administrative ranking of schools, research institutions and hospitals.

Tax System Reform

  • Advancing the value-added tax reform and simplifying tax rates;
  • Adjusting the scope and rate of consumption tax and subjecting energy and pollution-intensive products and high-end consumer products to consumption tax.
  • Accelerating property tax legislation, and changing the current environmental protection fee into environment tax.

Farmers’ Property Rights

  • Guaranteeing farmers’ usufructuary rights of homestead. A pilot program will be carried out in some areas to allow farmers to pledge and transfer housing property rights.

Urbanization

  • Accelerating the hukou reform to help farmers become urban residents and making basic urban public services available to all permanent residents in cities.

Investment Access

  • Promoting the opening-up of the following sectors:
      • Finance;
      • Education;
      • Culture and medical; and
      • General manufacturing.
  • Easing foreign investment restrictions imposed on the following sectors:
      • Nursery;
      • Senior care;
      • Architecture design;
      • Accounting and auditing;
      • Trade and logistics; and
      • E-commerce.

Judicial System Reform

  • Unifying the management of staff and properties of courts and procuratorates below the provincial level;
  • Separating the jurisdiction of courts from administrative divisions;
  • Gradually reducing the number of charges that subject to death penalty; and
  • Abolishing the “re-education through labor” system.

Income Distribution System

  • Protecting the investors’ legal rights and improving the investment return system for listed companies, and
  • Increasing residents’ income by diversifying investment channels.

Family Planning Policy

  • Allowing couples to have two children if one of the parents is a single child.

Environmental Protection

  • Improving the natural resource property rights system and use management system;
  • Ending the GDP assessment for poverty-alleviation areas with fragile eco-systems;
  • Implementing the compensated-use of natural resource system; and
  • Accelerating the reform of natural resources commodities pricing and gradually levying taxes on all kinds of natural resources and space.

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