6. Deepening reform in key areas and enhancing the vitality of economic and social development

We lost no opportunity to carry out reform and achieved great progress in a number of key areas.

We vigorously reformed the fiscal and taxation systems, improved the system of transfer payments and established a mechanism for ensuring basic funding for county-level governments across the country. County- and township-level governments became more capable of providing basic public services. We put in place the basic framework of a system of budgets for public finances, government-managed funds, state capital operations and social security funds, and all extrabudgetary funds were placed under budgetary management. We unified the corporate tax systems for domestic and overseas-funded enterprises, implemented VAT reform, reformed pricing of refined oil products and related taxes and fees, carried out pilot projects to replace business tax with VAT, and reformed the resource tax system. This strengthened the role of the fiscal and taxation systems in accelerating the change of the growth model.

We comprehensively deepened reform of the financial system. Specifically, we smoothly completed the transformation of large state-owned commercial banks into joint-stock companies and carried out reform of policy-based financial institutions in an orderly way. We made notable achievements in reforming rural credit cooperatives, implemented new oversight and supervision standards in the banking industry, launched the ChiNext stock market, and introduced stock index futures and securities margin trading. We deepened reform of the insurance industry and opened it wider. We improved the mechanism for setting the RMB exchange rate, made steady progress in making interest rates more market-based and promoting the RMB's convertibility under capital accounts, established a macroprudential policy framework, and expanded the use of the RMB in cross-border trade and investment. China's banking, securities and insurance industries became significantly more resilient to risks and internationally competitive, and they underpinned our successful response to the global financial crisis.

Reform of state-owned enterprises deepened, their performance improved and their competitiveness was significantly enhanced. We formulated the Guidelines on Encouraging and Guiding the Sound Development of Nongovernmental Investment and rules for their implementation, and the environment for the development of the non-public sector of the economy improved. We adopted a system for compensating for ecological damage and carried out trials for trading pollution discharge and carbon emission rights. We carried out function-based reform of public institutions.

7. Unswervingly opening wider to the outside world and comprehensively improving the performance of the open economy

We actively responded to drastic changes in the external environment, promptly introduced policies and measures to stabilize external demand, and implemented the strategy of diversifying markets. During the past five years, China's import and export volume grew by an annual average of 12.2% and rose from third to second place in the world. China has become the largest exporter in the world, and its international market share increased by over two percentage points over 2007. China's import and export mix improved, and its status as a trading power was further strengthened.

Over the past five years, we utilized US$ 552.8 billion of foreign investment, considerably improved the structure and distribution of this investment, and made much better use of it.

We quickened the implementation of the "go global" strategy and encouraged enterprises of various types to invest and operate overseas. Non-financial outward direct investment increased from $24.8 billion in 2007 to $77.2 billion in 2012, growing at an average annual rate of 25.5%. This turned China into a major overseas investor country.

Opening up vigorously stimulated China's economic development and structural improvement, brought in advanced foreign technologies and managerial expertise, and increased employment and workers' income, and also made an important contribution to global economic recovery.

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