Following is the full text of the Report on the Work of the Government delivered by Premier Li Keqiang at the Third Session of the Twelfth National People's Congress on March 5, 2015 and adopted on March 15, 2015:

REPORT ON THE WORK OF THE GOVERNMENT
Delivered at the Third Session of the 12th National People' s Congress on March 5, 2015
Li Keqiang
Premier of the State Council

Fellow Deputies,

On behalf of the State Council, I will now report to you on the work of the government for your deliberation and approval, and I invite comments on my report from the members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).

I. A Review of the Work in 2014

Over the past year, the international and domestic environments faced by China in its development have been complicated and challenging. The road to global economic recovery has been rough, with many ups and downs, and the performance of the major economies has been divergent. Downward pressure on China' s economy has continued to mount, and we have faced an array of interwoven difficulties and challenges.

However, under the firm leadership of the Central Committee of the Communist Party of China (CPC) headed by General Secretary Xi Jinping, all our people have worked together as one, surmounted difficulties, and accomplished the year' s main targets for economic and social development. We have made solid progress in our endeavor to finish building a moderately prosperous society in all respects, got off to a good start in comprehensively deepening reform, embarked on a new journey to fully advance the law-based governance of China, and seen progress in the all-round strengthening of Party self-conduct.

During the past year, China has, overall, achieved a stable performance while at the same time securing progress in its economic and social development. The main indication of this stable performance is that the economy operated within an appropriate range.

-- The growth rate was steady. China' s GDP reached 63.6 trillion yuan, an increase of 7.4% over the previous year, making China one of the fastest-growing major economies in the world.

-- Employment remained robust, with 13.22 million new urban jobs created, which is higher than the figure for the previous year.

-- Prices were stable, with the CPI rising by 2%.

The underlying feature demonstrating progress is that our development is becoming better coordinated and more sustainable.

-- The economic structure was upgraded. Grain output reached 605 million metric tons; the contribution of consumption toward economic growth rose by three percentage points to 51.2%; the value added of the service sector increased from 46.9% to 48.2% of the GDP; and there was a constant stream of new industries, new types of business, and new business models. The central and western regions grew faster in economic terms than the eastern region.

-- The quality of development was raised. Revenue in the general public budgets grew by 8.6%. Research and development spending accounted for more than 2% of the GDP. Energy intensity was cut by 4.8%, the biggest reduction made in recent years.

-- People' s lives were improved. Per capita disposable personal income increased by 8% in real terms nationwide, growing faster than the economy, and the per capita disposable income of rural residents grew by 9.2%, outpacing that of those living in urban areas. In rural areas, the number of people living in poverty was reduced by 12.32 million, and over 66 million more people gained access to safe drinking water. The number of outbound trips made by Chinese tourists exceeded 100 million.

-- New breakthroughs were made in reform and opening up. A series of key tasks for comprehensively deepening reform were launched, and the goal of the current administration to cut the number of items that require government review by one third was achieved ahead of schedule.

These achievements have not come easily. They have been made possible by the painstaking efforts and hard work of all our people, and they have strengthened our resolve and confidence to keep pushing ahead.

Over the past year, we have faced more difficulties and challenges than anticipated. We have risen to the challenge and accomplished the following in our work.

First, on the basis of range-based macro regulation, we exercised targeted regulation to keep the economy growing steadily.

In the face of mounting downward economic pressure, we maintained strategic focus and kept our macroeconomic policy unchanged. Instead of using short-term stimulus measures, we continued to develop new ideas and methods for macro regulation. We exercised targeted regulation, stimulated market activity, shored up our weak spots, and boosted the real economy. With a keen understanding of the appropriate range within which the economy needs to be operating, we adopted targeted steps to address the serious issues and structural problems hindering development. We promoted reform to gain impetus for development, made structural adjustments to produce support for development, and improved living standards to increase the potential for development. We both expanded market demand and increased effective supply, working to ensure that structural adjustments were made without compromising the growth rate.

We have been effectively implementing proactive fiscal policy and prudent monetary policy. We increased targeted tax reductions, reduced fees across the board, extended the coverage of tax relief policies to benefit more small and micro businesses, and expanded the trials to replace business tax with VAT to cover more industries. We sped up the process of making budgetary funds available for fiscal expenditures and put surplus budgetary funds to good use. By flexibly utilizing monetary policy instruments, making targeted cuts to required reserve ratios, carrying out targeted re-lending, and making asymmetric interest rate cuts, we stepped up support for weaker areas in economic and social development. Increases in loans made to small and micro businesses, and loans for agriculture, rural areas, and farmers, outdid the average increase in loans overall by 4.2 and 0.7 percentage points respectively. At the same time, regulation of the financial sector was improved and regional and systemic risks were forestalled.

Second, we deepened reform and opening up and invigorated economic and social development.

To address obstructions holding back development caused by certain systems and mechanisms, we comprehensively deepened reform, invigorating the market to offset downward economic pressure. We tackled many tough issues and carried out structural reforms in the economic, political, cultural, societal, and ecological sectors.

We have made solid progress in key reforms. We formulated and implemented a coordinated plan for deepening the reform of the fiscal and tax systems. Important progress was made in the reform of the budgetary management and tax systems. The number of items receiving special transfer payments was over one third less than that of the previous year, and the proportion of transfer payments for general purposes was increased. Management of local government debt was strengthened. The floating ranges of interest rates on deposits and exchange rates were expanded. New steps were taken in the trials to establish private banks. The Shanghai-Hong Kong Stock Connect was launched on a trial basis. The scope for using foreign exchange reserves and insurance funds was broadened. Price reforms in energy, transport, environmental protection, and communications were accelerated. We launched reforms to the system for managing research and development funding, the school examination and enrollment systems, the household registration system, and the pension system for employees of Party and government offices and public institutions.

We have continued to give the central stage in reform to streamlining administration and delegating more powers to lower-level governments and to society in general while improving regulation. Over the course of the year, departments under the State Council cancelled the requirement of or delegated the power for review on 246 items. We cancelled 29 performance evaluations, inspections on the meeting of standards, and commendations, and 149 verifications and approvals of vocational qualifications. We again revised and significantly shortened the list of investment projects requiring government review. We channeled great effort into the reform of the business system. The number of newly registered market entities reached 12.93 million, with that of enterprises increasing by 45.9%, creating a fresh surge of entrepreneurial activity. While economic growth slowed down, more jobs were created, which fully demonstrates both the tremendous power of reform and the endless potential of the market.

We drew on further opening up to boost reform and development. We expanded the China (Shanghai) Pilot Free Trade Zone and established similar zones in Guangdong, Tianjin, and Fujian. We worked to keep exports stable and increase imports, and China' s international market share in exports continued to increase. Foreign direct investment actually made in China reached $119.6 billion, making the country the world' s top destination for foreign direct investment. China' s outward foreign direct investment reached $102.9 billion, meaning that outward investment has come to draw even with inward investment. China' s free trade zone arrangements with Iceland and Switzerland were officially launched, and China completed substantive talks on free trade zones with the Republic of Korea and Australia. Major progress was made in cooperation with other countries in fields such as railways, electric power, oil, natural gas, and communications. Chinese equipment is making significant strides into the international market. 

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